<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 16, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
<TABLE>
<S> <C>
COMMUNITY FIRST BANKSHARES, INC. CFB CAPITAL I
(Exact name of registrant as specified in its (Exact name of co-registrant as specified in
charter) its charter)
DELAWARE DELAWARE
(State or other jurisdiction of incorporation (State or other jurisdiction of incorporation
or organization) or organization)
46-0391436 41-6422292
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
c/o Community First Bankshares, Inc.
520 Main Avenue 520 Main Avenue
Fargo, North Dakota 58124-0001 Fargo, North Dakota 58124-0001
(701) 298-5600 (701) 298-5600
(Address including zip code, and telephone (Address including zip code, and telephone
number, number,
including area code, of registrant's principal including area code, of co-registrant's
executive office) principal executive office)
</TABLE>
------------------------------
Donald R. Mengedoth
President
Community First Bankshares, Inc.
520 Main Avenue
Fargo, North Dakota 58124-0001
(701) 298-5600
(Name, address, including zip code, and telephone number
including area code, of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
Patrick Delaney David B. Miller
Martin R. Rosenbaum Keyna P. Skeffington
Lindquist & Vennum P.L.L.P. Faegre & Benson, LLP
4200 IDS Center 2200 Norwest Center
80 South 8th Street 90 South Seventh Street
Minneapolis, Minnesota 55402 Minneapolis, Minnesota 55402
Telephone: (612) 371-3211 Telephone: (612) 336-3000
</TABLE>
Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE
SECURITIES TO BE REGISTERED BE REGISTERED (1) PER UNIT (1) OFFERING PRICE
<S> <C> <C> <C>
% Cumulative Capital Securities of CFB Capital I......... 2,400,000 $25.00 $60,000,000
% Junior Subordinated Debentures of Community First
Bankshares, Inc. (2)...................................... (2) -- --
Guarantee of Community First Bankshares, Inc. with respect
to the % Cumulative Capital Securities (3).............. (3) -- --
Total Registration Fee..................................... -- -- --
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
<S> <C>
% Cumulative Capital Securities of CFB Capital I......... $18,182
% Junior Subordinated Debentures of Community First
Bankshares, Inc. (2)...................................... --
Guarantee of Community First Bankshares, Inc. with respect
to the % Cumulative Capital Securities (3).............. --
Total Registration Fee..................................... $18,182
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(a).
(2) The % Junior Subordinated Debentures (the "Junior Subordinated
Debentures") will be purchased by CFB Capital I ("CFB Capital") with the
proceeds of the sale of the % Cumulative Capital Securities (the "Capital
Securities"). The Junior Subordinated Debentures may later be distributed
for no additional consideration to the holders of the Capital Securities
upon CFB Capital's dissolution and the distribution of its assets.
(3) This Registration Statement is deemed to cover the Junior Subordinated
Debentures of Community First Bankshares, Inc. (the "Company), the rights of
holders of the Junior Subordinated Debentures of the Company under the
Indenture, the rights of holders of the Capital Securities under the Trust
Agreement, the Guarantee, the Expense Agreement entered into by the Company
and certain backup undertakings as described herein. No separate
consideration will be received for the Guarantee or such backup
undertakings.
----------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<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 BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS Subject to completion, dated January 16, 1997
DATED , 1997
2,400,000 CAPITAL SECURITIES
CFB CAPITAL I
% Cumulative Capital Securities
(Liquidation Amount $25 per Capital Security)
Fully and Unconditionally Guaranteed, as Described Herein, by
[LOGO]
The % Cumulative Capital Securities (the "Capital Securities") offered hereby
represent undivided beneficial interests in the assets of CFB Capital I, a
statutory business trust formed under the laws of the State of Delaware ("CFB
Capital"). Community First Bankshares, Inc., a Delaware corporation (the
"Company"), will be the owner of all of the beneficial interests represented by
common securities of CFB Capital (the "Common Securities" and, collectively with
the Capital Securities, the "Trust Securities"). CFB Capital exists for the sole
purpose of issuing the Trust Securities and investing the proceeds thereof in
% Junior Subordinated Debentures (the "Junior Subordinated Debentures") to be
issued by the Company. The Junior Subordinated Debentures will mature on
February , 2027, which date may be shortened (such date, as it may be
shortened, the "Stated Maturity") to a date not earlier than February , 2002
if certain conditions are met (including the Company having received prior
approval of the Board of Governors of the Federal Reserve System (the "Federal
Reserve") to do so if then required under applicable capital guidelines or
policies of the Federal Reserve). The Capital Securities will have a preference
under certain circumstances with respect to cash distributions and amounts
payable on liquidation, redemption or otherwise over the Common Securities,
which will be held by the Company. See "Description of the Capital Securities --
Subordination of Common Securities of CFB Capital Held by the Company."
(CONTINUED ON NEXT PAGE)
SEE "RISK FACTORS" COMMENCING ON PAGE 13 HEREIN FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, BY ANY OTHER GOVERNMENTAL AGENCY, OR
OTHERWISE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public Commission (1) CFB Capital (2)(3)
<S> <C> <C> <C>
Per Capital Security.................. $25.00 (2) $
Total................................. $ (2) $
</TABLE>
(1) The Company and CFB Capital have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(2) In view of the fact that all of the proceeds of the sale of the Capital
Securities will be used to purchase the Junior Subordinated Debentures, the
Company has agreed to pay the Underwriters as compensation for arranging the
investment therein of such proceeds, $ per Capital Security, or $ in
the aggregate. See "Underwriting."
(3) Before deducting offering expenses payable by the Company estimated at
$215,000.
The Capital Securities are being offered by the Underwriters named herein
subject to prior sale and when, as and if delivered to and accepted by the
Underwriters. It is expected that the Capital Securities will be ready for
delivery in book-entry form only through the facilities of The Depository Trust
Company in New York, New York, on or about , 1997, against payment
therefor in immediately available funds.
PIPER JAFFRAY INC.
DAIN BOSWORTH
INCORPORATED
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
Holders of the Capital Securities will be entitled to receive preferential
cumulative cash distributions accruing from the date of original issuance and
payable quarterly in arrears on the 15th day of April, July, October and January
of each year (subject to possible deferral as described below), commencing April
15, 1997, at the annual rate of % of the Liquidation Amount of $25 per
Capital Security ("Distributions"). The amount of each distribution due with
respect to the Capital Securities will include amounts accrued through the date
the distribution payment is due. The Company will have the right to defer
payments of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 20 consecutive quarters with respect to
each deferral period (each, an "Extension Period"), provided that no Extension
Period may extend beyond the Stated Maturity of the Junior Subordinated
Debentures. Upon the termination of any such Extension Period and the payment of
all amounts then due, the Company may elect to begin a new Extension Period
subject to the requirements set forth herein. If interest payments on the Junior
Subordinated Debentures are so deferred, Distributions on the Capital Securities
will also be deferred and the Company will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash distributions with
respect to its capital stock or to make any payment with respect to its debt
securities 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 Capital Securities are entitled will accumulate) at the rate of
% per annum, compounded quarterly, and holders of the Capital Securities will
be required to accrue income and will be required to pay United States federal
income tax on that income. See "Description of Junior Subordinated Debentures --
Option to Extend Interest Payment Period" and "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue Discount."
The Company has, through the Guarantee, Trust Agreement, Junior Subordinated
Debentures, Indenture and the Expense Agreement (each as defined herein), taken
together, fully, irrevocably and unconditionally guaranteed all of CFB Capital's
obligations under the Capital Securities. See "Relationship Among the Capital
Securities, the Junior Subordinated Debentures and the Guarantee -- Full and
Unconditional Guarantee." Under the Guarantee, the Company guarantees the
payment of Distributions by CFB Capital and payments on liquidation of or
redemption of the Capital Securities (subordinate to the right to payment of
Senior and Subordinated Debt of the Company, as defined herein) to the extent of
funds held by CFB Capital. The Guarantee does not cover payment of Distributions
when CFB Capital does not have sufficient funds to pay such Distributions. See
"Description of Guarantee." If the Company does not make required payments on
the Junior Subordinated Debentures held by CFB Capital, CFB Capital will have
insufficient funds to pay Distributions on the Capital Securities. In such
event, a holder of the Capital Securities may institute a legal proceeding
directly against the Company to enforce payment of such Distributions to such
holder. See "Description of Junior Subordinated Debentures -- Enforcement of
Certain Rights by Holders of the Capital Securities." The obligations of the
Company under the Guarantee and the Junior Subordinated Debentures are
subordinate and junior in right of payment to all Senior and Subordinated Debt
(as defined in "Description of Junior Subordinated Debentures -- Subordination")
of the Company.
The Capital Securities are subject to mandatory redemption, in whole or in part,
upon repayment of the underlying Junior Subordinated Debentures at maturity or
to the extent of their earlier redemption in an amount equal to the amount of
Junior Subordinated Debentures maturing or being redeemed. The redemption price
will equal the aggregate liquidation preference of the Capital Securities plus
any accumulated and unpaid Distributions thereon to the date of redemption. The
Junior Subordinated Debentures are redeemable prior to maturity at the option of
the Company, subject to any required prior approval of the Federal Reserve, (i)
on or after February , 2002, in whole at any time or in part from time to
time, or (ii) at any time, in whole (but not in part), upon the occurrence and
continuation of a Tax Event or an Investment Company Event (each as defined
herein), in each case at a redemption price equal to the accrued and unpaid
interest on the Junior Subordinated Debentures to the date fixed for redemption,
plus 100% of the principal amount thereof. See "Description of the Capital
Securities -- Redemption."
(CONTINUED ON NEXT PAGE)
2
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
The Company will have the right at any time to terminate CFB Capital and cause
the Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities in liquidation of CFB Capital, subject to the Company having received
prior approval of the Federal Reserve if required. See "Description of the
Capital Securities -- Redemption." The Junior Subordinated Debentures are
unsecured and subordinated to all Senior and Subordinated Debt. As of September
30, 1996, after giving effect to the Company's acquisition of Mountain Parks
Financial Corp. (see "Prospectus Summary -- The Company" and "Recent
Developments"), the Company had approximately $38.9 million aggregate principal
amount of Senior and Subordinated Debt outstanding. The terms of the Junior
Subordinated Debentures place no limitation on the amount of Senior and
Subordinated Debt that the Company can issue. See "Description of Junior
Subordinated Debentures -- Subordination."
In the event of the termination of CFB Capital, after satisfaction of
liabilities to creditors of CFB Capital as required by applicable law, the
holders of Capital Securities will be entitled to receive a liquidation amount
of $25 per Capital Security ("Liquidation Amount"), plus accumulated and unpaid
Distributions thereon to the date of payment, which may be in the form of a
distribution of such Like Amount (as defined herein) of Junior Subordinated
Debentures, subject to certain exceptions. See "Description of the Capital
Securities -- Liquidation Distribution Upon Termination."
The Company intends to include the Capital Securities for quotation on the
Nasdaq National Market. Although the Underwriters have indicated an intention to
make a market in the Capital Securities, the Underwriters are not obligated to
make a market in the Capital Securities, and any market making may be
discontinued at any time at the sole discretion of such Underwriters. There can
be no assurance that a market will develop for the Capital Securities. See "Risk
Factors -- Absence of Existing Public Market" and "Underwriting."
The Capital Securities will be represented by one or more global certificates
registered in the name of The Depository Trust Company (the "Depositary") or its
nominee. Beneficial interests in the Capital Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
participants in the Depositary. Except as described herein, the Capital
Securities in certificate form will not be issued in exchange for global
certificates. See "Book-Entry Issuance."
AS USED HEREIN, (I) THE "INDENTURE" MEANS THE SUBORDINATED INDENTURE DATED AS OF
FEBRUARY , 1997, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, BETWEEN THE
COMPANY AND WILMINGTON TRUST COMPANY AS TRUSTEE (THE "INDENTURE TRUSTEE"), UNDER
WHICH THE JUNIOR SUBORDINATED DEBENTURES WILL BE ISSUED, AND (II) THE "PROPERTY
TRUSTEE" AND "DELAWARE TRUSTEE" UNDER THE TRUST AGREEMENT EXECUTED BY THE
COMPANY, AS DEPOSITOR, WILMINGTON TRUST COMPANY, AS TRUSTEE, AND THE
ADMINISTRATIVE TRUSTEES NAMED THEREIN, TO BE AMENDED AND RESTATED PURSUANT TO AN
AMENDED AND RESTATED TRUST AGREEMENT EXECUTED BY SUCH PARTIES (AS AMENDED AND
RESTATED, THE "TRUST AGREEMENT") SHALL MEAN WILMINGTON TRUST COMPANY.
------------------------
Information included or incorporated by reference in this Prospectus includes
"forward looking statements," which can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "anticipate,"
"estimate," or "continue," or the negative thereof or other variations thereon
or comparable terminology. The statements in "Risk Factors" beginning on page 13
of the Prospectus and other statements and disclaimers in the Prospectus
constitute cautionary statements identifying important factors, including
certain risks and uncertainties, with respect to such forward-looking statements
that could cause actual results to differ materially from those reflected in
such forward-looking statements.
3
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the offering of the
securities offered hereby. This Prospectus does not contain all of the
information set forth in such Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information filed by the Company
can be inspected and copies of such material can be obtained at prescribed rates
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Chicago Regional Office, Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and New York
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048. The
Commission also maintains a Web site (http://www.sec.gov) at which reports,
proxy and information statements and other information regarding the Company may
be accessed. In addition, such reports, proxy statements and other information
can also be inspected at the offices of The Nasdaq Stock Market, 1735 K Street,
N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
(i) The Company's Annual Report on Form 10-K for the year ended December
31, 1995;
(ii) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 1996; and
(iii) The Company's Current Reports on Form 8-K filed with the Commission
on October 18, 1996 and January 2, 1997, as amended on Form 8-K/A filed on
January 16, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed to constitute a part of this
Prospectus, except as so modified or superseded.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the oral or written request of any such
person, a copy of all documents which are incorporated by reference in this
Prospectus, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
copies should be directed to Mark A. Anderson, Executive Vice President,
Community First Bankshares, Inc., 520 Main Avenue, Fargo, North Dakota
58124-0001, telephone number (701) 298-5600.
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS WHICH
STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CAPITAL SECURITIES ON THE NASDAQ
NATIONAL MARKET OR OTHERWISE, AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
4
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND CONSOLIDATED FINANCIAL INFORMATION APPEARING ELSEWHERE IN THIS
PROSPECTUS OR IN THE DOCUMENTS INCORPORATED INTO THIS PROSPECTUS BY REFERENCE.
UNLESS THE CONTEXT CLEARLY SUGGESTS OTHERWISE, (I) REFERENCES TO THE COMPANY
INCLUDE THE COMPANY AND ITS SUBSIDIARIES AND (II) THE HISTORICAL FINANCIAL AND
BUSINESS INFORMATION OF THE COMPANY HAS BEEN RESTATED TO REFLECT THE ACQUISITION
OF MOUNTAIN PARKS FINANCIAL CORP. SEE "RECENT DEVELOPMENTS."
THE COMPANY
Community First Bankshares, Inc., a Delaware corporation (the "Company"), is
a multi-bank holding company that as of September 30, 1996 operated banks and
bank branches (the "Company Banks") in 79 communities in Colorado, Iowa,
Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin and had total
assets of approximately $3.0 billion. The Company operates community banks
primarily in small and medium-sized communities and the surrounding market
areas. The Company provides a full range of financial products and services to
individuals and businesses, including commercial and consumer banking, trust,
insurance and investments.
The Company's primary strategy is to operate and continue to acquire banks
with approximately $20 million to $150 million in assets, primarily in selected
communities with populations between 3,000 and 50,000 in its key target
acquisition states of Colorado, Iowa, Kansas, Minnesota, Montana, Nebraska,
North Dakota, South Dakota, Wisconsin, and Wyoming, and additionally in the
adjacent states of Idaho, Illinois, Missouri, New Mexico, Oklahoma and Utah
(this sixteen state area is collectively referred to as the "Acquisition Area").
Such communities are believed to provide the Company with a stable, relatively
low-cost deposit base.
On December 18, 1996, the Company acquired Mountain Parks Financial Corp.
("Mountain Parks"), a bank holding company that operated a state chartered bank
with full service commercial banking facilities in 17 Colorado communities (the
bank and its branches are referred to as the "Mountain Parks Banks"). At
September 30, 1996, Mountain Parks had total assets of approximately $581.8
million. The Mountain Parks Banks are located in winter ski and summer
recreational areas in the Colorado mountains and in the greater Denver/Boulder
metropolitan area. As part of the acquisition of Mountain Parks, the Company
also acquired (i) an 85% interest in Equity Lending, Inc., a specialty consumer
mortgage company involved in originating, owning and servicing non-conforming
residential mortgages in Arizona, Colorado, Minnesota and Wisconsin, and (ii)
Mountain Parks Financial Services, Inc., a consumer finance company located in
Denver, Colorado that focuses on the purchase, origination and servicing of
consumer installment contracts, primarily sub-prime auto contracts. On January
3, 1997, the Company acquired the remaining 15% ownership in Equity Lending,
Inc. See "Recent Developments."
On October 1, 1996, the Company acquired Financial Bancorp, Inc. ("Financial
Bancorp"), a bank holding company located in Trinidad, Colorado. Financial
Bancorp owned all of the outstanding capital stock of Trinidad National Bank
(the "Trinidad Bank"). At September 30, 1996, Financial Bancorp had consolidated
total assets of approximately $69.5 million. The Trinidad Bank is a community
bank in southeastern Colorado that serves a wide range of commercial,
agricultural and consumer banking needs within its market. See "Recent
Developments."
The Company provides its banks (which include the Mountain Parks Banks and
the Trinidad Bank) with the advantages of affiliation with a multi-bank holding
company, such as data processing services, credit policy formulation and review,
investment management and specialized staff support, while granting substantial
autonomy to managers of the Company Banks with respect to day-to-day operations,
customer service decisions and marketing. The Company Banks are encouraged to
participate in community activities, support local charities and community
development, and otherwise to serve their communities.
The Company's principal executive offices are located at 520 Main Avenue,
Fargo, North Dakota 58124-0001 and its telephone number is (701) 298-5600. The
Company also maintains a Web site at http:// www.cfbx.com.
5
<PAGE>
CFB CAPITAL
CFB Capital is a statutory business trust formed under Delaware law pursuant
to (i) the Trust Agreement and (ii) the filing of a certificate of trust with
the Delaware Secretary of State on January 14, 1997. CFB Capital's business and
affairs are conducted by the Property Trustee, Delaware Trustee and three
individual Administrative Trustees who are officers of the Company. CFB Capital
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 Company, and (iii)
engaging in only those other activities necessary, advisable or incidental
thereto (such as registering the transfer of the Trust Securities). Accordingly,
the Junior Subordinated Debentures will be the sole assets of CFB Capital, and
payments by the Company under the Junior Subordinated Debentures and the Expense
Agreement will be the sole revenues of CFB Capital. All of the Common Securities
will be owned by the Company. The Common Securities will 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 under the
Trust Agreement resulting from an event of default under the Indenture, the
rights of the Company as holder of the Common Securities to payment in respect
of Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Capital Securities. See
"Description of the Capital Securities -- Subordination of Common Securities of
CFB Capital Held by the Company." The Company will acquire Common Securities in
an aggregate liquidation amount equal to 3% of the total capital of CFB Capital.
CFB Capital has a term of 31 years, but may terminate earlier as provided in the
Trust Agreement.
CFB Capital's principal executive offices are located at 520 Main Avenue,
Fargo, North Dakota 58124-0001 and its telephone number is (701) 298-5600.
THE OFFERING
<TABLE>
<S> <C>
Capital Securities issuer......... CFB Capital
Securities offered................ 2,400,000 Capital Securities. The Capital Securities
represent undivided beneficial interests in CFB
Capital's assets, which will consist solely of the
Junior Subordinated Debentures and payments thereunder.
Distributions..................... The Distributions payable on each Capital Security will
be fixed at a rate per annum of % of the Liquidation
Amount of $25 per Capital Security, will be cumulative,
will accrue from the date of issuance of the Capital
Securities, and will be payable quarterly in arrears on
the 15th day of April, July, October and January of each
year, commencing on April 15, 1997 (subject to possible
deferral as described below). The amount of each
distribution due with respect to the Capital Securities
will include amounts accrued through the date the
distribution payment is due. See "Description of the
Capital Securities -- Distributions."
Extension periods................. So long as no Debenture Event of Default (as defined
herein) has occurred and is continuing, the Company will
have the right, at any time, to defer payments of
interest on the Junior Subordinated Debentures by
extending the interest payment period thereon for a
period not exceeding 20 consecutive quarters with
respect to each deferral period (each an "Extension
Period"), provided that no Extension Period may extend
beyond the Stated Maturity of the Junior Subordinated
Debentures. If interest payments are so deferred,
Distributions on the Capital
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
Securities will also be deferred and the Company will
not be permitted, subject to certain exceptions
described herein, to declare or pay any cash
distributions with respect to the Company's capital
stock or debt securities that rank PARI PASSU with or
junior to the Junior Subordinated Debentures. During an
Extension Period, Distributions will continue to accrue
with income thereon compounded quarterly. Because
interest would continue to accrue and compound on the
Junior Subordinated Debentures, to the extent permitted
by applicable law, holders of the Capital Securities
will be required to accrue income for United States
federal income tax purposes. See "Description of Junior
Subordinated Debentures -- Option to Extend Interest
Payment Period" and "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue
Discount."
Maturity.......................... The Junior Subordinated Debentures will mature on
February , 2027, which date may be shortened (such
date, as it may be shortened, the "Stated Maturity") to
a date not earlier than February , 2002 if certain
conditions are met (including the Company having
received prior approval of the Federal Reserve to do so
if then required under applicable capital guidelines or
policies of the Federal Reserve).
Redemption........................ The Capital Securities are subject to mandatory
redemption upon repayment of the Junior Subordinated
Debentures at maturity or their earlier redemption in an
amount equal to the amount of Junior Subordinated
Debentures maturing on or being redeemed at a redemption
price equal to the aggregate Liquidation Amount of the
Capital Securities plus accumulated and unpaid
Distributions thereon to the date of redemption. Subject
to Federal Reserve approval, if then required under
applicable capital guidelines or policies of the Federal
Reserve, the Junior Subordinated Debentures are
redeemable prior to maturity at the option of the
Company (i) on or after February , 2002, in whole at
any time or in part from time to time, or (ii) at any
time, in whole (but not in part), upon the occurrence
and during the continuance of a Tax Event or an
Investment Company Event, in each case at a redemption
price equal to 100% of the principal amount of the
Junior Subordinated Debentures so redeemed, together
with any accrued but unpaid interest to the date fixed
for redemption. See "Description of the Capital
Securities -- Redemption" and "Description of Junior
Subordinated Debentures -- Redemption."
Distribution of Junior
Subordinated Debentures.......... The Company has the right at any time to terminate CFB
Capital and cause the Junior Subordinated Debentures to
be distributed to holders of Capital Securities in
liquidation of CFB Capital, subject to the Company
having received prior approval of the Federal Reserve to
do so if then required under applicable capital
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
guidelines or policies of the Federal Reserve. See
"Description of the Capital Securities -- Distribution
of Junior Subordinated Debentures."
Guarantee......................... Taken together, the Company's obligations under various
documents described herein, including the Guarantee,
provide a full guarantee of payments by CFB Capital of
distributions and other amounts due on the Capital
Securities. Under the Guarantee, the Company guarantees
the payment of Distributions by CFB Capital and payments
on liquidation of or redemption of the Capital
Securities (subordinate to the right to payment of
Senior and Subordinated Debt of the Company, as defined
herein) to the extent of funds held by CFB Capital. If
CFB Capital has insufficient funds to pay Distributions
on the Capital Securities (i.e., if the Company has
failed to make required payments under the Junior
Subordinated Debentures), a holder of the Capital
Securities would have the right to institute a legal
proceeding directly against the Company to enforce
payment of such Distributions to such holder. See
"Description of Junior Subordinated Debentures --
Enforcement of Certain Rights of Holders of the Capital
Securities," "Description of Junior Subordinated
Debentures -- Debenture Events of Default" and
"Description of Guarantee."
Ranking........................... The Capital Securities will rank PARI PASSU, and
payments thereon will be made pro rata, with the Common
Securities of CFB Capital held by the Company, except as
described under "Description of the Capital Securities
-- Subordination of Common Securities of CFB Capital
Held by the Company." The obligations of the Company
under the Guarantee, the Junior Subordinated Debentures
and other documents described herein are unsecured and
rank subordinate and junior in right of payment to all
current and future Senior and Subordinated Debt, the
amount of which is unlimited. At September 30, 1996, the
aggregate outstanding Senior and Subordinated Debt of
the Company was approximately $38.9 million. In
addition, because the Company is a holding company, all
obligations of the Company relating to the securities
described herein will be effectively subordinated to all
existing and future liabilities of the Company's
subsidiaries, including the Company Banks. The Company
may cause additional capital securities to be issued by
trusts similar to CFB Capital in the future, and there
is no limit on the amount of such securities that may be
issued. In this event, the Company's obligations under
the junior subordinated debentures to be issued to such
other trusts and the Company's guarantees of the
payments by such trusts will rank PARI PASSU with the
Company's obligations under the Junior Subordinated
Debentures and the Guarantee, respectively.
Voting Rights..................... The holders of the Capital Securities will generally
have limited voting rights relating only to the
modification of the Capital Securities, the dissolution,
winding-up or termination of CFB
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
Capital and certain other matters described herein. See
"Description of the Capital Securities -- Voting Rights;
Amendment of Trust Agreement."
Proposed Nasdaq National Market
Symbol........................... CFBXL
Use of Proceeds................... The proceeds to CFB Capital from the sale of the Capital
Securities offered hereby will be invested by CFB
Capital in the Junior Subordinated Debentures of the
Company. The Company intends to use the net proceeds
from the issuance of the Junior Subordinated Debentures
for general corporate purposes, which may include
without limitation possible future acquisitions, funding
investments in, or extension of credit to, the Company's
subsidiaries, repayment of maturing obligations and
redemption of securities. The Company expects the
Capital Securities to qualify as Tier 1 capital under
the capital guidelines of the Federal Reserve. See "Use
of Proceeds."
</TABLE>
9
<PAGE>
SUMMARY SUPPLEMENTAL HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth certain consolidated financial data
concerning the Company. The summary financial data for each of the five years
ended December 31, 1995 is derived from the supplemental audited consolidated
financial statements of the Company, and related notes thereto, incorporated by
reference in this document. The financial data as of and for the nine months
ended September 30, 1996 and 1995 have been derived from the Company's
supplemental unaudited financial statements. The supplemental financial
statements from which this data has been derived have been restated to reflect
the Company's acquisition of Mountain Parks, which occurred on December 18, 1996
and was accounted for as a pooling of interests. The information below has not
been restated to reflect the acquisition of Financial Bancorp on the basis that
the effect of that acquisition is not material to this information. The
supplemental unaudited financial statements reflect, in the opinion of
management, all adjustments of a normal recurring nature necessary for a fair
presentation of financial condition and results of operations. The results for
the nine months ended September 30, 1996 are not necessarily indicative of the
results to be expected for the entire year. This information should be read in
conjunction with the supplemental consolidated financial statements of the
Company, and the related notes thereto, and Management's Discussion and Analysis
of Financial Condition and Results of Operations included in the Company's Form
8-K/A filed with the Commission on January 16, 1997 and incorporated by
reference herein.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30 YEAR ENDED DECEMBER 31
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Interest income............................ $ 167,912 $ 138,488 $ 192,868 $ 143,237 $ 121,146 $ 115,309 $ 120,012
Interest expense........................... 69,524 59,725 82,891 53,468 47,271 50,870 64,522
--------- --------- --------- --------- --------- --------- ---------
Net interest income........................ 98,388 78,763 109,977 89,769 73,875 64,439 55,490
Provision for loan losses.................. 4,572 1,929 2,711 1,839 2,149 2,433 3,427
--------- --------- --------- --------- --------- --------- ---------
Net interest income after provision for
loan losses............................... 93,816 76,834 107,266 87,930 71,726 62,006 52,063
Noninterest income......................... 19,132 16,329 22,488 18,992 18,158 14,640 11,931
Noninterest expense........................ 72,491 59,536 82,593 70,241 60,854 52,992 45,427
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes, extraordinary
item and cumulative effect of accounting
change.................................... 40,457 33,627 47,161 36,681 29,030 23,654 18,567
Provision for income taxes................. 13,995 12,298 17,208 13,952 10,775 8,546 6,285
--------- --------- --------- --------- --------- --------- ---------
Income before extraordinary item and
cumulative effect of accounting change.... 26,462 21,329 29,953 22,729 18,255 15,108 12,282
Extraordinary item (1)..................... -- -- -- -- -- -- (653)
Cumulative effect of accounting change..... -- -- -- -- 359 -- --
--------- --------- --------- --------- --------- --------- ---------
Net income................................. 26,462 21,329 29,953 22,729 18,614 15,108 11,629
Dividends on preferred stock............... 1,208 1,208 1,610 1,091 -- -- 655
--------- --------- --------- --------- --------- --------- ---------
Net income applicable to common equity..... $ 25,254 $ 20,121 $ 28,343 $ 21,638 $ 18,614 $ 15,108 $ 10,974
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Earnings per common and common equivalent
share:
Primary earnings per share before
extraordinary item and cumulative effect
of accounting change.................... $ 1.53 $ 1.32 $ 1.82 $ 1.48 $ 1.29 $ 1.07 $ 0.92
Extraordinary item (1)................... -- -- -- -- -- -- (0.05)
Cumulative effect of accounting change... -- -- -- -- 0.03 -- --
Primary earnings per share............... $ 1.53 $ 1.32 $ 1.82 $ 1.48 $ 1.32 $ 1.07 $ 0.87
Fully diluted earnings per share before
extraordinary item and cumulative effect
of accounting change.................... $ 1.47 $ 1.26 $ 1.74 $ 1.42 $ 1.27 $ 1.07 $ 0.92
Extraordinary item (1)................... -- -- -- -- -- -- (0.05)
Cumulative effect of accounting change... -- -- -- -- 0.03 -- --
Fully diluted earnings per share......... $ 1.47 $ 1.26 $ 1.74 $ 1.42 $ 1.30 $ 1.07 $ 0.87
Average common and common equivalent shares
outstanding:
Primary.................................. 16,532,714 15,280,976 15,543,129 14,580,309 14,098,585 14,080,526 12,621,595
Fully diluted............................ 17,992,255 17,049,679 17,276,050 16,136,433 14,396,532 14,087,606 12,621,595
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30 YEAR ENDED DECEMBER 31
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RATIOS AND OTHER DATA:
Return on average assets (2)............... 1.26% 1.23% 1.24% 1.13% 1.10% 1.04% 0.88%
Return on average common shareholders'
equity (2)................................ 17.73% 18.30% 18.19% 16.77% 16.64% 15.10% 13.90%
Net interest margin (2).................... 5.32% 5.05% 5.07% 4.95% 4.74% 4.85% 4.61%
Net charge-offs to average loans (2)....... 0.15% 0.12% 0.17% -- 0.08% 0.33% 0.55%
Ratio of earnings to fixed
charges (3):
Excluding interest on deposits........... 4.58x 4.29x 4.46x 5.23x 7.60x 8.53x 4.30x
Including interest on deposits........... 1.57x 1.55x 1.55x 1.66x 1.61x 1.46x 1.28x
FINANCIAL CONDITION DATA:
Assets..................................... $2,999,736 $2,632,669 $2,769,976 $2,130,619 $1,883,794 $1,576,275 $1,414,860
Loans...................................... 1,976,592 1,695,933 1,767,193 1,330,146 1,037,666 813,550 685,053
Investment securities (4).................. 736,270 699,967 717,342 613,239 653,722 579,078 554,115
Deposits................................... 2,424,315 2,189,725 2,359,716 1,794,565 1,627,989 1,374,859 1,239,421
Long-term debt............................. 38,898 81,724 81,288 38,092 48,354 18,015 17,872
Preferred shareholders' equity............. 22,997 23,000 23,000 23,000 -- -- --
Common shareholders' equity................ 203,782 173,139 181,004 134,701 123,757 103,911 93,247
Book value per common share................ 12.39 10.77 11.25 9.23 8.68 7.64 6.94
Tangible book value per common share....... 10.16 8.83 9.08 8.09 7.84 7.01 6.60
FINANCIAL CONDITION RATIOS:
Nonperforming assets to total loans and
OREO...................................... 0.42% 0.33% 0.31% 0.34% 0.62% 1.13% 1.34%
Allowance for loan losses to total loans... 1.30% 1.36% 1.29% 1.30% 1.38% 1.38% 1.53%
Allowance for loan losses to nonperforming
loans..................................... 416% 576% 608% 537% 296% 224% 205%
REGULATORY CAPITAL RATIOS:
Tier 1 capital............................. 8.48% 8.66% 8.51% 10.64% 10.16% 10.97% 11.59%
Total capital.............................. 10.77% 11.69% 11.18% 13.46% 13.44% 12.47% 13.29%
Leverage ratio............................. 6.35% 6.27% 6.10% 7.12% 6.12% 6.40% 6.69%
</TABLE>
- ------------------------------
(1) Represents the after-tax effect of prepayment penalties and unamortized debt
issuance costs in connection with redemption of certain indebtedness.
(2) Annualized for the nine months ended September 30, 1996 and 1995.
(3) For purposes of computing the ratio of earnings to fixed charges, earnings
represent income before income taxes, extraordinary items and fixed charges.
Fixed charges represent interest expense, including the interest component
of rental expense, and preferred stock dividends. Fixed charges attributable
to the preferred stock dividends are assumed to equal the amount of pre-tax
income that would be necessary to pay such dividends.
(4) Includes available-for-sale securities and held-to-maturity securities.
11
<PAGE>
[COMMUNITY FIRST LOGO AND MAP]
Community Banking Locations
Map of the United States indicating the Company's banking locations, the
locations of other Company offices and the locations of the Company's key
acquisition states and acquisition prospect states.
12
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE FOLLOWING
FACTORS IN CONNECTION WITH A DECISION TO PURCHASE THE CAPITAL SECURITIES.
RANKING OF THE COMPANY'S OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEE
The ability of CFB Capital to pay amounts due to holders of the Capital
Securities is solely dependent upon the Company making payments on the Junior
Subordinated Debentures as and when required. All obligations of the Company
under the Guarantee, the Junior Subordinated Debentures and other documents
described herein are unsecured and rank subordinate and junior in right of
payment to all current and future Senior and Subordinated Debt, the amount of
which is unlimited. At September 30, 1996, the aggregate outstanding Senior and
Subordinated Debt of the Company was approximately $38.9 million. In addition,
because the Company is a holding company, all obligations of the Company
relating to the securities described herein will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, including the
Company Banks. As a holding company, the right of the Company 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 Company
may itself be recognized as a creditor of that subsidiary. Accordingly, holders
of the Capital Securities should look only to the assets of the Company, and not
of its subsidiaries, for principal and interest payments on 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 and Subordinated Debt, that may be incurred by the Company or
its subsidiaries. Further, there is no limitation on the Company's ability to
issue additional junior subordinated debentures in connection with any further
offerings of capital securities, and such additional debentures that would rank
PARI PASSU with the Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures -- Subordination" and "Description of Guarantee --
Status of the Guarantee."
DEPENDENCE ON DIVIDENDS FROM SUBSIDIARY BANKS
As a holding company, with the substantial majority of its assets
represented by its equity interest in its subsidiary banks, the Company's
ability to pay interest on the Junior Subordinated Debentures to CFB Capital
(and consequently CFB Capital's ability to pay Distributions on the Capital
Securities and the Company's ability to pay its obligations on the Guarantee)
depends primarily upon the cash dividends the Company receives from the
subsidiary banks. Dividend payments from the subsidiary banks are subject to
regulatory limitations, generally based on current and retained earnings,
imposed by the various regulatory agencies with authority over the respective
subsidiary banks. Payment of dividends is also subject to regulatory
restrictions if such dividends would impair the capital of the subsidiary banks.
Payment of subsidiary bank dividends is also subject to the bank's
profitability, financial condition and capital expenditures and other cash flow
requirements. No assurance can be given that the subsidiary banks will be able
to pay dividends at past levels, or at all, in the future.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES OF A DEFERRAL OF
INTEREST PAYMENTS
So long as no Debenture Event of Default (as defined herein) has occurred
and is continuing, the Company has the right under the Indenture to defer the
payment of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 20 consecutive quarters with respect to
each Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity of the Junior Subordinated Debentures. As a consequence of any
such deferral, quarterly Distributions on the Capital Securities by CFB Capital
will be deferred (and the amount of Distributions to which holders of the
Capital Securities are entitled will accumulate additional amounts thereon at
the rate of % per annum, compounded quarterly, from the relevant payment
date for such Distributions, to the extent permitted by applicable law) during
any such Extension Period. During any such Extension Period, the Company will be
prohibited from making certain payments or distributions with respect to the
Company's capital stock
13
<PAGE>
(including dividends on or redemptions of common or preferred stock) and from
making certain payments with respect to any debt securities of the Company that
rank PARI PASSU with or junior in interest to the Junior Subordinated
Debentures; however, the Company will NOT be restricted from (a) paying
dividends or distributions in common stock of the Company, (b) redeeming rights
or taking certain other actions under a stockholders' rights plan, (c) making
payments under the Guarantee or (d) making 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. Further, during an Extension Period,
the Company would have the ability to continue to make payments on Senior and
Subordinated Debt. Prior to the termination of any Extension Period, the Company
may further extend such Extension Period provided that such extension does not
cause such Extension Period to exceed 20 consecutive quarters or to extend
beyond the Stated Maturity. Upon the termination of any Extension Period and the
payment of all interest then accrued and unpaid (together with interest thereon
at the annual rate of %, compounded quarterly, to the extent permitted by
applicable law), the Company may elect to begin a new Extension Period subject
to the above requirements. There is no limitation on the number of times that
the Company may elect to begin an Extension Period. See "Description of the
Capital Securities -- Distributions" and "Description of Junior Subordinated
Debentures -- Option to Extend Interest Payment Period."
Because the Company believes the likelihood of it exercising its option to
defer payments of interest is remote, the Junior Subordinated Debentures will be
treated as issued without "original issue discount" for United States federal
income tax purposes. As a result, holders of Capital Securities will include
interest in taxable income under their own methods of accounting (i.e., cash or
accrual). If the Company exercises its right to defer payments of interest, the
holders of Capital Securities will be required to include their pro rata share
of original issue discount in gross income as it accrues for United States
federal income tax purposes in advance of the receipt of cash. See "Certain
Federal Income Tax Consequences -- Potential Extension of Interest Payment
Period and Original Issue Discount." The Company has no current intention of
exercising its right to defer payments of interest by extending the interest
payment period on the Junior Subordinated Debentures. However, should the
Company elect to exercise its right to defer payments of interest in the future,
the market price of the Capital Securities is likely to be adversely affected. A
holder that disposes of such holder's Capital Securities during an Extension
Period, therefore, might not receive the same return on such holder's investment
as a holder that continues to hold the Capital Securities.
TAX EVENT REDEMPTION OR INVESTMENT COMPANY ACT REDEMPTION
Upon the occurrence and during the continuation of a Tax Event or an
Investment Company Event (whether occurring before or after February , 2002),
the Company has the right to redeem the Junior Subordinated Debentures in whole
(but not in part) at 100% of the principal amount together with accrued but
unpaid interest to the date fixed for redemption within 90 days following the
occurrence of such Tax Event or Investment Company Event and therefore cause a
mandatory redemption of the Trust Securities. The exercise of such right is
subject to the Company having received prior approval of the Federal Reserve to
do so if then required under applicable guidelines or policies of the Federal
Reserve. See "Description of the Capital Securities -- Redemption."
A "Tax Event" means the receipt by the Company and CFB Capital 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 original issuance of
the Capital Securities, there is more than an insubstantial risk that (i) CFB
Capital 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 Company on the
Junior Subordinated Debentures is not, or within 90 days of such opinion, will
not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (iii) CFB Capital is, or will be within 90
14
<PAGE>
days of the date of the opinion, subject to more than a DE MINIMIS amount of
other taxes, duties or other governmental charges. See "-- Possible Tax Law
Changes Affecting the Capital Securities" below for a discussion of certain
legislative proposals that, if adopted, could give rise to a Tax Event, which
may permit the Company to cause a redemption of the Junior Subordinated
Debentures (and therefore the Capital Securities) prior to February , 2002.
An "Investment Company Event" means the receipt by the Company and CFB
Capital of an opinion of counsel experienced in such matters to the effect that,
as a result of any change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, CFB Capital is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act, which change becomes effective on or after the original issuance of
the Capital Securities.
POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
released which would, among other things, generally deny interest deductions for
interest on an instrument, issued by a corporation, that has a maximum term of
more than 20 years and that is not shown as indebtedness on the separate balance
sheet of the issuer or, where the instrument is issued to a related party (other
than a corporation), where the holder or some other related party issues a
related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. It is possible that this provision could be adopted
with retroactive effect, in which event the Company might be unable to deduct
interest on the Junior Subordinated Debentures. However, on March 29, 1996, the
Chairmen of the Senate Finance and House Ways and Means Committees issued a
joint statement to the effect that it was their intention that the effective
date of the President's legislative proposals, if adopted, will be no earlier
than the date of appropriate Congressional action. There can be no assurance,
however, that current or future legislative proposals or final legislation will
not affect the ability of the Company to deduct interest on the Junior
Subordinated Debentures. Such a change could give rise to a Tax Event, which may
permit the Company, upon approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve, to cause a
redemption of the Capital Securities. See "Description of the Capital Securities
- -- Redemption -- Tax Event Redemption" and "Description of the Junior
Subordinated Debentures -- Redemption." See also "Certain Federal Income Tax
Consequences -- Possible Tax Law Changes."
POSSIBLE DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL
SECURITIES
The Company will have the right at any time to terminate CFB Capital and
cause the Junior Subordinated Debentures to be distributed to the holders of the
Capital Securities in liquidation of CFB Capital, subject to the receipt of any
required prior approval of the Federal Reserve. Because holders of the Capital
Securities may receive Junior Subordinated Debentures in liquidation of CFB
Capital and because Distributions are otherwise limited to payments on the
Junior Subordinated Debentures, prospective purchasers of the Capital Securities
are also making an investment decision with regard to the Junior Subordinated
Debentures and should carefully review all the information regarding the Junior
Subordinated Debentures contained herein. See "Description of the Capital
Securities -- Liquidation Distribution Upon Termination" and "Description of the
Junior Subordinated Debentures."
LIMITATIONS ON DIRECT ACTIONS AGAINST THE COMPANY AND ON RIGHTS UNDER THE
GUARANTEE
Under the Guarantee, the Company guarantees the payment of Distributions by
CFB Capital and payments on liquidation of or redemption of the Capital
Securities (subordinate to the right to payment of Senior and Subordinated Debt
of the Company) to the extent of funds held by CFB Capital. If CFB Capital has
insufficient funds to pay Distributions on the Capital Securities (i.e., if the
Company has failed to make required payments under the Junior Subordinated
Debentures), a holder of the Capital Securities would have the right to
institute a legal proceeding directly against the Company for enforcement of
payment to such holder of the principal of or interest on such Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Capital Securities of such holder (a "Direct
15
<PAGE>
Action"). Except as described herein, holders of the Capital Securities will not
be able to exercise directly any other remedy available to the holders of the
Junior Subordinated Debentures or assert directly any other rights in respect of
the Junior Subordinated Debentures.
Under the Guarantee, Wilmington Trust Company will act as indenture trustee
(the "Guarantee Trustee"). The holders of not less than a majority in aggregate
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the Guarantee or to direct the exercise of any
trust power conferred upon the Guarantee Trustee under the Guarantee Agreement.
Any holder of the Capital Securities may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against CFB Capital, the Guarantee Trustee or any
other person or entity. The Trust Agreement provides that each holder of the
Capital Securities by acceptance thereof agrees to the provisions of the
Guarantee Agreement and the Indenture. See "Description of Junior Subordinated
Debentures -- Enforcement of Certain Rights of Holders of Capital Securities"
and "-- Debenture Events of Default" and "Description of Guarantee."
LIMITED COVENANTS
The covenants in the Indenture are limited, and there are no covenants
relating to the Company in the Trust Agreement. As a result, neither the
Indenture nor the Trust Agreement protects holders of Junior Subordinated
Debentures, or Capital Securities, respectively, in the event of a material
adverse change in the Company's financial condition or results of operations or
limits the ability of the Company or any subsidiary to incur additional
indebtedness. Therefore, the provisions of these governing instruments should
not be considered a significant factor in evaluating whether the Company will be
able to comply with its obligations under the Junior Subordinated Debentures or
the Guarantee.
LIMITED VOTING RIGHTS
Holders of the Capital Securities will generally have limited voting rights
relating only to the modification of the Capital Securities and certain other
matters described herein. In the event that (i) there is a Debenture Event of
Default (as defined herein) with respect to the Junior Subordinated Debentures
(see "Description of the Junior Subordinated Debentures -- Events of Default"),
(ii) the Property Trustee fails to pay any distribution on the Capital
Securities for 30 days (subject to deferral of distributions as provided under
"Description of the Capital Securities -- Extension Periods"), (iii) the
Property Trustee fails to pay the redemption price on the Capital Securities
when due upon redemption, (iv) the Property Trustee fails to observe a covenant
in the Trust Agreement for the Capital Securities for 60 days after receiving a
Notice of Default, or (v) the Property Trustee is declared bankrupt or insolvent
and not replaced by the Company within 60 days, the holders of a majority of the
outstanding Capital Securities will be able to remove the Property Trustee and
the Indenture Trustee (but not the Administrative Trustees who may only be
removed by the Company as holder of the Common Securities). See "Description of
the Capital Securities -- Voting Rights; Amendment of the Trust Agreement" and
"-- Removal of Trustees."
ABSENCE OF EXISTING PUBLIC MARKET; MARKET PRICES
There is no existing market for the Capital Securities. The Capital
Securities have been approved for listing on the Nasdaq National Market. There
can be no assurance that an active and liquid trading market for the Capital
Securities will develop or that a continued listing of the Capital Securities
will be available on Nasdaq. Although the Underwriters have informed CFB Capital
and the Company that the Underwriters intend to make a market in the Capital
Securities offered hereby, the Underwriters are not obligated to do so and any
such market making activity may be terminated at any time without notice to the
holders of the Capital Securities. Future trading prices of the Capital
Securities will depend on many factors including, among other things, prevailing
interest rates, the operating results and financial condition of the Company,
and the market for similar securities. There can be no assurance as to the
market prices for the Capital Securities or the Junior Subordinated Debentures
that may be distributed in exchange for the Capital Securities if the Company
exercises its right to terminate CFB Capital. Accordingly, the Capital
Securities
16
<PAGE>
that an investor may purchase, or the Junior Subordinated Debentures that a
holder of the Capital Securities may receive in liquidation of CFB Capital, may
trade at a discount from the price that the investor paid to purchase the
Capital Securities offered hereby.
RISKS INVOLVED IN ACQUISITION STRATEGY
The Company has grown and intends to continue to grow primarily through
acquisitions of banks and other financial institutions. Such acquisitions
involve risks of adversely changing results of operations, unforeseen
liabilities or asset quality problems of acquired entities and other conditions
beyond the control of the Company, such as adverse personnel relations, loss of
customers because of change of identity, and deterioration in local economic
conditions. In connection with the recent acquisition of Mountain Parks, such
risks are heightened by the fact that Mountain Parks is the largest institution
acquired by the Company. See "Recent Developments."
Management believes future growth in the assets and earnings of the Company
will depend in significant part on consummation of acquisitions. The ability of
the Company to pursue this strategy depends in part on its capital position and,
in the case of cash acquisitions, on its cash assets or ability to acquire cash.
Further, acquisition candidates may not be available in the future on terms
favorable to the Company. The Company must compete with a variety of individuals
and institutions, including major regional bank holding companies, for suitable
acquisition candidates. Although the Company has focused its attention on
smaller markets, in which the Company believed there was less competition from
the money center banks and major regional bank holding companies, the Company
recently acquired operations in metropolitan areas. The Company may make further
acquisitions of companies with operations in metropolitan areas, in which case
it will face more competition for such acquisitions from larger institutions.
Further, certain regional holding companies have focused on the smaller markets
traditionally targeted by the Company, and there can be no assurance that the
acquisition activities of competitors in these markets will not increase. Such
competition is likely to affect the Company's ability to make acquisitions,
increase the price that the Company pays for certain acquisitions and increase
the Company's costs in analyzing possible acquisitions.
LOANS AND INVESTMENTS
In allocating assets among locally generated loans, investment assets and
other earning assets, the Company attempts to maximize its return while managing
risk at an acceptable level. Although the Company has a diversified loan
portfolio, the economic health of the Company's primary trade area, and the
ability of many of the Company Banks' borrowers to repay their loans (including
real estate, commercial and agricultural loans) is dependent to a large extent
on the health of the agricultural sector of the economy. The Company's asset
allocation strategies include an emphasis on quality local loan growth and the
diversification and performance of its earning asset portfolios. The Company has
purchased loan assets, including secured discounted lease payments and loan
participations, to enhance the performance of, and to diversify, its asset
portfolios. Many of such loan assets have been originated by regional banks in
the Midwest and national leasing and finance companies with whom the Company has
ongoing business relationships. Such assets are subject to the Company's
standard credit guidelines and bear the credit risks attendant to commercial and
industrial loans.
COMPETITION
Banking is a highly competitive industry. The Company Banks compete directly
with other banks and lending and financial institutions in their local
communities. The Company Banks also compete indirectly with regional and
national financial institutions, especially in larger metropolitan market areas
in which the Company has increased its operations as a result of recent
acquisitions. Further, changes in government regulation of banking, particularly
recent legislation which removes restrictions on interstate banking and permits
interstate branching, are likely to increase competition by out-of-state banking
organizations or by other financial institutions in the Company's smaller
markets as well as its metropolitan market areas.
17
<PAGE>
INTEREST RATES
Banking companies' earnings depend largely on the relationship between the
cost of funds, primarily deposits, and the yield on earning assets. This
relationship, known as the interest rate spread, is subject to fluctuation and
is affected by economic and competitive factors which influence interest rates,
the volume and mix of interest-earning assets and interest-bearing liabilities,
and the level of non-performing assets. The Company is subject to interest rate
risk to the degree that its interest-bearing liabilities reprice or mature more
slowly or more rapidly or on a different basis than its interest earning assets.
Given the Company's current volume and mix of interest-bearing liabilities and
interest earning assets, the Company's interest rate spread could be expected to
increase during times of rising interest rates and, conversely, to decline
during times of falling interest rates. Although the Company believes its
current level of interest rate sensitivity is reasonable, declines in interest
rates may have an adverse effect on the Company's results of operations.
REGULATION
As a bank holding company, the Company is subject to extensive regulation by
the Federal Reserve. This regulation limits the manner in which the Company and
the Company Banks conduct their businesses, undertake new investments and
activities and obtain financing. This regulation is designed primarily for the
protection of the deposit insurance funds and national monetary policies, and
not to benefit holders of securities of financial institutions. In addition, the
Company Banks are each subject to extensive regulation under federal and state
laws, rules and policies, which are subject to change. In September 1996, the
Economic Growth and Regulatory Paperwork Reduction Act of 1996 (the "1996 Act")
was enacted. The 1996 Act included extensive revisions to real estate and
consumer lending laws, as well as changes to bank application and examination
requirements and a financial restructuring of the deposit insurance funds which
will remove the competitive advantage over savings institutions enjoyed by
commercial banks, such as the Company Banks. In September 1994, the Interstate
Banking and Branching Efficiency Act of 1994 (the "1994 Act") was enacted,
generally eliminating all remaining legal restrictions on interstate banking.
The 1994 Act will permit interstate branching beginning June 1, 1997, subject to
states' rights to "opt-in" early, or "opt-out", and to impose certain limited
requirements on out-of-state entrants. To date, over 40 states have adopted
special legislation relating to interstate branching, most of which have
provided interstate branching opportunities in response to the federal law. The
1994 Act is anticipated to continue the trend of increasing consolidation within
the banking industry. The 1994 Act addressed the authority of banking
organizations to combine banking locations under interstate charters, but did
not override the authority of individual states to limit or restrict branching
by local and foreign banks alike. However, recent legislation in several states
has mirrored the trend in federal law to remove legal restrictions on expansion.
For example, effective January 1, 1997, Colorado and North Dakota will permit
unrestricted statewide intrastate branching, which may increase competition in
previously-protected local markets served by the Company. There can be no
assurance that implementation of and changes in federal and state laws and
regulations affecting banking will not adversely affect the Company.
KEY PERSONNEL
Continued profitability of the Company Banks and the Company are dependent
on a limited number of key persons, including Donald R. Mengedoth, the President
and Chief Executive Officer, Mark A. Anderson, the Executive Vice President and
Chief Financial Officer, Ronald K. Strand, the Executive Vice President, Banking
Group, and David E. Groshong, the Executive Vice President, Financial Services,
of the Company. There would likely be a difficult transition period in case the
services of any of these individuals were lost to the Company because of death
or other reasons. There is no assurance that the Company will be able to retain
its current key personnel or attract additional qualified key persons as needed.
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<PAGE>
RECENT DEVELOPMENTS
In 1996, the Company completed the acquisitions described below, each of
which was accounted for as a pooling of interests.
MOUNTAIN PARKS FINANCIAL CORP. On December 18, 1996, the Company acquired
Mountain Parks Financial Corp. ("Mountain Parks"), a bank holding company that
operated a state chartered bank with full service commercial banking facilities
in 17 Colorado communities. At September 30, 1996, Mountain Parks had total
assets of approximately $581.8 million and total stockholders' equity of
approximately $57.1 million. Upon completion of the merger, the Company issued
approximately 5.2 million shares of common stock to the former holders of
Mountain Parks common stock. The market value of the Company's common stock
issued in the merger was approximately $142.2 million, based on the closing
price of Company common stock on the Nasdaq National Market on December 18,
1996.
The Mountain Parks Banks offer a full range of commercial and consumer
banking services and emphasize serving the needs and catering to the economic
strengths of the communities in which they are located. The Mountain Parks
Banks' primary lending focus is on commercial loans, real estate mortgage loans,
residential real estate construction loans and, to a lesser extent, consumer
loans. The operating strategy of the Mountain Parks Banks is to provide a high
level of personal and professional service and to promote employee participation
in community affairs in order to build long-term relationships with established
businesses and individual customers in its market areas.
The Mountain Parks Banks are located in winter ski and summer recreational
areas in the Colorado mountains (Breckenridge, Fairplay, Frisco, Kremmling,
Granby, Grand Lake and Silverthorne) and in the greater Denver/Boulder
metropolitan area (Aurora, Boulder, Conifer, Denver, Elizabeth, Englewood,
Evergreen, Kiowa, Louisville and Parker). Pursuant to an arrangement entered
into with the Federal Reserve to satisfy its concerns about market
concentrations in certain Colorado banking markets, the Company has pending
agreements to sell the Mountain Parks banking offices in Granby and Grand Lake.
As part of the acquisition of Mountain Parks, the Company also acquired (i)
an 85% interest in Equity Lending, Inc., a specialty consumer mortgage company
involved in originating, owning and servicing non-conforming residential
mortgages in Arizona, Colorado, Minnesota and Wisconsin, and (ii) Mountain Parks
Financial Services, Inc., a consumer finance company located in Denver, Colorado
that focuses on the purchase, origination and servicing of consumer installment
contracts, primarily sub-prime auto contracts. On January 3, 1997, the Company
acquired the remaining 15% interest in Equity Lending, Inc.
FINANCIAL BANCORP, INC. On October 1, 1996, the Company acquired Financial
Bancorp, Inc., Trinidad, Colorado ("Financial Bancorp"), the holding company of
Trinidad National Bank (the "Trinidad Bank"). At September 30, 1996, Financial
Bancorp had total assets of approximately $69.5 million and total stockholders'
equity of approximately $9.6 million. Upon completion of the merger, the Company
issued 538,803 shares of common stock to the former holders of Financial Bancorp
common stock. The market value of the Company's common stock issued in the
merger was approximately $12.7 million, based on the closing price of the
Company's common stock on the Nasdaq National Market on September 30, 1996. The
Trinidad Bank is a community bank located in southeastern Colorado which serves
a wide range of commercial, agricultural and consumer banking needs within its
market. The Trinidad Bank is primarily engaged in attracting deposits and
investing those funds in loans and investment securities.
USE OF PROCEEDS
All of the proceeds from the sale of Capital Securities will be invested by
CFB Capital in the Junior Subordinated Debentures. The net proceeds to the
Company from the sale of the Junior Subordinated Debentures of the Company are
estimated to be $ (net of estimated underwriting commission and other
estimated offering expenses). The Company intends to use the net proceeds for
general corporate purposes, which may include without limitation possible future
acquisitions, funding investments in, or
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<PAGE>
extension of credit to, the Company's subsidiaries, repayment of maturing
obligations and redemption of securities. Pending their application, the net
proceeds may be invested in short-term investment grade financial instruments.
The Company is required by the Federal Reserve to maintain certain levels of
capital for bank regulatory purposes. On October 21, 1996, the Federal Reserve
announced that certain qualifying amounts of cumulative preferred securities
having the characteristics of the Capital Securities could be included as Tier 1
capital for bank holding companies. Such Tier 1 capital treatment, together with
the Company's ability to deduct, for federal income tax purposes, interest
payable on the Junior Subordinated Debentures, will provide the Company with a
cost-effective means of obtaining capital for bank regulatory purposes.
ACCOUNTING TREATMENT
For financial reporting purposes, CFB Capital will be treated as a
subsidiary of the Company and, accordingly, the accounts of CFB Capital will be
included in the consolidated financial statements of the Company. The Capital
Securities will be presented as a separate line item in the consolidated balance
sheet of the Company under the caption "Company Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust Holding Solely Junior Subordinated
Debentures," and appropriate disclosures about the Capital Securities, the
Guarantee and the Junior Subordinated Debentures will be included in the notes
to consolidated financial statements. For financial reporting purposes, the
Company will record Distributions payable on the Capital Securities as an
expense in the consolidated statements of operations.
Future reports of the Company filed under the Exchange Act will include a
footnote to the financial statements stating that (i) CFB Capital is
wholly-owned, (ii) the sole assets of CFB Capital are the Junior Subordinated
Debentures (specifying the principal amount, interest rate and maturity date of
such Junior Subordinated Debentures), and (iii) the back-up obligations, in the
aggregate, constitute a full and unconditional guarantee by the Company of the
obligations of CFB Capital under the Capital Securities. CFB Capital will not
provide separate reports under the Exchange Act.
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<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at
September 30, 1996 and as adjusted to give effect to the issuance of the Capital
Securities by CFB Capital in this offering.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
-----------------------
ACTUAL (1) AS ADJUSTED
---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long-term debt:
Capital leases......................................................................... $ 3,093 $ 3,093
Long-term bank debt.................................................................... 4,398 4,398
7.75% Subordinated Notes due 2000...................................................... 23,000 23,000
9.00% Exchangeable Subordinated Notes due 2005......................................... 11,500 11,500
---------- -----------
Total long-term debt................................................................. 41,991 41,991
Company obligated mandatorily redeemable preferred securities of subsidiary trust holding
solely junior subordinated debentures (2)............................................... -- 60,000
Shareholders' equity:
Preferred stock, $.01 par value, 1,770,000 shares authorized; no shares issued......... -- --
7% Cumulative Convertible Preferred Stock, $100 stated value; 230,000 shares
authorized; 229,975 shares issued and outstanding..................................... 22,997 22,997
Common stock, $.01 par value, 30,000,000 shares authorized; 16,532,714 shares issued
and outstanding (3)................................................................... 165 165
Capital surplus........................................................................ 70,114 70,114
Retained earnings...................................................................... 134,199 134,199
Treasury stock, 30,511 shares.......................................................... (696) (696)
---------- -----------
Total shareholders' equity........................................................... 226,779 226,779
---------- -----------
Total capitalization............................................................... $ 268,770 $ 328,770
---------- -----------
---------- -----------
</TABLE>
- ------------------------
(1) Actual capitalization as of September 30, 1996 has been restated to reflect
the acquisition of Mountain Parks, which occurred on December 18, 1996, but
has not been restated to reflect the acquisition of Financial Bancorp on the
basis that the effect of that acquisition is not material to this
information.
(2) The subsidiary trust is CFB Capital I, a wholly-owned subsidiary of the
Company that will hold the Junior Subordinated Debentures as its sole asset.
The Capital Securities are issued by CFB Capital. The sole assets of CFB
Capital consist of approximately $61.8 million principal amount of Junior
Subordinated Debentures issued by the Company to CFB Capital. The Junior
Subordinated Debentures will bear interest at the rate of % per annum
and will mature on February , 2027, which date may be shortened to a date
not earlier than February , 2002 if certain conditions are met. The Junior
Subordinated Debentures are redeemable prior to maturity at the option of
the Company, subject to any required prior approval of the Federal Reserve,
(i) on or after February , 2002, in whole at any time or in part from time
to time, or (ii) at any time, in whole (but not in part), upon the
occurrence and continuation of a Tax Event or an Investment Company Event
(each as defined herein). See "Description of Junior Subordinated Debentures
-- Redemption." The Company owns all of the Common Securities of CFB
Capital.
(3) Excludes (i) 1,443,323 shares of common stock issuable upon the conversion
of the 229,975 shares of outstanding 7% Cumulative Convertible Preferred
Stock, (ii) 535,381 shares of common stock issuable pursuant to outstanding
stock options and (iii) 2,022,105 shares of common stock issuable pursuant
to options which may be granted under the Company's stock option plans.
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MANAGEMENT
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------- --- --------------------------------------------------------------
<S> <C> <C>
Donald R. Mengedoth 52 President, Chief Executive Officer and Chairman of the Board
Mark A. Anderson, CFA 39 Executive Vice President, Chief Financial Officer, Secretary
and Treasurer
Ronald K. Strand 50 Executive Vice President Banking Group
David E. Groshong 48 Executive Vice President Financial Services
Thomas E. Hansen 44 Senior Vice President and Central Region Manager
Bruce A. Heysse 45 Senior Vice President Acquisitions
Thomas A. Hilt 54 Senior Vice President Operations and Administration
Gary A. Knutson 49 Senior Vice President and Western Region Manager
David A. Lee 53 Senior Vice President and Eastern Region Manager
Patricia J. Staples 41 Senior Vice President Marketing
Patricia A. Adam 60 Director
James T. Anderson 57 Director
Patrick E. Benedict 63 Director
Patrick Delaney 54 Director
John H. Flittie 60 Director
Cargill MacMillan, Jr. 69 Director
Dennis M. Mathisen 57 Director
Dean E. Smith 65 Director
Thomas C. Wold 59 Director
Harvey L. Wollman 61 Director
</TABLE>
Donald R. Mengedoth has been President, Chief Executive Officer, Chairman of
the Board and a director of the Company since its organization in 1986. He was
Senior Vice President of First Bank System, Inc. ("FBS") from 1982 to 1987 and
has worked in the banking business since 1966, including management positions in
retail banking operations, human resources and commercial lending. From 1984 to
1987, Mr. Mengedoth was Regional Managing Director of FBS. From 1979 to 1982,
Mr. Mengedoth was Vice President -- Operations for FBS. Prior to that time, he
was Senior Vice President of First Bank Milwaukee.
Mark A. Anderson has been Executive Vice President, Chief Financial Officer,
Secretary and Treasurer of the Company since its organization in 1986. He was
Vice President and Regional Controller for FBS from 1984 to 1987. From 1979 to
1984, he held various positions with FBS-affiliated banks in the finance and
credit analysis areas. Mr. Anderson is a Chartered Financial Analyst and a
Certified Management Accountant.
Ronald K. Strand has been Executive Vice President Banking Group since
February 1993. He was previously Senior Vice President and Regional Manager for
South Dakota and North Dakota for the Company from January 1991 to February
1993. Previously, Mr. Strand had been Vice President and
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<PAGE>
Regional Manager for the Company and President, Chief Executive Officer and a
director of the Company's affiliate bank in Wahpeton, North Dakota since 1988.
Prior to his affiliation with the Company, he served as President and Chief
Executive Officer of Norwest Bank of North Dakota, N.A., Wahpeton, from 1985
until 1988. He was employed by Norwest for a total of 15 years, having
previously worked in Norwest banks in Jamestown, North Dakota and Moorhead,
Minnesota.
David E. Groshong has been Executive Vice President Financial Services since
May 1996. He was previously Chairman and Chief Executive Officer of the
Company's affiliate bank in Alliance, Nebraska from May 1995 to May 1996.
Previously, Mr. Groshong had been President and Chief Executive of the Company's
affiliate bank in Fergus Falls, Minnesota since 1992 and as Senior Vice
President and Senior Loan Officer of the Fargo Bank since 1985. He was employed
by Norwest Bank of Minnesota, N.A. for a total of eight years and prior to that
worked in the consumer finance industry.
Thomas E. Hansen has been Senior Vice President and Central Region Manager
since April 1993. He also served as President, Chief Executive Officer and
director of the Company's affiliate bank in Fargo, North Dakota from April 1993
to December 1996. Previously, he was employed by Norwest Bank Fargo for 19
years, most recently as President.
Bruce A. Heysse has been Senior Vice President Acquisitions since June 1996.
He was Senior Vice President and Integration Manager of the Company since
November 1995. He was Vice President and Senior Credit Officer of the Company
from 1987 to November 1995. He began his banking career at the Company's
affiliate bank in Wahpeton, North Dakota, and had a total of 11 years of banking
experience prior to joining the Company.
Thomas A. Hilt has been Senior Vice President Operations and Administration
of the Company since 1987 and President of Community First Service Corporation,
the Company's data processing subsidiary, since 1988. He was Vice President and
Manager Operations Support for the Regional Division of FBS from 1984 to 1987.
Prior to 1984, he held various positions with FBS since 1967, including
responsibility for systems development, programming, audit and examination
functions.
Gary A. Knutson has been Senior Vice President and Western Region Manager of
the Company since September 1993. He was President, Chief Executive Officer and
director of the Company's affiliate bank in Wahpeton, North Dakota from January
1991 to September 1993. He began his banking career at the Company's affiliate
bank in Lidgerwood, North Dakota, and had a total of 14 years of banking
experience prior to joining the Company.
David A. Lee has been Senior Vice President and Eastern Region Manager of
the Company since January 1991. He had been a Region Manager of the Company
since 1987. He was President and Chief Executive Officer and a director of the
Company's affiliate bank in Little Falls from 1988 to January 1993. Mr. Lee held
various positions with FBS from 1966 to 1982.
Patricia J. Staples has been Senior Vice President Marketing since July
1994. Previously, Ms. Staples was employed as the public relations manager with
MeritCare Health System for 10 years.
Patricia A. Adam is Secretary to the South Dakota Senate and is active in
various service, civic and community organizations in Pierre, South Dakota. Ms.
Adam is or has been a member of the Boards of Directors of the South Dakota
Historical Society, where she serves as President, of the South Dakota Discovery
Center and Aquarium, where she served as President, of the Children's Care
Hospital and School in Sioux Falls, South Dakota, the University of South Dakota
Foundation, the Associated School Board of South Dakota, where she served as
President for two years, and the Pierre, South Dakota Independent School Board
where she served as President for five years. Ms. Adam previously served as a
member of the Board of Directors of First National Bank, Selby, South Dakota.
She has been a director of the Company since 1987.
James T. Anderson has been the Vice President and Treasurer of U S WEST,
Inc., a telecommunications service provider located in Englewood, Colorado,
since 1984. Mr. Anderson held various positions in the Bell System from 1963 to
1984. Mr. Anderson has been a director of the Company since August 1993.
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<PAGE>
Patrick E. Benedict is the owner of Benedict Farms, Inc., a 6,000-acre
farming operation in Sabin, Minnesota. Mr. Benedict has been an advisory
director to the Board of Directors of the Company's affiliate bank in Fargo,
North Dakota since 1995 and was a director of the Company's affiliate bank in
Fargo, North Dakota from 1984 to 1995. Mr. Benedict is chairman of Golden
Growers Coop and of Pro Gold LLC, a North Dakota corn processing company that is
49% owned by Golden Growers. He also serves on the executive committee and Board
of Directors of the Neuropsychiatric Research Institute, the Board of Directors
of MeritCare Health System, and is chairman of Northern Grain Company, all in
Fargo, North Dakota. Mr. Benedict is chairman emeritus of American Crystal Sugar
Company and past chairman of the Moorhead State University Foundation, both in
Moorhead, Minnesota. He has been a director of the Company since 1992.
Patrick Delaney is a partner in the Minneapolis, Minnesota law firm of
Lindquist & Vennum P.L.L.P., counsel to the Company. He has been a lawyer since
1967. Mr. Delaney is the secretary of MTS Systems Corporation, a
Minneapolis-based manufacturer of systems for materials testing, measurement and
simulation. He is also a director and the Secretary of CNS, Inc. and a director
and Secretary of Applied Biometrics, Inc., both of which companies are medical
device manufacturers based in Minneapolis. He has been a director of the Company
since 1987.
John H. Flittie has been the President and Chief Operating Officer of
ReliaStar Financial Corp., formerly The NWNL Companies, Inc., a
Minneapolis-based insurance and financial services company, since July 1993. Mr.
Flittie held various positions with NWNL and Northwestern National from 1985 to
July 1993. From 1976 to 1985, Mr. Flittie was a partner at Touche Ross & Co., an
audit and consulting firm. Mr. Flittie is a member of the Board of Directors of
ReliaStar Financial Corp. and various subsidiaries of ReliaStar. He has been a
director of the Company since 1993.
Cargill MacMillan, Jr. is a director of Cargill Incorporated of Minnetonka,
Minnesota. Mr. MacMillan has spent his entire career with Cargill and until 1987
served as Chairman of the Finance Committee and until 1989 served as Senior Vice
President. He has served previously as a bank director and is currently a member
of the board of directors of several civic and charitable organizations. He has
been a director of the Company since 1987.
Dennis M. Mathisen served as Chairman of the Board, President and Chief
Executive Officer of Mountain Parks from its formation in 1981 until the
acquisition of Mountain Parks by the Company in December 1996. Since 1974, he
served as a director and principal officer of rural and suburban commercial
banks located in Colorado and Minnesota. He has also served as the President of
Marshall Financial Group (a provider of management, financing and merger and
acquisition services) since 1989. Mr. Mathisen is a member of the Board of
Directors of Transportation Corporation of America, a midwestern trucking
company; the Harlem Globetrotters, International, an international sports
entertainment company; and Horizon Asset Management, LLP, a registered asset
management company. Mr. Mathisen has been a director of the Company since
December 1996.
Dean E. Smith, a private investor, was the Managing General Partner of The
Robins Group, a private investment partnership, from 1983 to 1996. Mr. Smith
held various positions with First National Bank of Minneapolis from 1955 to
1967. Mr. Smith has served previously as a director of Citizens State Bank of
Green Isle, Green Isle, Minnesota, and Resource Bank and Trust Company,
Minneapolis, Minnesota. Mr. Smith has been a director of the Company since 1993.
Thomas C. Wold has been a practicing attorney in Fargo, North Dakota since
1962 and is President and a shareholder of the law firm of Wold Johnson, P.C. He
is active in the development of motels, apartments and other real estate
projects. He has been actively involved in a number of civic and charitable
organizations. He has been a director of the Company since 1987.
Harvey L. Wollman is a farmer in Frankfurt, South Dakota. Mr. Wollman served
in the South Dakota State Senate from 1968 to 1974, was Lieutenant Governor from
1974 to 1977, and served as Governor of South Dakota in 1978. Mr. Wollman has
served on various State government committees and is active in various service,
civic and community organizations. He has been a director of the Company since
1987.
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<PAGE>
DESCRIPTION OF THE CAPITAL SECURITIES
The Capital Securities and the Common Securities will be issued pursuant to
the terms of the Trust Agreement. The Trust Agreement will be qualified as an
indenture under the Trust Indenture Act. Initially, Wilmington Trust Company
will be the Delaware Trustee and the Property Trustee and will act as trustee
for the purpose of complying with the Trust Indenture Act. The terms of the
Capital Securities will include those stated in the Trust Agreement and those
made part of the Trust Agreement by the Trust Indenture Act. This summary of
certain terms and provisions of the Capital Securities and the Trust Agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Trust Agreement, including
the definitions therein of certain terms, and the Trust Indenture Act. Wherever
particular defined terms of the Trust Agreement (as amended or supplemented from
time to time) are referred to herein, such defined terms are incorporated
herein. The form of the Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
GENERAL
Pursuant to the terms of the Trust Agreement, the Administrative Trustees on
behalf of CFB Capital will issue the Capital Securities and the Common
Securities (collectively, the "Trust Securities"). The Capital Securities will
represent preferred undivided beneficial interests in the assets of CFB Capital
and the holders thereof will be entitled to a preference in certain
circumstances with respect to Distributions and amounts payable on redemption or
liquidation over the Common Securities of CFB Capital (which will be held by the
Company), as well as other benefits as described in the Trust Agreement.
The Capital Securities will rank PARI PASSU, and payments will be made
thereon pro rata, with the Common Securities of CFB Capital except as described
under "Subordination of Common Securities of CFB Capital Held by the Company"
below.
Legal title to the Junior Subordinated Debentures will be held by the
Property Trustee in trust for the benefit of the holders of the Trust
Securities. The Guarantee executed by the Company for the benefit of the holders
of the Capital Securities (the "Guarantee") will be a guarantee on a
subordinated basis and will not guarantee payment of Distributions or amounts
payable on redemption of the Capital Securities or on liquidation of the Capital
Securities if CFB Capital does not have funds on hand available to make such
payments. See "Description of Guarantee."
DISTRIBUTIONS
PAYMENT OF DISTRIBUTIONS. Distributions on the Capital Securities will be
payable at the annual rate of % of the stated Liquidation Amount of $25,
payable quarterly in arrears on the 15th day of April, July, October and January
in each year, commencing April 15, 1997 to the holders of the Capital Securities
on the relevant record dates (each date on which Distributions are payable in
accordance with the foregoing, a "Distribution Date"). The amount of each
distribution due with respect to the Capital Securities will include amounts
accrued through the date the distribution payment is due. Distributions on the
Capital Securities will be payable to the holders thereof as they appear on the
register of CFB Capital on the relevant record date which, for so long as the
Capital Securities remain in book-entry form, will be one Business Day (as
defined below) prior to the relevant Distribution Date and, in the event the
Capital Securities are not in book-entry form, will be the 1st day of the month
in which the relevant Distribution Date occurs. Distributions will accumulate
from the date of original issuance. The first Distribution Date for the Capital
Securities will be April 15, 1997.
The amount of Distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which Distributions are payable on the Capital Securities is not a Business Day,
payment of the Distribution payable on such date will be made on the next
Business Day (and without any interest or other payment in respect to any such
delay) except that, if such Business Day is in the next succeeding calendar
year, payment of such Distribution shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on the date
such payment was
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originally payable. As used in this Prospectus, a "Business Day" shall mean any
day other than a Saturday or a Sunday, or a day on which banking institutions in
the State of Minnesota are authorized or required by law or executive order to
remain closed or a day on which the corporate trust office of the Property
Trustee or the Indenture Trustee is closed for business.
The funds of CFB Capital available for distribution to holders of its
Capital Securities will be limited to payments by the Company under the Junior
Subordinated Debentures in which CFB Capital will invest the proceeds from the
issuance and sale of its Capital Securities. See "Description of Junior
Subordinated Debentures." If the Company 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 CFB Capital has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Company. See "Description of Guarantee."
EXTENSION PERIOD. So long as no Debenture Event of Default has occurred and
is continuing, the Company has the right under the Indenture to defer the
payment of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 20 consecutive quarters with respect to
each such period (each, an "Extension Period"), provided that no Extension
Period may extend beyond the Stated Maturity of the Junior Subordinated
Debentures. As a consequence of any such election, quarterly Distributions on
the Capital Securities will be deferred by CFB Capital during any such Extension
Period. Distributions to which holders of Capital Securities are entitled will
accumulate additional amounts thereon at the rate per annum of % thereof,
compounded quarterly from the relevant Distribution Date, to the extent
permitted under applicable law. The term "Distributions" as used herein shall
include any such additional accumulated amounts. During any such Extension
Period, the Company may not (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock (which includes common and preferred stock)
or (ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank PARI PASSU
with or junior in interest to the Junior Subordinated Debentures or 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
with or junior in interest to the Junior Subordinated Debentures (other than (a)
dividends or distributions in common stock of the Company, (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 and (d) purchases of common stock for issuance under any of the
Company's benefit plans for its directors, officers or employees). Prior to the
termination of any such Extension Period, the Company may further extend such
Extension Period, provided that such extension does not cause such Extension
Period to exceed 20 consecutive quarters or extend beyond the Stated Maturity.
Upon the termination of any such Extension Period and the payment of all amounts
then due, and subject to the foregoing limitations, the Company may elect to
begin a new Extension Period. Subject to the foregoing, there is no limitation
on the number of times that the Company may elect to begin an Extension Period.
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures.
REDEMPTION
MANDATORY REDEMPTION. Upon the repayment or redemption at any time, in
whole or in part, of any Junior Subordinated Debentures, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days' notice of a date of redemption (the "Redemption Date"),
at the Redemption Price (as defined below). See "Description of Junior
Subordinated Debentures -- Redemption." If less than all of
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the Junior Subordinated Debentures are to be repaid or redeemed on a Redemption
Date, then the proceeds from such repayment or redemption shall be allocated to
the redemption of the Trust Securities pro rata.
OPTIONAL REDEMPTION. The Company will have the right to redeem the Junior
Subordinated Debentures (i) on or after February , 2002, in whole at any time
or in part from time to time at a redemption price equal to the accrued and
unpaid interest on the Junior Subordinated Debentures so redeemed to the date
fixed for redemption, plus 100% of the principal amount thereof, or (ii) at any
time, in whole (but not in part), upon the occurrence of a Tax Event or an
Investment Company Event at a redemption price equal to the accrued and unpaid
interest on the Junior Subordinated Debentures so redeemed to the date fixed for
redemption, plus 100% of the principal amount thereof, in each case subject to
receipt of prior approval by the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve. See
"Description of Junior Subordinated Debentures -- Redemption."
TAX EVENT REDEMPTION, INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION OF
JUNIOR SUBORDINATED DEBENTURES. If a Tax Event or an Investment Company Event
shall occur and be continuing, the Company has the right to redeem the Junior
Subordinated Debentures in whole (but not in part) and thereby cause a mandatory
redemption of the Trust Securities in whole (but not in part) at the Redemption
Price (as defined below) within 90 days following the occurrence of such Tax
Event or Investment Company Event, in each case subject to receipt of prior
approval by the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. In the event a Tax Event or an
Investment Company Event has occurred and is continuing and the Company does not
elect to redeem the Junior Subordinated Debentures and thereby cause a mandatory
redemption of the Trust Securities or to liquidate CFB Capital and cause the
Junior Subordinated Debentures to be distributed to holders of the Trust
Securities in liquidation of CFB Capital as described below, such Trust
Securities will remain outstanding and Additional Sums (as defined below) may be
payable on the Junior Subordinated Debentures.
DEFINITIONS.
"Additional Sums" means the additional amounts as may be necessary to be
paid by the Company with respect to the Junior Subordinated Debentures in order
that the amount of Distributions then due and payable by CFB Capital on the
outstanding Trust Securities of CFB Capital shall not be reduced as a result of
any additional taxes, duties and other governmental charges to which CFB Capital
has become subject.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount (as defined below) equal to that
portion of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and the proceeds of which will be used to
pay the Redemption Price of such Trust Securities, and (ii) with respect to a
distribution of Junior Subordinated Debentures to holders of Trust Securities in
connection with a dissolution or liquidation of CFB Capital, Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the holder to whom such Junior Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, allocated on a pro rata basis (based on
Liquidation Amounts) among the Trust Securities.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
Subject to the Company having received prior approval of the Federal Reserve
if so required under applicable capital guidelines or policies of the Federal
Reserve, the Company will have the right at any time to liquidate CFB Capital
and, after satisfaction of the liabilities of creditors of CFB Capital as
provided by applicable law, cause the Junior Subordinated Debentures to be
distributed to the holders of Trust Securities
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in liquidation of CFB Capital. After the liquidation date fixed for any
distribution of Junior Subordinated Debentures for Capital Securities (i) such
Capital Securities will no longer be deemed to be outstanding, (ii) the
Depositary or its nominee, as the record holder of the Capital Securities, will
receive a registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution and (iii) any
certificates representing Capital Securities not held by the Depositary or its
nominee will be deemed to represent the Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of such Capital Securities, and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on the Capital Securities until such certificates are presented to
the Administrative Trustees or their agent for transfer or reissuance.
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 Capital Securities if a dissolution and liquidation of CFB Capital 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 CFB Capital, may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered hereby.
REDEMPTION PROCEDURES
Capital Securities redeemed on each Redemption Date shall be redeemed at the
Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Junior Subordinated Debentures. Redemptions of the Capital
Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that CFB Capital has funds on hand available
for the payment of such Redemption Price. See "-- Subordination of Common
Securities of CFB Capital Held by the Company" and "-- Guarantee."
If CFB Capital gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, Minneapolis time, on the Redemption Date, to
the extent funds are available, the Property Trustee will deposit with the
Depositary funds sufficient to pay the aggregate Redemption Price and will give
the Depositary irrevocable instructions and authority to pay the Redemption
Price to the holders of such Capital Securities. See "Book-Entry Issuance." If
such Capital Securities are no longer in book-entry form, the Property Trustee,
to the extent funds are available, will deposit with the paying agent for such
Capital Securities funds sufficient to pay the aggregate Redemption Price and
will give such paying agent irrevocable instructions and authority to pay the
Redemption Price to the holders thereof upon surrender of their certificates
evidencing such Capital Securities. 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 will cease, except the right of the holders of
the 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 date fixed for redemption of such Capital
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of the Redemption
Price in respect of Capital Securities called for redemption is improperly
withheld or refused and not paid either by CFB Capital or by the Company
pursuant to the Guarantee, Distributions on such Capital Securities will
continue to accrue at the then applicable rate, from the Redemption Date
originally established by CFB Capital for such Capital Securities to the date
such Redemption Price is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating the Redemption
Price. See "Description of Guarantee."
Subject to applicable law (including, without limitation, United States
federal securities law), the Company may at any time and from time to time
purchase outstanding Capital Securities by tender, in the open market or by
private agreement.
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Payment of the Redemption Price on the Capital Securities and any
distribution of Junior Subordinated Debentures to holders of Capital Securities
shall be made to the applicable recordholders thereof as they appear on the
register of such Capital Securities on the relevant record date, which date
shall be one Business Day prior to the relevant Redemption Date or Liquidation
Date, as applicable; provided, however, that in the event that any Capital
Securities are not in book-entry form, the relevant record date for such Capital
Securities shall be a date at least 15 days prior to the Redemption Date or
Liquidation Date, as applicable. In the case of a liquidation, the record date
shall be no more than 45 days before the Liquidation Date.
If less than all of the Trust Securities issued by CFB Capital are to be
redeemed on a Redemption Date, then the aggregate Redemption Price for such
Trust Securities to be redeemed shall be allocated pro rata to the Capital
Securities and Common Securities based upon the relative Liquidation Amounts of
such classes. The particular Capital Securities to be redeemed shall be selected
by the Property Trustee from the outstanding Capital Securities not previously
called for redemption, by such method as the Property Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $25 or an integral multiple thereof) of the Liquidation
Amount of Capital Securities. The Property Trustee shall promptly notify the
Trust Securities registrar in writing of the Capital Securities selected for
redemption and, in the case of any Capital Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
the Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate to the portion of
the aggregate Liquidation Amount of Capital Securities which has been or is to
be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities at such
holder's registered address. Unless CFB Capital defaults in payment of the
applicable Redemption Price, on and after the Redemption Date, Distributions
will cease to accrue on such Capital Securities called for redemption.
SUBORDINATION OF COMMON SECURITIES OF CFB CAPITAL HELD BY THE COMPANY
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities, as applicable, shall be made pro rata based on
the Liquidation Amounts of the Capital Securities and Common 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 on all of the outstanding Capital Securities then called
for redemption, shall have been made or provided for, and all funds available to
the Property Trustee shall first be applied to the payment in full in cash of
all Distributions on, or Redemption Price of, the Capital Securities then due
and payable.
In the case of any Event of Default under the Trust Agreement resulting from
a Debenture Event of Default, the Company as holder of the Common Securities
will be deemed to have waived any right to act with respect to any such Event of
Default until the effect of all such Events of Default have been cured, waived
or otherwise eliminated. Until any such Events of Default have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the holders of the Capital Securities and not on behalf of the Company 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.
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LIQUIDATION DISTRIBUTION UPON TERMINATION
The Company will have the right at any time to terminate CFB Capital and
cause the Junior Subordinated Debentures to be distributed to the holders of the
Capital Securities. Such right is subject to the Company having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. See "Distribution of Junior
Subordinated Debentures" above.
In addition, pursuant to the Trust Agreement, CFB Capital shall
automatically terminate upon expiration of its term and shall earlier terminate
on the first to occur of: (i) certain events of bankruptcy, dissolution or
liquidation of the Company; (ii) delivery by the Company of written direction to
the Property Trustee to terminate CFB Capital (which direction is optional and
wholly within the discretion of the Company); (iii) redemption of all of the
Capital Securities as described under "Description of the Capital Securities --
Redemption -- Mandatory Redemption;" and (iv) the entry of an order for the
dissolution of CFB Capital by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
above or upon the expiration of the term of CFB Capital, CFB Capital shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of CFB
Capital as provided by applicable law, to the holders of such Trust Securities a
Like Amount of the Junior Subordinated Debentures, unless such distribution is
determined by the Property Trustee not to be practical, in which event such
holders will be entitled to receive out of the assets of CFB Capital available
for distribution to holders, after satisfaction of liabilities to creditors of
CFB Capital as provided by applicable law, an amount equal to, in the case of
holders of Capital Securities, the aggregate of the Liquidation Amount of $25
per Trust Security plus accrued 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 CFB Capital has insufficient
assets available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by CFB Capital on the Capital Securities shall be paid
on a pro rata basis. The holder(s) of the Common Securities will be entitled to
receive distributions upon any such liquidation pro rata with the holders of the
Capital Securities, except that if a Debenture Event of Default has occurred and
is continuing, the Capital Securities shall have a priority over the Common
Securities.
Under current United States federal income tax law and interpretations and
assuming, as expected, CFB Capital is treated as a grantor trust, a distribution
of the Junior Subordinated Debentures should not be a taxable event to holders
of the Capital Securities. Should there be a change in law, a change in legal
interpretation, a Tax Event or other circumstances, however, the distribution
could be a taxable event to holders of the Capital Securities. See "Certain
Federal Income Tax Consequences." If the Company elects neither to redeem the
Junior Subordinated Debentures prior to maturity nor to liquidate CFB Capital
and distribute the Junior Subordinated Debentures to holders of the Capital
Securities, the Capital Securities will remain outstanding until the repayment
of the Junior Subordinated Debentures.
If the Company elects to liquidate CFB Capital and thereby causes the Junior
Subordinated Debentures to be distributed to holders of the Capital Securities
in liquidation of CFB Capital, the Company shall continue to have the right to
shorten the maturity of such Junior Subordinated Debentures, subject to certain
conditions. See "Description of Junior Subordinated Debentures -- General."
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EVENTS OF DEFAULT; NOTICE
Any one of the following events that has occurred and is continuing
constitutes an "Event of Default" under the Trust Agreement (an "Event of
Default") with respect to the Capital Securities (whatever the reason for such
Event of Default and whether it 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) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of Junior Subordinated Debentures -- Debenture Events of
Default"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in the Trust Agreement (other than
a default or breach in the performance of a covenant or warranty which is
addressed in clause (ii) or (iii) above), and continuation of such default
or breach, for a period of 60 days after there has been given, by registered
or certified mail, to the defaulting Trustee or Trustees by the holders of
at least 25% in aggregate Liquidation Amount of the outstanding Capital
Securities, a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.
Within five 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 Company, unless such Event of Default shall have
been cured or waived. The Company 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 upon termination
of CFB Capital as described above. See "-- Liquidation Distribution Upon
Termination." Upon a Debenture Event of Default, unless the principal of all the
Junior Subordinated Debentures has already become due and payable, either the
Property Trustee or the holders of not less than 25% in aggregate principal
amount of the Junior Subordinated Debentures then outstanding may declare all of
the Junior Subordinated Debentures to be due and payable immediately by giving
notice in writing to the Company (and to the Property Trustee, if notice is
given by holders of the Junior Subordinated Debentures). If the Property Trustee
or the holders of the Junior Subordinated Debentures fail to declare the
principal of all of the Junior Subordinated Debentures due and payable upon a
Debenture Event of Default, the holders of at least 25% in Liquidation Amount of
the Capital Securities then outstanding shall have the right to declare the
Junior Subordinated Debentures immediately due and payable. In either event,
payment of principal and interest on the Junior Subordinated Debentures shall
remain subordinated to the extent provided in the Indenture. In addition,
holders of the Capital Securities have the right in certain circumstances to
bring a Direct Action (as hereinafter defined). See "Description of Junior
Subordinated Debentures -- Enforcement of Certain Rights by Holders of Capital
Securities."
REMOVAL OF TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any 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
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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 Company as the holder of the Common
Securities. No resignation or removal of a Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of Trust Property may at
the time be located, the Company, as the holder of the Common Securities, and
the Administrative Trustees shall have power to appoint one or more persons
either to act as a co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such person or persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the Trust Agreement. In case a Debenture Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
such appointment.
MERGER OR CONSOLIDATION OF TRUSTEES
Any Person (as defined in the Trust Agreement) 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 Trustee shall be a party, or any person succeeding to all or substantially
all the corporate trust business of such Trustee, shall be the successor of such
Trustee under the Trust Agreement, provided such corporation shall be otherwise
qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF CFB CAPITAL
CFB Capital may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. CFB Capital may, at the request of the Company, with the
consent of the Administrative Trustees and 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 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 CFB Capital with respect to the Capital Securities or (b)
substitutes for the Capital Securities other securities having substantially the
same terms as the Capital Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Capital Securities rank in priority
with respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) the Company expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Junior Subordinated Debentures, (iii) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect,
(iv) such successor entity has a purpose identical to that of CFB Capital, (v)
the Successor Securities will be listed or traded on any national securities
exchange or other organization on which the Capital Securities may then be
listed, (vi) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Company has received an opinion from
independent counsel to CFB Capital experienced in such matters to the effect
that (a) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Capital Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
CFB Capital nor such successor entity will be required to register as an
investment company under the Investment Company Act and (vii) the Company or any
permitted successor or designee owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity under
the
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Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, CFB Capital shall not, except with the consent of
holders of 100% in Liquidation Amount of the Capital Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause CFB Capital or the successor entity to be
classified as other than a grantor trust for United States federal income tax
purposes.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "Description of Guarantee -- Amendments
and Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Capital Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the Company, 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, or (ii) to modify, eliminate
or add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that CFB Capital will be classified for United States
federal income tax purposes as a grantor trust at all times that any Trust
Securities are outstanding or to ensure that CFB Capital will not be required to
register as an "investment company" under the Investment Company Act; provided,
however, that in the case of clause (i), such action shall not adversely affect
in any material respect the interests of any holder of Trust Securities, and any
amendments of the Trust Agreement shall become effective when notice thereof is
given to the holders of the Trust Securities. The Trust Agreement may be amended
by the Trustees and the Company with (i) the consent of holders representing not
less than a majority of the aggregate Liquidation Amount of the outstanding
Trust Securities, and (ii) receipt by the Trustees of an opinion of counsel to
the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect CFB Capital's status
as a grantor trust for United States federal income tax purposes or CFB
Capital'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 Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
the Junior Subordinated Debentures, (ii) waive any past default that is waivable
under the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Junior Subordinated Debentures shall be due and
payable or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in aggregate Liquidation Amount of all outstanding the Capital
Securities; provided, however, that where a consent under the Indenture would
require the consent of each holder of Junior Subordinated Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior consent of each holder of the Capital Securities. The 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 the holders of the Capital
Securities. The Property Trustee shall notify each holder of the 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
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foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that CFB Capital 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 the Capital Securities may be given at a
meeting of holders of Capital Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of the 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 the Capital Securities in the manner set forth in
the Trust Agreement.
No vote or consent of the holders of the Capital Securities will be required
for CFB Capital 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 Company, the Trustees or any affiliate of the
Company or any Trustees, shall, for purposes of such vote or consent, be treated
as if they were not outstanding.
GLOBAL CAPITAL SECURITIES
The Capital Securities will be represented by one or more global
certificates registered in the name of the Depositary or its nominee ("Global
Capital Security"). Beneficial interests in the Capital Securities will be shown
on, and transfers thereof will be effected only through, records maintained by
participants in the Depositary. Except as described below, Capital Securities in
certificated form will not be issued in exchange for the global certificates.
See "Book-Entry Issuance."
A global security shall be exchangeable for Capital Securities registered in
the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
depositary for such global security and no successor depositary shall have been
appointed, or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, at a time when
the Depositary is required to be so registered to act as such depositary, (ii)
the Company in its sole discretion determines that such global security shall be
so exchangeable, or (iii) there shall have occurred and be continuing an Event
of Default under the Indenture. Any global security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for definitive
certificates registered in such names as the Depositary shall direct. It is
expected that such instructions will be based upon directions received by the
Depositary with respect to ownership of beneficial interests in such global
security. In the event that Capital Securities are issued in definitive form,
such Capital Securities will be in denominations of $25 and integral multiples
thereof and may be transferred or exchanged at the offices described below.
Unless and until it is exchanged in whole or in part for the individual
Capital Securities represented thereby, a Global Capital Securities may not be
transferred except as a whole by the Depositary to a nominee of such the
Depositary or by a nominee of such the Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee to a successor
Depositary or any nominee of such successor.
Payments on Capital Securities represented by a global security will be made
to the Depositary, as the depositary for the Capital Securities. In the event
the Capital Securities are issued in definitive form, Distributions will be
payable, the transfer of the Capital Securities will be registrable, and Capital
Securities will be exchangeable for Capital Securities of other denominations of
a like aggregate Liquidation Amount, at the corporate office of the Property
Trustee, or at the offices of any paying agent or transfer agent appointed by
the Administrative Trustees, provided that payment of any Distribution may be
made at the option of the Administrative Trustees by check mailed to the address
of the persons entitled thereto or by wire transfer. In addition, if the Capital
Securities are issued in certificated form, the record dates for
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payment of Distributions will be the 15th day of the month in which the relevant
Distribution Date occurs. For a description of the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other notices and other matters, see "Book-Entry Issuance."
Upon the issuance of a Global Capital Security, and the deposit of such
Global Capital Security with or on behalf of the Depositary, the Depositary for
such Global Capital Security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate Liquidation Amounts
of the individual Capital Securities represented by such Global Capital
Securities to the accounts of Participants. Such accounts shall be designated by
the dealers, underwriters or agents with respect to such Capital Securities.
Ownership of beneficial interests in a Global Capital Security will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Capital Security will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by the applicable Depositary or its nominee (with respect to
interests of Participants) and the records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to transfer beneficial interests in a Global Capital Security.
So long as the Depositary for a Global Capital Security, or its nominee, is
the registered owners of such Global Capital Security, such Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Capital Securities represented by such Global Capital Security for all purposes
under the Trust Agreement governing such Capital Securities. Except as provided
below, owners of beneficial interests in a Global Capital Security will not be
entitled to have any of the individual Capital Securities represented by such
Global Capital Security registered in their names, will not receive or be
entitled to receive physical delivery of any such Capital Securities in
definitive form and will not be considered the owners or holders thereof under
the Trust Agreement.
None of the Company, the Property Trustee, any Paying Agent, or the
Securities Registrar (defined below) for such Capital Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global Capital
Security representing such Capital Securities or for maintaining supervising or
reviewing any records relating to such beneficial ownership interests.
The Company expects that the Depositary for Capital Securities or its
nominee, upon receipt of any payment of the Liquidation Amount or Distributions
in respect of a permanent Global Capital Security immediately will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the aggregate Liquidation Amount of such
Global Capital Security as shown on the records of such Depositary or its
nominee. The Company also expects that payments by Participants to owners of
beneficial interests in such Global Capital Security held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility of
such Participants.
If the Depositary for the Capital Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, CFB Capital will issue individual
Capital Securities in exchange for the Global Capital Security. In addition, CFB
Capital may at any time and in its sole discretion, subject to any limitations
described herein relating to such Capital Securities, determine not to have any
Capital Securities represented by one or more Global Capital Securities and, in
such event, will issue individual Capital Securities in exchange for the Global
Capital Security or Securities representing the Capital Securities. Further, if
CFB Capital so specifies with respect to the Capital Securities, an owner of a
beneficial interest in a Global Capital Security representing Capital Securities
may, on terms acceptable to the Company, the Property Trustee and the Depositary
for such Global Capital Security, receive individual Capital Securities in
exchange for such beneficial interests, subject to any limitations described
herein. In any such instance, an owner of a beneficial interest in a Global
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Capital Security will be entitled to physical delivery of individual Capital
Securities represented by such Global Capital Security equal in Liquidation
Amount to such beneficial interest and to have such Capital Securities
registered in its name. Individual Capital Securities so issued will be issued
in denominations, unless otherwise specified by CFB Capital, of $25 and integral
multiples thereof.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any of the Capital Securities are not held
by the Depositary, such payments shall be made by check mailed to the address of
the holder entitled thereto as such address shall appear on the Register. 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 Company. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Property Trustee and
the Company. 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
Company) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Capital Securities. Registration of transfers of the Capital Securities will be
effected without charge by or on behalf of CFB Capital, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. CFB Capital will not be required to register or cause to
be registered the transfer of the Capital Securities after such Capital
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Properly Trustee, other than upon the occurrence and during the
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in the Trust Agreement and, after such Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any holder of
Capital Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no Event of Default
has occurred and is continuing and the Property Trustee is required to decide
between alternative causes 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
are entitled under the Trust Agreement to vote, then the Property Trustee shall
take such action as is directed by the Company 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 CFB Capital in such a way that CFB Capital will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association 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 Company for
United States federal income tax purposes. In this connection, the Company and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of CFB Capital or the Trust
Agreement, that the Company 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
related Capital Securities. Holders of the Capital Securities have no preemptive
or similar rights.
CFB Capital may not borrow money or issue debt or mortgage or pledge any of
its assets.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures will be issued under the Subordinated
Indenture, dated as of February , 1997 (the "Indenture"), between the Company
and Wilmington Trust Company, as trustee (the "Indenture Trustee"). The
following summary of the terms and provisions of the Junior Subordinated
Debentures and the Indenture does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the Indenture, which has been
filed as an exhibit to the Registration Statement of which this Prospectus forms
a part, and to the Trust Indenture Act. The Indenture is qualified under the
Trust Indenture Act. Whenever particular defined terms of the Indenture are
referred to herein, such defined terms are incorporated herein or therein by
reference.
Concurrently with the issuance of the Capital Securities, CFB Capital will
invest the proceeds thereof, together with the consideration paid by the Company
for the Common Securities, in Junior Subordinated Debentures issued by the
Company. The Junior Subordinated Debentures will be issued as unsecured debt
under the Indenture.
GENERAL
The Junior Subordinated Debentures will bear interest at the annual rate of
% of the principal amount thereof, payable quarterly in arrears on the 15th
day of April, July, October and January of each year (each, an "Interest Payment
Date"), commencing April 15, 1997, to the person in whose name each Subordinated
Debenture is registered, subject to certain exceptions, at the close of business
on the Business Day next preceding such Interest Payment Date. Notwithstanding
the above, in the event that either the (i) Junior Subordinated Debentures are
held by the Property Trustee and the Capital Securities are no longer in
book-entry only form or (ii) the Junior Subordinated Debentures are not
represented by a Global Subordinated Debenture (as defined herein), the record
date for such payment shall be the 1st day of the month in which such payment is
made. The amount of each interest payment due with respect to the Junior
Subordinated Debentures will include amounts accrued through the date the
interest payment is due. It is anticipated that, until the liquidation, if any,
of CFB Capital, each Junior Subordinated Debenture will be held in the name of
the Property Trustee in trust for the benefit of the holders of the Capital
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. 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 Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date such
payment was originally payable. Accrued interest that is not paid on the
applicable Interest Payment Date will bear additional interest on the amount
thereof (to the extent permitted by law) at the rate per annum of % thereof,
compounded quarterly. The term "interest" as used herein shall include quarterly
interest payments, interest on quarterly interest payments not paid on the
applicable Interest Payment Date and Additional Sums (as defined below), as
applicable.
The Junior Subordinated Debentures will mature on February , 2027 (such
date, as it may be shortened as hereinafter described, the "Stated Maturity").
Such date may be shortened once at any time by the Company to any date not
earlier than February , 2002, subject to the Company having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. In the event that the Company
elects to shorten the Stated Maturity of the Junior Subordinated Debentures, it
shall give notice to the Indenture Trustee, and the Indenture Trustee shall give
notice of such shortening or extension to the holders of the Junior Subordinated
Debentures no less than 90 days prior to the effectiveness thereof.
The Junior Subordinated Debentures will be unsecured and will rank junior
and be subordinate in right of payment to all Senior and Subordinated Debt of
the Company. Because the Company is a holding company, the right of the Company
to participate in any distribution of assets of any subsidiaries, including
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the Company's Banks, upon any such subsidiaries' 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 Company may itself
be recognized as a creditor of that subsidiary. Accordingly, the Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Company's subsidiaries, and holders of Junior
Subordinated Debentures should look only to the assets of the Company for
payments on the Junior Subordinated Debentures. The Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Company,
including Senior and Subordinated Debt, whether under the Indenture or any
existing or other indenture that the Company may enter into in the future or
otherwise. See "Subordination" below.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is continuing, the
Company has the right under the Indenture at any time during the term of the
Junior Subordinated Debentures to defer the payment of interest at any time or
from time to time for a period not exceeding 20 consecutive quarters (each such
period an "Extension Period"), provided that no Extension Period may extend
beyond the Stated Maturity. At the end of such Extension Period, the Company
must pay all interest then accrued and unpaid (together with interest thereon at
the annual rate of %, compounded quarterly, to the extent permitted by
applicable law). During an Extension Period, interest will continue to accrue
and holders of Junior Subordinated Debentures will be required to accrue
interest income for United States federal income tax purposes. See "Certain
Federal Income Tax Consequences -- Potential Extension of Interest Payment
Period and Original Issue Discount."
During any such Extension Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including other Junior
Subordinated Debentures) that rank PARI PASSU with or junior in interest to the
Junior Subordinated Debentures or 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 with or junior in interest to the
Junior Subordinated Debentures (other than (a) dividends or distributions in
common stock of the Company, (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, and (d) purchases of
common stock related to rights under any of the Company's benefit plans for its
directors, officers or employees). Prior to the termination of any such
Extension Period, the Company may further extend such Extension Period, provided
that such extension does not cause such Extension Period to exceed 20
consecutive quarters or extend beyond the Stated Maturity. Upon the termination
of any such Extension Period and the payment of all amounts then due on any
Interest Payment Date, the Company 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 Company must give the
Property Trustee, the Administrative Trustees and the Indenture Trustee notice
of its election of any Extension Period at least one Business Day prior to the
earlier of (i) the date the Distributions on the Capital Securities would have
been payable except for the election to begin or extend such Extension Period or
(ii) the date the Administrative Trustees are required to give notice to the
holders of the Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date. The Indenture Trustee shall give notice of the Company's
election to begin or extend a new Extension Period the holders of the Capital
Securities. There is no limitation on the number of times that the Company may
elect to begin an Extension Period.
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ADDITIONAL SUMS
If CFB Capital is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Junior Subordinated Debentures such amounts
("Additional Sums") as shall be required so that the Distributions payable by
CFB Capital shall not be reduced as a result of any such additional taxes,
duties or other governmental charges.
REDEMPTION
Subject to the Company having received prior approval of the Federal
Reserve, if then required under applicable capital guidelines or policies of the
Federal Reserve, the Junior Subordinated Debentures are redeemable prior to
maturity at the option of the Company (i) on or after February __, 2002, in
whole at any time or in part from time to time, or (ii) at any time in whole
(but not in part), upon the occurrence and during the continuance of a Tax Event
or an Investment Company Event, in each case at a redemption price equal to the
accrued and unpaid interest on the Junior Subordinated Debentures so redeemed to
the date fixed for redemption, plus 100% of the principal amount thereof.
Notice of any redemption 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 redeemed at such holder's registered address. Unless the
Company defaults in payment of the redemption price, on and after the redemption
date interest ceases to accrue on such Junior Subordinated Debentures or
portions thereof called for redemption.
The Junior Subordinated Debentures will not be subject to any sinking fund.
DISTRIBUTION UPON LIQUIDATION
As described under "Description of the Capital Securities -- Liquidation
Distribution Upon Termination," under certain circumstances involving the
termination of CFB Capital, the Junior Subordinated Debentures may be
distributed to the holders of the Capital Securities in liquidation of CFB
Capital after satisfaction of liabilities to creditors of CFB Capital as
provided by applicable law. If distributed to holders of the Capital Securities
in liquidation, the Junior Subordinated Debentures will initially be issued in
the form of one or more global securities and the Depositary, or any successor
depositary for the Capital Securities, will act as depositary for the Junior
Subordinated Debentures. It is anticipated that the depositary arrangements for
the Junior Subordinated Debentures would be substantially identical to those in
effect for the Capital Securities. If the Junior Subordinated Debentures are
distributed to the holders of Capital Securities upon the liquidation of CFB
Capital, there can be no assurance as to the market price of any Junior
Subordinated Debentures that may be distributed to the holders of Capital
Securities.
RESTRICTIONS ON CERTAIN PAYMENTS
If at any time (i) there shall have occurred any event of which the Company
has actual knowledge that (a) with the giving of notice or the lapse of time, or
both, would constitute a Debenture Event of Default and (b) in respect of which
the Company shall not have taken reasonable steps to cure, or (ii) the Company
shall have given notice of its election of an Extension Period as provided in
the Indenture with respect to the Junior Subordinated Debentures and shall not
have rescinded such notice, or such Extension Period, or any extension thereof,
shall be continuing, or (iii) while the Junior Subordinated Debentures are held
by CFB Capital, the Company shall be in default with respect to its payment of
any obligation under the Guarantee, then the Company will not (1) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (2)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including other Junior
Subordinated Debt) that rank pari passu with or junior in interest to the Junior
Subordinated Debentures or 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 interest to the Junior
Subordinated Debentures (other than (a) dividends or distributions in Common
Stock, (b) any declaration of a dividend in connection with the implementation
of a stockholders' rights plan,
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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
and (d) purchases of Common Stock related to rights under any of the Company's
benefit plans for its directors, officers or employees).
SUBORDINATION
In the Indenture, the Company has covenanted and agreed that any Junior
Subordinated Debentures issued thereunder will be subordinate and junior in
right of payment to all Senior and Subordinated Debt 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 Company, the holders of Senior and Subordinated
Debt will first be entitled to receive payment in full of principal of (and
premium, if any) and interest, if any, on such Senior and Subordinated Debt
before the holders of Junior Subordinated Debentures will be entitled to receive
or retain any payment in respect of the principal of or interest, if any, on the
Junior Subordinated Debentures.
In the event of the acceleration of the maturity of any Junior Subordinated
Debentures, the holders of all Senior and Subordinated Debt outstanding at the
time of such acceleration will first be entitled to receive payment in full of
all amounts due thereon (including any amounts due upon acceleration) before the
holders of Junior Subordinated Debentures will be entitled to receive or retain
any payment in respect of the principal of or interest, if any, on the Junior
Subordinated Debentures; provided, however, that holders of Subordinated Debt
shall not be entitled to receive payment of any such amounts to the extent that
such Subordinated Debt is by its terms subordinated to trade creditors.
No payments on account of principal 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 and Subordinated Debt
or an event of default with respect to any Senior and Subordinated Debt
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
"Debt" means with respect to any person, whether recourse is to all or a
portion of the assets of such person and whether or not contingent: (i) every
obligation of such person for money borrowed; (ii) every obligation of such
person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such person; (iv) every obligation of such person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another person
and all dividends of another person the payment of which, in either case, such
person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Senior and Subordinated Debt" means the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Junior Subordinated Debentures or to other
Debt which is pari passu with, or subordinated to, the Junior Subordinated
Debentures; provided, however, that Senior Debt shall not be deemed to include
(i) any Debt of the Company which when incurred and without respect to any
election under section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Company, (ii) any Debt of the Company to
any of its subsidiaries, (iii) any Debt to any employee of the Company, (iv) any
Debt which by its terms is subordinated to trade accounts payable or accrued
liabilities arising in the ordinary course of business to the extent that
payments made to the
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holders of such Debt by the holders of the Junior Subordinated Debentures as a
result of the subordination provisions of the Indenture would be greater than
they otherwise would have been as a result of any obligation of such holders to
pay amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject, (v) the Guarantee, and
(vi) any other debt securities issued pursuant to the Indenture.
The Indenture places no limitation on the amount of additional Senior and
Subordinated Debt that may be incurred by the Company. The Company expects from
time to time to incur additional indebtedness constituting Senior and
Subordinated Debt.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Junior Subordinated Debentures will be represented by global
certificates registered in the name of the Depositary or its nominee ("Global
Subordinated Debenture"). Beneficial interests in the Junior Subordinated
Debentures will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary. Except as described below, Junior
Subordinated Debentures in certificated form will not be issued in exchange for
the global certificates. See "Book-Entry Issuance."
Unless and until a Global Subordinated Debenture is exchanged in whole or in
part for the individual Junior Subordinated Debentures represented thereby, it
may not be transferred except as a whole by the Depositary for such Global
Subordinated Debenture to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
A global security shall be exchangeable for Junior Subordinated Debentures
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such global security and no successor depositary
shall have been appointed, or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Company in its sole discretion determines that such
global security shall be so exchangeable or (iii) there shall have occurred and
be continuing an Event of Default under the Indenture with respect to such
global security. Any global security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for definitive certificates registered
in such names as the Depositary shall direct. It is expected that such
instructions will be based upon directions received by the Depositary from its
Participants with respect to ownership of beneficial interests in such global
security. In the event that Junior Subordinated Debentures are issued in
definitive form, such Junior Subordinated Debentures will be in denominations of
$25 and integral multiples thereof and may be transferred or exchanged at the
offices described below.
Payments on Junior Subordinated Debentures represented by a global security
will be made to the Depositary, as the depositary for the Junior Subordinated
Debentures. In the event Junior Subordinated Debentures are issued in definitive
form, principal and interest will be payable, the transfer of the Junior
Subordinated Debentures will be registrable, and Junior Subordinated Debentures
will be exchangeable for Junior Subordinated Debentures of other denominations
of a like aggregate principal amount, at the corporate office of the Indenture
Trustee, or at the offices of any paying agent or transfer agent appointed by
the Company, provided that payment of interest may be made at the option of the
Company by check mailed to the address of the persons entitled thereto or by
wire transfer. In addition, if the Junior Subordinated Debentures are issued in
certificated form, the record dates for payment of interest will be the 1st day
of the month in which such payment is to be made. For a description of the
Depositary and the terms of the depositary arrangements relating to payments,
transfers, voting rights, redemptions and other notices and other matters, see
"Book-Entry Issuance."
The Company will appoint the Indenture Trustee as securities registrar under
the Indenture (the "Securities Registrar"). Junior Subordinated Debentures may
be presented for exchange as provided above, and may be presented for
registration of transfer (with the form of transfer endorsed thereon, or a
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satisfactory written instrument of transfer, duly executed), at the office of
the Securities Registrar. The Company may at any time rescind the designation of
any such transfer agent or approve a change in the location through which any
such transfer agent acts, provided that the Company maintains a transfer agent
in the place of payment. The Company may at any time designate additional
transfer agents with respect to the Junior Subordinated Debentures.
In the event of any redemption, neither the Company nor the Indenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Junior Subordinated Debentures during a period beginning at the opening of
business 15 days before the day of selection for redemption of Junior
Subordinated Debentures and ending at the close of business on the day of
mailing of the relevant notice of redemption or (ii) transfer or exchange any
Junior Subordinated Debentures so selected for redemption, except, in the case
of any Junior Subordinated Debentures being redeemed in part, any portion
thereof not to be redeemed.
GLOBAL JUNIOR SUBORDINATED DEBENTURES
Upon the issuance of the Global Subordinated Debenture, and the deposit of
such Global Subordinated Debenture with or on behalf of the Depositary, the
Depositary for such Global Subordinated Debenture or its nominee will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the individual Junior Subordinated Debentures represented by such
Global Subordinated Debenture to the accounts of persons that have accounts with
such Depositary ("Participants"). Ownership of beneficial interests in a Global
Subordinated Debenture will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests in such Global
Subordinated Debenture will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Subordinated Debenture.
So long as the Depositary for a Global Subordinated Debenture, or its
nominee, is the registered owner of such Global Subordinated Debenture, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Junior Subordinated Debentures represented by such Global
Subordinated Debenture for all purposes under the Indenture governing such
Junior Subordinated Debentures. Except as provided below, owners of beneficial
interests in a Global Subordinated Debenture will not be entitled to have any of
the individual Junior Subordinated Debentures represented by such Global
Subordinated Debenture registered in their names, will not receive or be
entitled to receive physical delivery of any such Junior Subordinated Debentures
in definitive form and will not be considered the owners or holders thereof
under the Indenture.
Payments of principal of and interest on individual Junior Subordinated
Debentures represented by a Global Subordinated Debenture registered in the name
of the Depositary or its nominee will be made to the Depositary or its nominee,
as the case may be, as the registered owner of the Global Subordinated Debenture
representing such Junior Subordinated Debentures. None of the Company, the
Indenture Trustee, any Paying Agent, or the Securities Registrar for such Junior
Subordinated Debentures will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of the Global Subordinated Debenture representing such Junior
Subordinated Debentures or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal or interest in respect of a permanent Global Subordinated
Debenture representing the Junior Subordinated Debentures, immediately will
credit Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the principal amount of the Global
Subordinated Debenture as shown on the records of such Depositary or its
nominee. The Company also expects that payments by Participants to owners of
beneficial interests in such Global Subordinated Debenture held through such
Participants will be
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governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name." Such payments will be the responsibility of such Participants.
If the Depositary is at any time unwilling, unable or ineligible to continue
as depositary and a successor depositary is not appointed by the Company within
90 days, the Company will issue individual Junior Subordinated Debentures in
exchange for the Global Subordinated Debenture. In addition, the Company may at
any time and in its sole discretion, determine not to have the Junior
Subordinated Debentures represented by one or more Global Junior Subordinated
Debentures and, in such event, will issue individual Junior Subordinated
Debentures in exchange for the Global Subordinated Debenture. Further, if the
Company so specifies with respect to the Junior Subordinated Debentures, an
owner of a beneficial interest in a Global Subordinated Debenture representing
Junior Subordinated Debentures may, on terms acceptable to the Company, the
Indenture Trustee and the Depositary for such Global Subordinated Debenture,
receive individual Junior Subordinated Debentures in exchange for such
beneficial interests. In any such instance, an owner of a beneficial interest in
a Global Subordinated Debenture will be entitled to physical delivery of
individual Junior Subordinated Debentures equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures so issued will be issued
in denominations, unless otherwise specified by the Company, of $25 and integral
multiples thereof.
PAYMENT AND PAYING AGENTS
Payment of principal of and any interest on the Junior Subordinated
Debentures will be made at the office of the Indenture Trustee, except that at
the option of the Company payment of any interest may be made (i) except in the
case of Global Junior Subordinated Debentures, by check mailed to the address of
the person entitled thereto as such address shall appear in the securities
register or (ii) by transfer to an account maintained by the person entitled
thereto as specified in the securities register, provided that proper transfer
instructions have been received by the regular record date. Payment of any
interest on Junior Subordinated Debentures will be made to the person in whose
name such Junior Subordinated Debenture is registered at the close of business
on the regular record date for such interest. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent; however the Company 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 Indenture Trustee or any Paying Agent, or then
held by the Company in trust, for the payment of the principal of or interest on
the Junior Subordinated Debentures and remaining unclaimed for two years after
such principal or interest has become due and payable shall, at the request of
the Company, be repaid to the Company and the holder of such Junior Subordinated
Debenture shall thereafter look, as a general unsecured creditor, only to the
Company for payment thereof.
MODIFICATION OF INDENTURE
From time to time the Company and the Indenture Trustee may, without the
consent of the holders of the Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interests of the holders of the Junior
Subordinated Debentures or the Capital Securities so long as they remain
outstanding) and qualifying, or maintaining the qualification of, the Indenture
under the Trust Indenture Act. The Indenture contains provisions permitting the
Company and the Indenture Trustee, with the consent of the holders of not less
than a majority in principal amount of the outstanding Junior Subordinated
Debentures, to modify the Indenture in a manner affecting the rights of the
holders of the Junior Subordinated Debentures; provided, that no such
modification may, without the consent of the holder of each outstanding
Subordinated Debenture, (i) change the Stated Maturity of the Junior
Subordinated Debentures, or reduce the principal amount thereof, or reduce the
rate or extend the
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time of payment of interest thereon 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, provided that so long as any
of the Capital Securities remain outstanding, no such modification may be made
that adversely affects the holders of such Capital Securities in any material
respect, and no termination of the Indenture may occur, and no waiver of any
Debenture Event of Default or compliance with any covenant under the Indenture
may be effective, without the prior consent of the holders of at least a
majority of the aggregate Liquidation Amount of the Capital Securities unless
and until the principal of the Junior Subordinated Debentures and all accrued
and unpaid interest thereon have been paid in full and certain other conditions
are satisfied.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debentures that has occurred and
is continuing constitutes a "Debenture Event of Default" with respect to the
Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on the Junior Subordinated
Debentures, when due (subject to the deferral of any due date in the case of
an Extension Period); or
(ii) failure to pay any principal on the Junior Subordinated Debentures
when due whether at maturity, upon redemption by declaration or otherwise;
or
(iii) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 90 days after written notice to the
Company from the Indenture Trustee or to the Company and the Indenture
Trustee by the holders of at least 25% in aggregate outstanding principal
amount of the Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee. The Indenture 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 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 Indenture Trustee.
Should the holders of the Junior Subordinated Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount of the Capital Securities shall have such right.
In case a Debenture Event of Default shall occur and be continuing as to the
Junior Subordinated Debentures, the Property Trustee will have the right to
declare the principal of and the interest on such Junior Subordinated
Debentures, and any other amounts payable under the Indenture, to be forthwith
due and payable and to enforce its other rights as a creditor with respect to
such Junior Subordinated Debentures.
The Company is required to file annually with the Indenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or principal
on the Junior Subordinated Debentures on the date such interest or principal is
otherwise payable, a holder of Capital Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on
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such Junior Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Capital Securities of such holder ("Direct
Action"). If the right to bring a Direct Action is removed, CFB Capital may
become subject to the reporting obligations under the Exchange Act. The Company
shall have the right under the Indenture to set-off any payment made to such
holder of Capital Securities by the Company in connection with a Direct Action.
The holders of the Capital Securities would 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 Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless (i) in case the Company
consolidates with or merges into another Person or conveys or transfers its
properties and assets substantially as an entirety to any Person, the successor
Person is organized under the laws of the United States or any state or the
District of Columbia, and such successor Person expressly assumes the Company's
obligations on the Junior Subordinated Debentures issued under the Indenture;
(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 Company that may adversely affect holders of the
Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Indenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at their Stated Maturity within one year, and the Company deposits or causes to
be deposited with the Indenture Trustee trust funds, in trust, for the purpose
and in an amount in the currency or currencies in which the Junior Subordinated
Debentures are payable sufficient to pay and discharge the entire indebtedness
on the Junior Subordinated Debentures not previously delivered to the Indenture
Trustee for cancellation, for the principal and interest to the date of the
deposit or to the Stated Maturity, as the case may be, then the Indenture will
cease to be of further effect (except as to the Company's obligations to pay all
other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Company will be
deemed to have satisfied and discharged the Indenture.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of Minnesota.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Indenture 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 Indenture 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 Indenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
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COVENANTS OF THE COMPANY
The Company will covenant in the Indenture, as to the Junior Subordinated
Debentures, that if and so long as (i) CFB Capital is the holder of all such
Junior Subordinated Debentures, (ii) a Tax Event in respect of CFB Capital has
occurred and is continuing and (iii) the Company has elected, and has not
revoked such election, to pay Additional Sums (as defined under "Description of
the Capital Securities -- Redemption") in respect of the Capital Securities, the
Company will pay to CFB Capital such Additional Sums. The Company will also
covenant, as to the Junior Subordinated Debentures, (i) to maintain directly or
indirectly 100% ownership of the Common Securities of CFB Capital to which
Junior Subordinated Debentures have been issued, provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Company's ownership of the Common Securities, (ii) not to voluntarily terminate,
wind up or liquidate CFB Capital, except upon prior approval of the Federal
Reserve if then so required under applicable capital guidelines or policies of
the Federal Reserve, and except (a) in connection with a distribution of Junior
Subordinated Debentures to the holders of the Capital Securities in liquidation
of CFB Capital or (b) in connection with certain mergers, consolidations, or
amalgamations permitted by the Trust Agreement and (iii) to use its reasonable
efforts, consistent with the terms and provisions of the Trust Agreement, to
cause CFB Capital to remain classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes.
BOOK-ENTRY ISSUANCE
The Depositary will act as securities depositary for all of the Capital
Securities and the Junior Subordinated Debentures. The Capital Securities and
the Junior Subordinated Debentures will be issued only as fully-registered
securities registered in the name of Cede & Co. (the Depositary's nominee). One
or more fully-registered global certificates will be issued for the Capital
Securities and the Junior Subordinated Debentures and will be deposited with the
Depositary.
The Depositary is a limited purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary holds securities that its Participants deposit with the
Depositary. The Depositary also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
"Direct Participants" include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. The Depositary
is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the Depositary system is also available to
others such as securities brokers and dealers, banks and trust companies that
clear through or maintain custodial relationships with Direct Participants,
either directly or indirectly ("Indirect Participants"). The rules applicable to
the Depositary and its Participants are on file with the Commission.
Purchases of Capital Securities or Junior Subordinated Debentures within the
Depositary system must be made by or through Direct Participants, which will
receive a credit for the Capital Securities or Junior Subordinated Debentures on
the Depositary's records. The ownership interest of each actual purchaser of
each Capital Securities and each Subordinated Debenture ("Beneficial Owner") is
in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from the Depositary of
their purchases, but Beneficial Owners are expected to receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Capital Securities or Junior Subordinated
Debentures. Transfers of ownership interests in the Capital Securities or Junior
Subordinated Debentures are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial
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Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Capital Securities or Junior Subordinated Debentures,
except in the event that use of the book-entry system for the or Junior
Subordinated Debentures is discontinued.
The Depositary has no knowledge of the actual Beneficial Owners of the
Capital Securities or Junior Subordinated Debentures; the Depositary's records
reflect only the identity of the Direct Participants to whose accounts such
Capital Securities or Junior Subordinated Debentures are credited, which may or
may not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the Capital Securities or Junior Subordinated Debentures. If less than all of
the Capital Securities or the Junior Subordinated Debentures are being redeemed,
the Depositary will determine by lot or pro rata the amount of the Capital
Securities of each Direct Participant to be redeemed.
Although voting with respect to the Capital Securities or the Junior
Subordinated Debentures is limited to the holders of record of the Capital
Securities Junior Subordinated Debentures, in those instances in which a vote is
required, neither the Depositary nor Cede & Co. will itself consent or vote with
respect to Capital Securities or Junior Subordinated Debentures. Under its usual
procedures, the Depositary would mail an omnibus proxy (the "Omnibus Proxy") to
the relevant Trustee as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts such Capital Securities or Junior Subordinated
Debentures are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Distribution payments on the Capital Securities or the Junior Subordinated
Debentures will be made by the relevant Trustee to the Depositary. The
Depositary's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participant and not of the
Depositary, the relevant Trustee, CFB Capital or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of Distributions to the Depositary is the responsibility of the relevant
Trustee, disbursement of such payments to Direct Participants is the
responsibility of the Depositary, and disbursements of such payments to the
Beneficial Owners is the responsibility of Direct and Indirect Participants.
The Depositary may discontinue providing its services as securities
depositary with respect to any of the Capital Securities or the Junior
Subordinated Debentures at any time by giving reasonable notice to the relevant
Trustee and the Company. In the event that a successor securities depositary is
not obtained, definitive Capital Securities or Subordinated Debenture
certificates representing such Capital Securities or Junior Subordinated
Debentures are required to be printed and delivered. The Company, at its option,
may decide to discontinue use of the system of book-entry transfers through the
Depositary (or a successor depositary). After a Debenture Event of Default, the
holders of a majority in liquidation preference of Capital Securities or
aggregate principal amount of Junior Subordinated Debentures may determine to
discontinue the system of book-entry transfers through the Depositary. In any
such event, definitive certificates for such Capital Securities or Junior
Subordinated Debentures will be printed and delivered.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that CFB Capital
and the Company believe to be accurate, but CFB Capital and
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the Company assume no responsibility for the accuracy thereof. Neither CFB
Capital nor the Company has any responsibility for the performance by the
Depositary or its Participants of their respective obligations as described
herein or under the rules and procedures governing their respective operations.
DESCRIPTION OF GUARANTEE
The Capital Securities Guarantee Agreement (the "Guarantee") will be
executed and delivered by the Company concurrently with the issuance of the
Capital Securities for the benefit of the holders of the Capital Securities.
Wilmington Trust Company will act as indenture trustee ("Guarantee Trustee")
under the Guarantee for the purposes of compliance with the Trust Indenture Act,
and the Guarantee will be qualified as an Indenture under the Trust Indenture
Act. The following summary of certain provisions of the Guarantee 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 form of
the Guarantee has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the Capital Securities.
GENERAL
The Guarantee will be an irrevocable guarantee on a subordinated basis of
CFB Capital's obligations under the Capital Securities, but will apply only to
the extent that CFB Capital has funds sufficient to make such payments, and is
not a guarantee of collection.
The Company will irrevocably agree to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Capital Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that CFB Capital 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 CFB Capital (the
"Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated and
unpaid Distributions required to be paid on the Capital Securities, to the
extent that CFB Capital has funds on hand available therefor at such time, (ii)
the Redemption Price with respect to any Capital Securities called for
redemption to the extent that CFB Capital has funds on hand available therefor
at such time, and (iii) upon a voluntary or involuntary dissolution, winding up
or liquidation of CFB Capital (unless the Junior Subordinated Debentures are
distributed to holders of the Capital Securities), the lesser of (a) the
Liquidation Distribution and (b) the amount of assets of CFB Capital remaining
available for distribution to holders of Capital Securities. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Company to the holders of the Capital Securities or by
causing CFB Capital to pay such amounts to such holders.
If the Company does not make interest payments on the Junior Subordinated
Debentures held by CFB Capital, CFB Capital will not be able to pay
Distributions on the Capital Securities and will not have funds legally
available therefor. The Guarantee will rank subordinate and junior in right of
payment to all Senior and Subordinated Debt of the Company. See "Status of the
Guarantee" below. Because the Company is a holding company, the right of the
Company 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 Company may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Company's obligations under the Guarantee will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and claimants
should look only to the assets of the Company for payments thereunder. Except as
otherwise described herein, the Guarantee does not limit the incurrence or
issuance of other secured or unsecured debt of the Company, including Senior and
Subordinated Debt whether under the Indenture, any other indenture that the
Company may enter into in the future, or otherwise.
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The Company has, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of CFB Capital'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 CFB
Capital's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debentures and the Guarantee."
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior and
Subordinated Debt in the same manner as the Junior Subordinated Debentures.
The Guarantee will constitute a guarantee of payment and not of collection.
For example, the guaranteed party may institute a legal proceeding directly
against the Company 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 CFB Capital or upon distribution to the holders
of the Capital Securities of the Junior Subordinated Debentures to the holders
of the Capital Securities. The Guarantee does not place a limitation on the
amount of additional Senior and Subordinated Debt that may be incurred by the
Company. The Company expects from time to time to incur additional indebtedness
constituting Senior and Subordinated Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of such
outstanding Capital Securities. See "Description of the Capital Securities --
Voting Rights; Amendment of Trust Agreement." All guarantees and agreements
contained in the Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against CFB Capital, the Guarantee Trustee
or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
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,
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<PAGE>
the Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Guarantee at the request of any holder of the Capital
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the Redemption Price of the Capital Securities, upon full payment of
the amounts payable upon liquidation of CFB Capital or upon distribution of
Junior Subordinated Debentures to the holders of the Capital Securities. The
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the Capital Securities must restore payment of
any sums paid under the Capital Securities or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of Minnesota.
THE EXPENSE AGREEMENT
Pursuant to the Agreement as to Expenses and Liabilities entered into by the
Company under the Trust Agreement (the "Expense Agreement"), the Company will
irrevocably and unconditionally guarantee to each person or entity to whom CFB
Capital becomes indebted or liable, the full payment of any costs, expenses or
liabilities of CFB Capital, other than obligations of CFB Capital to pay to the
holders of the Capital Securities or other similar interests in CFB Capital of
the amounts due such holders pursuant to the terms of the Capital Securities or
such other similar interests, as the case may be.
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 CFB Capital has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of Guarantee." Taken together, the Company's
obligations under the Junior Subordinated Debentures, the Indenture, the Trust
Agreement, the Expense 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 those documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of CFB Capital's obligations under the Capital Securities. If and to the extent
that the Company does not make payments on the Junior Subordinated Debentures,
CFB Capital will not pay Distributions or other amounts due on the Capital
Securities. The Guarantee does not cover payment of Distributions when CFB
Capital does not have sufficient funds to pay such Distributions. In such event,
the remedy of a holder of the Capital Securities is to institute a legal
proceeding directly against the Company for enforcement of payment of such
Distributions to such holder. The obligations of the Company under the Guarantee
are subordinate and junior in right of payment to all Senior and Subordinated
Debt.
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 of the Junior Subordinated
Debentures will be equal to the sum of the aggregate Liquidation Amount of the
Capital Securities and Common Securities; (ii) the interest rate and interest
and other payment dates on the Junior Subordinated Debentures will match the
Distribution rate and Distribution and other payment dates for the Capital
Securities; (iii) the Company
50
<PAGE>
shall pay for all and any costs, expenses and liabilities of CFB Capital except
CFB Capital's obligations to holders of Capital Securities; and (iv) the Trust
Agreement further provides that CFB Capital will not engage in any activity that
is not consistent with the limited purposes of CFB Capital.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF THE CAPITAL SECURITIES UNDER THE GUARANTEE
A holder of any the Capital Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, CFB Capital
or any other person or entity,
A default or event of default under any Senior and Subordinated Debt would
not constitute a default or Event of Default. However, in the event of payment
defaults under, or acceleration of, Senior and Subordinated Debt, the
subordination provisions of the Indenture provide that no payments may be made
in respect of the Junior Subordinated Debentures until such Senior and
Subordinated Debt 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.
LIMITED PURPOSE OF CFB CAPITAL
The Capital Securities evidence a beneficial interest in CFB Capital, and
CFB Capital exists for the sole purpose of issuing the Trust Securities and
investing the proceeds thereof in Junior Subordinated Debentures. A principal
difference between the rights of a holder of the Capital Securities and a holder
of a Subordinated Debenture is that a holder of a Subordinated Debenture is
entitled to receive from the Company the principal amount of and interest
accrued on Junior Subordinated Debentures held, while a holder of the Capital
Securities is entitled to receive Distributions from CFB Capital (or from the
Company under the Guarantee) if and to the extent CFB Capital has funds
available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
CFB Capital involving the liquidation of the Junior Subordinated Debentures, the
holders of Capital Securities will be entitled to receive, out of assets held by
CFB Capital, the Liquidation Distribution in cash. See "Description of the
Capital Securities -- Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the Property
Trustee, as holder of the Junior Subordinated Debentures, would be a
subordinated creditor of the Company, subordinated in right of payment to all
Senior and Subordinated Debt as set forth in the Indenture, but entitled to
receive payment in full of principal and interest, before any stockholders of
the Company receive payments or distributions. Since the Company is the
guarantor under the Guarantee and has agreed to pay for all costs, expenses and
liabilities of CFB Capital (other than CFB Capital's obligations to the holders
of its Capital Securities), the positions of a holder of the Capital Securities
and a holder of Junior Subordinated Debentures relative to other creditors and
to stockholders of the Company in the event of liquidation or bankruptcy of the
Company are expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Lindquist & Vennum P.L.L.P., counsel to the Company
("Counsel"), the following summary accurately describes the material United
States federal income tax consequences that may be relevant to the purchase,
ownership and disposition of Capital Securities. Unless otherwise stated, this
summary deals only with Capital Securities held as capital assets by United
States Persons (defined below) who purchase the Capital Securities upon original
issuance at their original offering price. As used herein, a
51
<PAGE>
"United States Person" means a person that is (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, (iii) an estate the income of which is subject to United States federal
income taxation regardless of its source, or (iv) a trust the income of which is
subject to United States federal income taxation regardless of its source;
provided, however, that for taxable years beginning after December 31, 1996 (or,
if a trustee so elects, for taxable years ending after August 20, 1996), a
"United States Person" shall include any trust if a court is able to exercise
primary supervision over the administration of such trust and one or more United
States fiduciaries have the authority to control all substantial decisions of
such trust. The tax treatment of holders may vary depending on their particular
situation. This summary does not address all the tax consequences that may be
relevant to a particular holder or to holders who may be subject to special tax
treatment, such as banks, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors, or foreign investors. In addition, this summary does not include any
description of any alternative minimum tax consequences or the tax laws of any
state, local or foreign government that may be applicable to a holder of Capital
Securities. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury regulations promulgated thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change, possibly on a retroactive basis.
The following discussion does not discuss the tax consequences that might be
relevant to persons that are not United States Persons ("non-United States
Persons") . Non-United States Persons should consult their own tax advisors as
to the specific United States federal income tax consequences of the purchase,
ownership and disposition of Capital Securities.
The authorities on which this summary is based are subject to various
interpretations and the opinions of Counsel are not binding on the Internal
Revenue Service ("Service") or the courts, either of which could take a contrary
position. Moreover, no rulings have been or will be sought from the Service with
respect to the transactions described herein. Accordingly, there can be no
assurance that the Service will not challenge the opinions expressed herein or
that a court would not sustain such a challenge. Nevertheless, Counsel has
advised that it is of the view that, if challenged, the opinions expressed
herein would be sustained by a court with jurisdiction in a properly presented
case.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, 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. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE CAPITAL
SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS, SEE "DESCRIPTION OF
CAPITAL SECURITIES -- REDEMPTION."
CLASSIFICATION OF CFB CAPITAL
In connection with the issuance of the Capital Securities, Counsel is of the
opinion that, under current law and assuming compliance with the terms of the
Trust Agreement, and based on certain facts and assumptions contained in such
opinion, CFB Capital will be classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes. As a result, each beneficial owner of the Capital Securities (a
"Securityholder") will be treated as owning an undivided beneficial interest in
the Junior Subordinated Debentures. Accordingly, each Securityholder will be
required to include in its gross income its pro rata share of the interest
income or original issue discount that is paid or accrued on the Junior
Subordinated Debentures. See "-- Interest Income and Original Issue Discount."
No amount included in income with respect to the Capital Securities will be
eligible for the dividends received deduction.
52
<PAGE>
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
The Company intends to take the position that the Junior Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Company under current law, and, by acceptance of a Capital
Security, each holder covenants to treat the Junior Subordinated Debentures as
indebtedness and the Capital Securities as evidence of an indirect beneficial
ownership interest in the Junior Subordinated Debentures. No assurance can be
given, however, that such position of the Company will not be challenged by the
Internal Revenue Service or, if challenged, that such a challenge will not be
successful. The remainder of this discussion assumes that the Junior
Subordinated Debentures will be classified for United States federal income tax
purposes as indebtedness of the Company.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Except as set forth below, stated interest on the Junior Subordinated
Debentures generally will be included in income by a Securityholder at the time
such interest income is paid or accrued in accordance with such Securityholder's
regular method of tax accounting.
The Company believes that, under the applicable Treasury regulations, the
Junior Subordinated Debentures will not be considered to have been issued with
"original issue discount" ("OID") within the meaning of Section 1273(a) of the
Code. If, however, the Company exercises its right to defer Payments of interest
on the Junior Subordinated Debentures, the Junior Subordinated Debentures will
become OID instruments at such time and all Securityholders will be required to
accrue the stated interest on the Junior Subordinated Debentures on a daily
basis during the Extension Period, even though the Company will not pay such
interest until the end of the Extension Period, and even though some
Securityholders may use the cash method of tax accounting. Moreover, thereafter
the Junior subordinated Debentures will be taxed as OID instruments for as long
as they remain outstanding. Thus, even after the end of the Extension Period,
all Securityholders would be required to continue to include the stated interest
on the Junior Subordinated Debentures in income on a daily economic accrual
basis, regardless of their method of tax accounting and in advance of receipt of
the cash attributable to such interest income. Under the OID economic accrual
rules, a Securityholder would accrue an amount of interest income each year that
approximates the stated interest payments called for under the Junior
Subordinated Debentures, and actual cash payments of interest on the Junior
Subordinated Debentures would not be reported separately as taxable income.
The Treasury regulations described above have not yet been addressed in any
rulings or other interpretations by the Service, and it is possible that the
Service could take a contrary position. If the Service were to assert
successfully that the stated interest on the Junior Subordinated Debentures was
OID regardless of whether the Corporation exercises its right to defer payments
of interest on such debentures, all Securityholders would be required to include
such stated interest in income on a daily economic accrual basis as described
above.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL SECURITIES
Under current law, a distribution by CFB Capital of the Junior Subordinated
Debentures as described under the caption "Description of Capital Securities --
Liquidation and Distribution Upon Termination" will be non-taxable and will
result in the Securityholder receiving directly its pro rata share of the Junior
Subordinated Debentures previously held indirectly through CFB Capital, with a
holding period and aggregate tax basis equal to the holding period and aggregate
tax basis such Securityholder had in its Capital Securities before such
distribution. If, however, the liquidation of CFB Capital were to occur because
CFB Capital is subject to United States federal income tax with respect to
income accrued or received on the Junior Subordinated Debentures as a result of
a Tax Event or otherwise, the distribution of Junior Subordinated Debentures to
Securityholders by CFB Capital could be a taxable event to CFB Capital and each
Securityholder, and a Securityholder would recognize gain or loss as if the
Securityholder had exchanged its Capital Securities for the Junior Subordinated
Debentures it received upon the liquidation of CFB Capital. A Securityholder
would recognize interest income in respect of Junior Subordinated Debentures
received from CFB Capital in the manner described above under "-- Interest
Income and Original Issue Discount."
53
<PAGE>
SALES OR REDEMPTION OF CAPITAL SECURITIES
Gain or loss will be recognized by a Securityholder on a sale of Capital
Securities (including a redemption for cash) in an amount equal to the
difference between the amount realized (which for this purpose, will exclude
amounts attributable to accrued interest or OID not previously included in
income) and the Securityholder's adjusted tax basis in the Capital Securities
sold or so redeemed. Gain or loss recognized by a Securityholder on Capital
Securities held for more than one year will generally be taxable as long-term
capital gain or loss. Amounts attributable to accrued interest with respect to a
Securityholder's pro rata share of the Junior Subordinated Debentures not
previously included in income will be taxable as ordinary income.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of OID accrued on the Capital Securities held of record by United
States Persons (other than corporations and other exempt Securityholders), if
any, will be reported to the Service. "Backup" withholding at a rate of 31% will
apply to payments of interest to non-exempt United States Persons unless the
Securityholder furnishes its taxpayer identification number in the manner
prescribed in applicable Treasury Regulations, certifies that such number is
correct, certifies as to no loss of exemption from backup withholding and meets
certain other conditions. Any amounts withheld from a Securityholder under the
backup withholding rules will be allowed as a refund or a credit against such
Securityholder's United States federal income tax liability, provided the
required information is furnished to the Service.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"), the
revenue portion of President Clinton's budget proposal, was released. The Bill
would, among other things, deny interest deductions for interest on an
instrument issued by a corporation that has a maximum term of more than 20 years
and that is not shown as indebtedness on the separate balance sheet of the
issuer or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. It is possible that this provision could be adopted with
retroactive effect, in which event the Company might be unable to deduct
interest on the Junior Subordinated Debentures. However, on March 29, 1996, the
Chairmen of the Senate Finance and House Ways and Means Committees issued a
joint statement to the effect that it was their intention that the effective
date of the President's legislative proposals, if adopted, will be no earlier
than the date of appropriate Congressional action. However, there can be no
assurance that current or future legislative proposals or final legislation will
not affect the ability of the Company to deduct interest on the Junior
Subordinated Debentures. Such a change could give rise to a Tax Event, which may
permit the Company, upon approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve, to cause a
redemption of the Capital Securities. See "Description of the Capital Securities
- -- Redemption" and "Description of Junior Subordinated Debentures --
Redemption."
54
<PAGE>
UNDERWRITING
The Underwriters named below have agreed, subject to the terms and
conditions of a Purchase Agreement to purchase from CFB Capital the respective
principal amount of the Capital Securities set forth opposite their names in the
table below.
<TABLE>
<CAPTION>
UNDERWRITER AMOUNT
- -------------------------------------------------------------------------------- ------------
<S> <C>
Piper Jaffray Inc...............................................................
Dain Bosworth Incorporated......................................................
------------
$
------------
------------
</TABLE>
The Underwriters have advised the Company and CFB Capital that they propose
to offer the Capital Securities directly to the public initially at the public
offering price set forth on the cover page of this Prospectus and to selected
dealers at such price less a concession not in excess of $ per Capital
Security. The Underwriters may allow and such dealers may reallow a concession
not in excess of $ per Capital Security to certain other brokers and
dealers. After the public offering, the public offering price, concession and
reallowance, and other selling terms may be changed by the Underwriters.
In view of the fact that the proceeds from the sale of the Capital
Securities will be used to purchase the Junior Subordinated Debentures issued by
the Company, the Purchase Agreement provides that the Company will pay as
compensation for the Underwriters' arranging the investment therein of such
proceeds an amount of $ per Capital Security.
Each of the Company and CFB Capital has agreed to indemnify the Underwriters
and their controlling persons against certain liabilities, including liabilities
under the Securities Act of 1933, as amended, or to contribute to payments the
Underwriters may be required to make in respect thereof.
The Underwriters have advised CFB that it does not intend to confirm sales
to any account over which it exercises discretionary authority in excess of 5%
of the number of Capital Securities offered hereby.
Piper Jaffray Inc. and Dain Bosworth Incorporated have periodically provided
investment banking services to the Company.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Capital
Securities, the enforceability of the Trust Agreement and the formation of CFB
Capital will be passed upon by Richards, Layton & Finger, P.A., Wilmington,
Delaware, special Delaware counsel to the Company and CFB Capital. The validity
of the Guarantee and the Junior Subordinated Debentures will be passed upon for
the Company by Lindquist & Vennum P.L.L.P., Minneapolis, Minnesota, counsel to
the Company. Patrick Delaney, a holder of common stock and of options to
purchase common stock and a director of the Company, is a partner in Lindquist &
Vennum. Certain legal matters in connection with this Offering will be passed
upon for the Underwriters by Faegre & Benson LLP, Minneapolis, Minnesota.
Lindquist & Vennum and Faegre & Benson LLP will rely on the opinions of
Richards, Layton & Finger as to matters of Delaware law. Certain matters
relating to United States federal income tax considerations will be passed upon
for the Company by Lindquist & Vennum.
EXPERTS
The supplemental consolidated financial statements of the Company at
December 31, 1995 and 1994 and for each of the three years in the period ended
December 31, 1995 incorporated by reference in this Prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon incorporated by reference in this Prospectus and
Registration Statement, which report (i) is based in part on the reports of
Arthur Andersen LLP, formerly independent auditors for
55
<PAGE>
Mountain Parks, on the consolidated financial statements of Mountain Parks and
Subsidiaries at December 31, 1995 and 1994 and for each of the three years in
the period ended December 31, 1995, and (ii) as to the years 1994 and 1993, is
based in part on the reports of Hacker, Nelson & Co., P.C. and Fortner, Bayens,
Levkulich and Co., P.C., formerly independent auditors for Minowa Bancshares,
Inc. and First Community Bankshares, Inc., respectively. As of the date of their
reports and during the periods covered by the financial statements on which they
reported, each of the foregoing accounting firms were independent certified
public accountants with respect to the Company, Mountain Parks, Minowa
Bancshares, Inc. and First Community Bankshares, Inc., as the case may be,
within the meaning of the Securities Act and the applicable published rules and
regulations thereunder. The Company has agreed to indemnify Hacker, Nelson &
Co., P.C., its officers, directors and employees from any and all damages,
fines, legal costs and expenses that may be incurred by the parties being
indemnified in successfully defending their audit to any person, corporation or
governmental entity relying upon the audit, provided that such indemnification
will not apply to any claim, legal expense, or costs incurred if Hacker, Nelson
& Co., P.C. has been found guilty of professional malpractice with respect to
such audit. The supplemental consolidated financial statements referred to above
are incorporated herein by reference in reliance upon such reports given upon
the authority of such firms as experts in accounting and auditing.
56
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR EITHER UNDERWRITER. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE
AN IMPLICATION THAT THE INFORMATION HEREIN OR INCORPORATED BY REFERENCE HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
-------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 4
Incorporation of Certain Documents by Reference........................... 4
Prospectus Summary........................................................ 5
Summary Supplemental Historical Consolidated Financial Data............... 10
Risk Factors.............................................................. 13
Recent Developments....................................................... 19
Use of Proceeds........................................................... 19
Accounting Treatment...................................................... 20
Capitalization............................................................ 21
Management................................................................ 22
Description of the Capital Securities..................................... 25
Description of Junior Subordinated Debentures............................. 37
Book-Entry Issuance....................................................... 46
Description of Guarantee.................................................. 48
Relationship among the Capital Securities, the Junior Subordinated
Debentures and the Guarantee............................................ 50
Certain Federal Income Tax Consequences................................... 51
Underwriting.............................................................. 55
Legal Matters............................................................. 55
Experts................................................................... 55
</TABLE>
2,400,000 CAPITAL SECURITIES
CFB CAPITAL I
% Cumulative Capital Securities
(Liquidation Amount $25 per Capital Security)
Fully and Unconditionally Guaranteed,
as Described Herein, by
[LOGO]
-----------------
P R O S P E C T U S
------------------
PIPER JAFFRAY INC.
DAIN BOSWORTH
INCORPORATED
, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............... $ 18,182
NASD fee.......................................................... 6,500
Nasdaq fees....................................................... 12,000
Trustees' fees and expenses....................................... 12,000
Legal fees and expenses........................................... 100,000
Blue Sky fees and expenses........................................ 10,000
Accounting fees and expenses...................................... 30,000
Printing expenses................................................. 20,000
Miscellaneous expenses............................................ 6,318
---------
Total......................................................... $ 215,000
---------
---------
</TABLE>
All of the above items except the registration fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Bylaws require indemnification of directors and officers of
the Company to the fullest extent permitted by Delaware law. Section 145 of the
Delaware General Corporation Law generally provides that any person who was or
is a director or officer may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with the defense or settlement of any
threatened, pending or completed legal proceedings in which he or she is
involved by reason of the fact that he or she is or was a director or officer if
he or she acted in good faith and in a manner that he or she reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, if he or she had no reasonable
cause to believe that his or her conduct was unlawful. However, if the legal
proceeding is by or in the right of the corporation, the director or officer may
not be indemnified in respect of any claim, issue or matter as to which he or
she shall have been adjudged to be liable to the corporation unless the court in
which such action was brought deems it proper.
The Company currently has in effect policies of insurance which provide
insurance protection to its directors and officers against some liabilities
which may be incurred by them on account of their services to the Company. The
Company has also entered into indemnification agreements with each of its
directors and officers, which agreements provide for indemnification to the
fullest extent permitted by Delaware law, except that with respect to an action
commenced by an indemnitee against the Company or by the indemnitee as a
derivative action by or in the right of the Company, such indemnitees shall be
indemnified at the discretion of the Board of Directors. Subject to certain
limitations, the agreements also provide for indemnification against any and all
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by the indemnitee in connection with
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (including, without
limitation, any derivative action by or in the right of the Company) to which
the indemnitee is, was, or at any time becomes a party or is threatened to be
made a party by reason of the fact that the indemnitee is or was at any time a
director, officer, employee, or agent of the Company or is or was serving or at
any time serves at the request of the Company as a director, officer, employee,
or agent of another corporation, partnership, joint venture, trust, or other
enterprise.
II-1
<PAGE>
ITEM 16. EXHIBITS
(a) Exhibits
<TABLE>
<C> <S>
1.1 Form of Purchase Agreement.
2.1 Agreement and Plan of Reorganization dated as of June 25, 1996 between the
Registrant and Mountain Parks Financial Corp. (incorporated by reference to
Exhibit 2.1 to the Registrant's Registration Statement on Form S-4 (File No.
333-14439) as declared effective by the Securities and Exchange Commission on
November 6, 1996).
2.2 Agreement and Plan of Merger dated as of March 8, 1996 between the Registrant,
Trinidad Acquisition Corporation and Financial Bancorp, Inc. (incorporated by
reference to Exhibit 2.1 to the Registrant's Registration Statement on Form S-4
(File No. 333-6239) as declared effective by the Securities and Exchange
Commission on August 9, 1996).
4.1 Form of Subordinated Indenture dated February , 1997 to be entered into between
the Registrant and Wilmington Trust Company, as Indenture Trustee.
4.2 Form of Junior Subordinated Debenture (included as an exhibit to Exhibit 4.1).
4.3 Certificate of Trust of CFB Capital I.
4.4 Trust Agreement of CFB Capital I dated as of January 14, 1997.
4.5 Form of Amended and Restated Trust Agreement of CFB Capital I, to be dated
February , 1997.
4.6 Form of Capital Security Certificate of CFB Capital I (included as an exhibit to
Exhibit 4.5).
4.7 Form of Capital Securities Guarantee Agreement.
4.8 Form of Agreement as to Expenses and Liabilities (included as an exhibit to
Exhibit 4.5).
5.1 Opinion of Lindquist & Vennum P.L.L.P.
5.2 Opinion and Consent of Richards, Layton & Finger, P.A.
8.1 Opinion of Lindquist & Vennum P.L.L.P., counsel to the Registrant, as to certain
federal income tax matters.*
12.1 Statement re Computation of Ratios.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Hacker, Nelson & Co., P.C.
23.3 Consent of Fortner, Bayens, Levkulich and Co., P.C.
23.4 Consent of Arthur Andersen LLP.
23.6 Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1 above).
23.7 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2 above)
24.1 A power of attorney is set forth on the signature page of the Registration
Statement.
25.1 Form T-1 Statement of Eligibility of Wilmington Trust Company to act as trustee
under the Subordinated Indenture.
25.2 Form T-1 Statement of Eligibility of Wilmington Trust Company to act as trustee
under the Amended and Restated Trust Agreement.
25.3 Form T-1 Statement of Eligibility of Wilmington Trust Company to act as trustee
under the Capital Securities Guarantee Agreement.
99.1 Report of Arthur Andersen LLP regarding financial statements of Mountain Parks
Financial Corp.
</TABLE>
- ------------------------
* To be filed by amendment.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
(b) The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the 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 the registration statement 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.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
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 the Registrant of expenses
incurred or paid by a director, officer or controlling person of the 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, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(i) The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fargo and the State of North Dakota, on this 15th day
of January, 1997.
COMMUNITY FIRST BANKSHARES, INC.
By /s/ DONALD R. MENGEDOTH
------------------------------------------
Donald R. Mengedoth
PRESIDENT, CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD OF DIRECTORS
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
hereby constitutes and appoints Donald R. Mengedoth and Mark A. Anderson, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting upon said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or either of them, or their or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the 15th day of January, 1997,
by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------- ------------------------------------
<C> <S>
President, Chief Executive Officer,
/s/ DONALD R. MENGEDOTH Chairman of the Board of Directors
- ---------------------------------------- and Director (principal executive
Donald R. Mengedoth officer)
Executive Vice President, Chief
/s/ MARK A. ANDERSON Financial Officer, Secretary and
- ---------------------------------------- Treasurer (principal financial and
Mark A. Anderson accounting officer)
/s/ PATRICIA A. ADAM
- ---------------------------------------- Director
Patricia A. Adam
/s/ JAMES T. ANDERSON
- ---------------------------------------- Director
James T. Anderson
/s/ PATRICK E. BENEDICT
- ---------------------------------------- Director
Patrick E. Benedict
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------- ------------------------------------
<C> <S>
/s/ PATRICK DELANEY
- ---------------------------------------- Director
Patrick Delaney
/s/ JOHN H. FLITTIE
- ---------------------------------------- Director
John H. Flittie
/s/ CARGILL MACMILLAN, JR.
- ---------------------------------------- Director
Cargill MacMillan, Jr.
/s/ DENNIS M. MATHISEN
- ---------------------------------------- Director
Dennis M. Mathisen
/s/ DEAN E. SMITH
- ---------------------------------------- Director
Dean E. Smith
/s/ THOMAS C. WOLD
- ---------------------------------------- Director
Thomas C. Wold
/s/ HARVEY L. WOLLMAN
- ---------------------------------------- Director
Harvey L. Wollman
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------------
<C> <S> <C>
1.1 Form of Purchase Agreement
2.1 Agreement and Plan of Reorganization dated as of June 25, 1996 between the Registrant and
Mountain Parks Financial Corp. (incorporated by reference to Exhibit 2.1 to the Registrant's
Registration Statement on Form S-4 (File No. 333-14439) as declared effective by the Securities
and Exchange Commission on November 6, 1996)
2.2 Agreement and Plan of Merger dated as of March 8, 1996 between the Registrant, Trinidad
Acquisition Corporation and Financial Bancorp, Inc. (incorporated by reference to Exhibit 2.1 to
the Registrant's Registration Statement on Form S-4 (File No. 333-6239) as declared effective by
the Securities and Exchange Commission on August 9, 1996)
4.1 Form of Subordinated Indenture dated February , 1997 to be entered into between the Registrant
and Wilmington Trust Company, as Indenture Trustee
4.2 Form of Junior Subordinated Debenture (included as an exhibit to Exhibit 4.1)
4.3 Certificate of Trust of CFB Capital I
4.4 Trust Agreement of CFB Capital I dated as of January 14, 1997
4.5 Form of Amended and Restated Trust Agreement of CFB Capital I, to be dated February , 1997
4.6 Form of Capital Security Certificate of CFB Capital I (included as an exhibit to Exhibit 4.5)
4.7 Form of Capital Securities Guarantee Agreement
4.8 Form of Agreement as to Expenses and Liabilities (included as an exhibit to Exhibit 4.5)
5.1 Opinion of Lindquist & Vennum P.L.L.P.
5.2 Opinion and Consent of Richards, Layton & Finger, P.A.
8.1 Opinion of Lindquist & Vennum P.L.L.P., counsel to the Registrant, as to certain federal income
tax matters*
12.1 Statement re Computation of Ratios
23.1 Consent of Ernst & Young LLP
23.2 Consent of Hacker, Nelson & Co., P.C.
23.3 Consent of Fortner, Bayens, Levkulich and Co., P.C.
23.4 Consent of Arthur Andersen LLP
23.6 Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1 above)
23.7 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2 above)
24.1 A power of attorney is set forth on the signature page of the Registration Statement
25.1 Form T-1 Statement of Eligibility of Wilmington Trust Company to act as trustee under the
Subordinated Indenture
25.2 Form T-1 Statement of Eligibility of Wilmington Trust Company to act as trustee under the Amended
and Restated Trust Agreement
25.3 Form T-1 Statement of Eligibility of Wilmington Trust Company to act as trustee under the Capital
Securities Guarantee Agreement
99.1 Report of Arthur Andersen LLP regarding financial statements of Mountain Parks Financial Corp.
</TABLE>
- ------------------------
* To be filed by amendment.
<PAGE>
CAPITAL SECURITIES
CFB CAPITAL I
______ CUMULATIVE CAPITAL SECURITIES
(LIQUIDATION PREFERENCE OF $25 PER CAPITAL SECURITY)
PURCHASE AGREEMENT
February ___, 1997
PIPER JAFFRAY INC.
DAIN BOSWORTH INCORPORATED
c/o Piper Jaffray Inc.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
Community First Bankshares, Inc., a Delaware corporation (the "Company"),
and its fiduciary subsidiary, CFB Capital I, a statutory business trust
organized under the Delaware Business Trust Act (the "Delaware Act") (the
"Trust" and together with the Company, the "Offerors"), propose that the Trust
issue and sell to Piper Jaffray Inc. and Dain Bosworth Incorporated (the
"Underwriters") an aggregate of 2,400,000 of the Trust's _______ Cumulative
Capital Securities, with a liquidation preference of the $25.00 per capital
security (the "Capital Securities"), the terms of which are more fully described
in the Prospectus (as hereinafter defined). The Offerors propose that the Trust
issue the Capital Securities pursuant to an Amended and Restated Trust Agreement
among Wilmington Trust Company, as Property Trustee and Indenture Trustee, the
administrative trustees named therein (the "Administrative Trustees") and the
Company (the "Trust Agreement"). The Capital Securities will be guaranteed by
the Company with respect to distributions and payments upon liquidation,
redemption and otherwise (the "Guarantee") pursuant to a Guarantee Agreement
(the "Guarantee Agreement"), dated as of February ___, 1997, between the Company
and Wilmington Trust Company, as trustee (the "Guarantee Trustee"), and entitled
to the benefits of certain backup undertakings described in the Prospectus (as
defined herein) with respect to the Company's agreement pursuant to the Expense
Agreement (as defined herein) to pay all expenses relating to administration of
the Trust.
The proceeds of the sale of the Capital Securities will be used to purchase
junior subordinated deferrable interest debentures (the "Junior Subordinated
Debentures") issued by the Company pursuant to an Indenture, dated as of
February ___, 1997, between the Company and Wilmington Trust Company as trustee
(the "Indenture").
The Offerors hereby confirm their agreement with respect to the sale of the
Capital Securities to the Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration statement on
Form S-3 (File No. _______________) with respect to the Capital Securities, the
Guarantee and the Junior Subordinated Debentures including a preliminary form of
prospectus, has been prepared by the Offerors in conformity
<PAGE>
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and the Trust Indenture Act,
of 1939, as amended (the "Trust Indenture Act") and the rules and regulations
thereunder and has been filed with the Commission; and, if the Offerors have
elected to rely upon Rule 462(b) of the Rules and Regulations to increase the
size of the offering registered under the Act, the Offerors will prepare and
file with the Commission a registration statement with respect to such increase
pursuant to Rule 462(b). Copies of such registration statement(s) and
amendments and each related preliminary prospectus have been delivered to the
Underwriters.
If the Offerors have elected not to rely upon Rule 430A of the Rules and
Regulations, the Offerors have prepared and will promptly file an amendment to
the registration statement and an amended prospectus (including a term sheet
meeting the requirements of Rule 434 of the Rules and Regulations) if necessary
to complete the Prospectus. If the Offerors have elected to rely upon Rule 430A
of the Rules and Regulations, they will prepare and file a prospectus (or a term
sheet meeting the requirements of Rule 434) pursuant to Rule 424(b) that
discloses the information previously omitted from the prospectus in reliance
upon Rule 430A. Such registration statement, as amended at the time it is or
was declared effective by the Commission, and, in the event of any amendment
thereto after the effective date and prior to the Closing Date (as hereinafter
defined), such registration statement as so amended (but only from and after the
effectiveness of such amendment), including a registration statement (if any)
filed pursuant to Rule 462(b) of the Rules and Regulations increasing the size
of the offering registered under the Act and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
Rules 430A(b) and 434(d) of the Rules and Regulations, is hereinafter called the
"Registration Statement". The prospectus included in the Registration Statement
at the time it is or was declared effective by the Commission is hereinafter
called the "Prospectus", except that if any prospectus (including any term sheet
meeting the requirements of Rule 434 of the Rules and Regulations provided by
the Offerors for use with a prospectus subject to completion within the meaning
of Rule 434 in order to meet the requirements of Section 10(a) of the Rules and
Regulations) filed by the Offerors with the Commission pursuant to Rule 424(b)
(and Rule 434, if applicable) of the Rules and Regulations or any other such
prospectus provided to you by the Offeror for use in connection with the
offering of the Capital Securities (whether or not required to be filed by the
Offeror with the Commission pursuant to Rule 424(b) of the Rules and
Regulations) differs from the prospectus on file at the time the Registration
Statement is or was declared effective by the Commission, the term "Prospectus"
shall refer to such differing prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) from and after the time such
prospectus is filed with the Commission or transmitted to the Commission for
filing pursuant to such Rule 424(b) (and Rule 434, if applicable) or from and
after the time it is first provided to you by the Offeror for such use. The
term "Preliminary Prospectus" as used herein means the preliminary prospectus
included in any Registration Statement prior to the time it becomes or became
effective under the Act and any prospectus subject to completion as described in
Rule 430A or 434 of the Rules and Regulations.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Offerors represent and warrant to, and agree with, the
Underwriters as follows:
(i) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and the Preliminary
Prospectus, at the time of filing thereof, did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; except
that the foregoing shall not apply to statements in or
-2-
<PAGE>
omissions from the Preliminary Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by either
Underwriter for use in the preparation thereof.
(ii) As of the time the Registration Statement (or any
post-effective amendment thereto, including a registration statement (if
any) filed pursuant to Rule 462(b) of the Rules and Regulations increasing
the size of the offering registered under the Act) is or was declared
effective by the Commission, upon the filing or first delivery to the
Underwriters of the Prospectus (or any supplement to the Prospectus
(including any term sheet meeting the requirements of Rule 434 of the Rules
and Regulations)) and at the Closing Date (as hereinafter defined), (A) the
Registration Statement and Prospectus (in each case, as so amended and/or
supplemented) conformed or will conform in all material respects to the
requirements of the Act and the Rules and Regulations and the Registration
Statement and Prospectus (in each case as so amended and/or supplemented)
conformed or will conform in all material respects to the requirements of
the Trust Indenture Act and the rules and regulations thereunder, (B) the
Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and (C) the Prospectus (as so supplemented) did not or will
not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they are or were
made, not misleading; except that the foregoing shall not apply to (i)
statements in or omissions from any such document in reliance upon, and in
conformity with, written information furnished to the Offerors by either
Underwriter specifically for use in the preparation thereof and (ii) that
part of the Registration Statement which constitutes the Statement of
Eligibility and Qualification ("Form T-1") under the Trust Indenture Act.
If the Registration Statement has been declared effective by the
Commission, no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
initiated or, to the Offeror's knowledge, threatened by the Commission.
(iii) The documents of the Company incorporated by reference
in the Registration Statement and the Prospectus, when they were filed with
the Commission conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
materiel fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Registration Statement and the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission will
conform in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder, and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
(iv) The consolidated financial statements of the Company,
together with the notes thereto, incorporated by reference in the
Registration Statement, Preliminary Prospectus and Prospectus comply in all
material respects with the requirements of the Act and the Exchange Act and
fairly present the consolidated financial condition of the Company and its
consolidated subsidiaries as of the dates indicated and the results of
operations and changes in cash flows for the periods therein specified in
conformity with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise stated in the
Registration Statement and Prospectus) and the independent public
accountants whose reports are contained therein are
-3-
<PAGE>
independent public accountants as required by the Act and the Rules and
Regulations. The summary financial information included in the Preliminary
Prospectus and Prospectus under the caption "Summary Consolidated Financial
Data," present fairly the information required to be stated therein.
(v) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of Delaware
and is duly registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"), supervised by the Board of
Governors of the Federal Reserve System (the "FRB"). The only subsidiaries
of the Company and the percentage of issued and outstanding shares of stock
of each such subsidiary owned of record and beneficially by the Company are
set forth in Exhibit A attached hereto. Each such subsidiary has been duly
organized and is validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization as the case may be. Each
of the Company and its subsidiaries has full corporate power and authority
to own its properties and conduct its business as currently being carried
on and as described in the Registration Statement and Prospectus, and is
duly qualified to do business as a foreign corporation in good standing
under the corporation and financial services laws of each jurisdiction in
which the conduct of its business or ownership or lease of its properties
requires such qualification and where the failure to be so qualified would,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business, prospects, assets,
results of operations or properties of the Company and its subsidiaries
taken as a whole. Other than the foregoing subsidiaries and the Trust, the
Company owns no capital stock or other equity, ownership or proprietary
interest in any company, partnership, association, trust or other entity.
The accounts of each of the Company's subsidiaries which are banks are
insured by the Bank Insurance Fund of the Federal Deposit Insurance
Corporation (the "FDIC") up to the maximum applicable amount in accordance
with the rules and regulations of the FDIC, and no proceedings for the
termination or revocation of such membership or insurance are pending, or,
to the knowledge of the company, threatened.
(vi) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act with full trust
power and authority to own property and to conduct its business as
described in the Registration Statement and Prospectus and to enter into
and perform its obligations under this Agreement, the Capital Securities,
the Common Securities and the Trust Agreement and is authorized to do
business in each jurisdiction in which such qualification is required,
except where the failure to so qualify would not have a material adverse
effect on the Company's condition (financial or otherwise), earnings,
business, prospects, assets, results of operations or properties taken as a
whole; the Trust has conducted and will conduct no business other than the
transactions contemplated by the Trust Agreement and described in the
Prospectus; the Trust is not a party to or otherwise bound by any agreement
other than those described in the Prospectus; the Trust is and will be
classified for United States federal income tax purposes as a grantor trust
and not as an association taxable as a corporation; and the Trust is and
will be treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(vii) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Trust nor the Company, nor any of
its Subsidiaries has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, or
declared or paid any
-4-
<PAGE>
dividends or made any distribution of any kind with respect to its capital
stock; and there has not been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the
issuance of shares upon the exercise of outstanding options or warrants),
or any material change in the short-term or long-term debt, or any issuance
of options, warrants, convertible Capital Securities or other rights to
purchase the capital stock, of the Trust, the Company or any of its
Subsidiaries, or any material adverse change, or any development involving
a prospective material adverse change, in the general affairs, condition
(financial or otherwise), business, key personnel, property, prospects, net
worth or results of operations of the Trust or the Company and its
Subsidiaries, taken as a whole.
(viii) Except as set forth in the Registration Statement and
the Prospectus or in the documents incorporated therein by reference, there
is not pending or, to the knowledge of the Trust or the Company, threatened
or contemplated, any action, suit or proceeding to which the Trust or the
Company or any of its subsidiaries is a party or to which either of their
assets may be subject, before or by any court or governmental agency,
authority or body, or any arbitrator, which might result in any material
adverse change in the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Trust or the Company
and its subsidiaries, taken as a whole.
(ix) There are no contracts or documents of the Trust or the
Company or any of its Subsidiaries that are required to be filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations which contracts or documents have not been so filed.
(x) Each of this Agreement, the Indenture, the Trust Agreement,
the Guarantee and the Agreement as to Expenses and Liabilities (the
"Expense Agreement") has been duly authorized, executed and delivered by
the Company and the Trust and constitutes a valid, legal and binding
obligation of the Offerors, enforceable in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity. The
execution, delivery and performance of this Agreement, the Indenture, the
Trust Agreement, the Guarantee Agreement and the Expense Agreement and the
consummation of the transactions herein or therein contemplated will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any agreement or instrument to
which the Company or the Trust is a party or by which it is bound or to
which any of its property is subject, the Company's charter or bylaws, the
Trust's Trust Agreement or its certificate of trust filed with the State of
Delaware on January ___, 1997 (the "Certificate of Trust") or any order,
rule, regulation or decree of any court or governmental agency or body
having jurisdiction over the Company or the Trust or any of the properties
of either the Company or the Trust; no consent, approval, authorization or
order of, or filing with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, the
Indenture, the Trust Agreement, the Guarantee and the Expense Agreement or
for the consummation of the transactions contemplated hereby or thereby,
including the issuance or sale of the Junior Subordinated Debentures by the
Company and the Capital Securities by the Trust, except such as may be
required under the Act or state securities or blue sky laws; each of the
Company and the Trust has full power and authority to enter into this
Agreement, the Indenture, the Trust Agreement, the Guarantee and the
Expense Agreement, and to authorize, issue and sell the Capital Securities
as contemplated by this Agreement; and each of the Indenture, the Trust
Agreement and the Guarantee Agreement has been duly qualified under the
Trust
-5-
<PAGE>
Indenture Act and will conform in all material respects to the statements
relating thereto in the Registration Statement and the Prospectus.
(xi) All of the issued and outstanding shares of capital stock of
the Company, including the shares of Common Stock issued, are duly
authorized and are, or will be at the Closing Date, validly issued, fully
paid and nonassessable, have been issued, in compliance with all federal
and state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities, and the holders thereof are not subject to personal liability
by reason of being such holders; and the capital stock of the Company,
including the Common Stock conforms to the description thereof in the
Registration Statement and Prospectus. Except as otherwise stated in the
Registration Statement and Prospectus, there are no preemptive rights or
other rights to subscribe for or to purchase, or any restriction upon the
voting or transfer of, any shares of Common Stock pursuant to the Company's
charter, bylaws or any agreement or other instrument to which the Company
is a party or by which the Company is bound. Neither the filing of the
Registration Statement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other capital stock of the
Company. All of the issued and outstanding shares of capital stock of each
of the Company's subsidiaries have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise
described in the Registration Statement and Prospectus and except for any
directors' qualifying shares, the Company owns, or on the Closing Date
shall own, of record and beneficially, free and clear of any security
interests, claims, liens, proxies, equities or other encumbrances, all of
the issued and outstanding shares of such stock. Except as described in
the Registration Statement and the Prospectus, there are no options,
warrants, agreements, contracts or other rights in existence to purchase or
acquire from the Company or any Subsidiary of the Company any shares of the
capital stock of the Company or any Subsidiary of the Company. The Company
has an authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus.
(xii) The Junior Subordinated Debentures have been duly
authorized by the Company and at the Closing Date, will have been duly
executed by the Company and, when authenticated in the manner provided for
in the Indenture and delivered against payment therefor as described in the
Prospectus, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except to
the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity, will be in
the form contemplated by, and entitled to the benefits of, the Indenture
and will conform in all material respects to the statements relating
thereto in the Prospectus
(xiii) The Common Securities have been duly authorized by the
Trust Agreement and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration Statement and
Prospectus, will be validly issued and (subject to the terms of the Trust
Agreement) fully paid and nonassessable undivided beneficial interests in
the assets of the Trust and will conform to all statements relating thereto
contained in the Prospectus; the issuance of the Common Securities is not
subject to preemptive or other similar rights; and at the Closing Date all
of the issued and outstanding Common Securities of the Trust will be
directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(xiv) The Capital Securities have been duly authorized by the
Trust Agreement and, when issued and delivered pursuant to this Agreement
against payment of the
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consideration set forth herein, will be validly issued and fully paid and
non-assessable undivided beneficial interests in the Trust, will be
entitled to the benefits of the Trust Agreement and will in all material
respects conform to the statements relating thereto contained in the
Prospectus; the issuance of the Capital Securities is not subject to
preemptive or other similar rights; and holders of Capital Securities will
be entitled to the same limitation of personal liability under Delaware law
as extended to stockholders of private corporations for profit.
(xv) The Indenture, the Trust Agreement, the Guarantee Agreement
and the Expense Agreement are in substantially the respective forms filed
as exhibits to the Registration Statement.
(xvi) The Company's obligations under the Guarantee are
subordinated and junior in right of payment to all Senior Indebtedness of
the Company and are, or will be, pari passu with the most senior preferred
stock hereafter issued by the Company.
(vvii) The Junior Subordinated Debentures are subordinate and
junior in right of payment to all "Senior Indebtedness" (as defined in the
Indenture) of the Company.
(xviii) Each of the Administrative Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to
execute and deliver the Trust Agreement.
(vix) The Trust and the Company and each of its Subsidiaries
holds, and is operating in compliance in all material respects with, all
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and orders of any governmental or self-regulatory body
required for the conduct of its business and all such franchises, grants,
authorizations, licenses, permits, easements, consents, certifications and
orders are valid and in full force and effect, the failure to hold or
operate in compliance with the foregoing or the lack of a validity, force
or effect of the foregoing would not have a material adverse effect on the
condition (financial or otherwise), earnings, business, prospects, assets,
results of operations or properties of the Company and its subsidiaries
taken as a whole; and the Trust and the Company and each of its
subsidiaries is and has been in compliance in all material respects with
all applicable federal, state, local and foreign laws, regulations, orders
and decrees, except to the extent that the failure to comply would not have
a material adverse effect on the condition (financial or otherwise),
earnings, business, prospects, assets, results of operations or properties
of the Company and its subsidiaries taken as a whole.
(xx) The Company and its Subsidiaries have good and marketable
title to all property described in the Registration Statement and
Prospectus as being owned by them, in each case free and clear of all
liens, claims, security interests or other encumbrances except such as are
described in the Registration Statement and the Prospectus; the property
held under lease by the Company and its Subsidiaries is held by them under
valid, subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material respect
with the conduct of the business of the Company or its subsidiaries; the
Company and each of its subsidiaries owns or possesses all patents, patent
applications, trademarks, service marks, tradenames, trademark
registrations, service mark registrations, copyrights, licenses,
inventions, trade secrets and rights necessary for the conduct of the
business of the Company and its subsidiaries as currently carried on and as
described in the Registration Statement and Prospectus; except as stated in
the Registration Statement and Prospectus, no name which the Company or any
of its
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Subsidiaries uses and no other aspect of the business of the Company or any
of its Subsidiaries will involve or give rise to any infringement of, or
license or similar fees for, any patents, patent applications, trademarks,
service marks, tradenames, trademark registrations, service mark
registrations, copyrights, licenses, inventions, trade secrets or other
similar rights of others material to the business or prospects of the
Company and neither the Company nor any of its Subsidiaries has received
any notice alleging any such infringement or fee.
(xxi) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or bylaws; the Trust is not in
violation of the Trust Agreement or its Certificate of Trust; none of the
Company, any of its Subsidiaries or the Trust is in breach of or otherwise
in default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note, indenture, loan agreement
or any other material contract, lease or other instrument to which it is
subject or by which any of them may be bound, or to which any of the
material property or assets of the Company, any of its Subsidiaries of the
Trust is subject.
(xxii) The Trust and the Company and its subsidiaries have
filed all federal, state, local and foreign income and franchise tax
returns required to be filed and are not in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto, other than any which the Company or any of its
subsidiaries is contesting in good faith.
(xxiii) The Offerors have not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Capital Securities and the Common Stock other than
any Preliminary Prospectus or the Prospectus or other materials permitted
by the Act to be distributed by the Company.
(xxiv) The Company and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxv) Other than as contemplated by this Agreement or
described in the Registration Statement, the Company has not incurred any
liability for any finder's or broker's fee or agent's commission in
connection with the execution and delivery of this Agreement, the Merger
Agreement or the consummation of the transactions contemplated hereby or
thereby.
(xxvi) Neither the Trust, the Company or any of its
subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or an "investment adviser" within the meaning of the
Investment Advisers Act of 1940, as amended.
(xxvii) No report or application filed by the Company or any of
its Subsidiaries with the FRB, OCC, Department or the FDIC, as of the date
it was filed, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading when made or
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failed to comply with the applicable requirements of the FRB, OCC,
Department or the FDIC, as the case may be.
(xxviii) The proceeds from the sale of the Capital Securities
will constitute "tier 1" capital (as defined in 12 C.F.R. Part 325).
(xxix) Neither of the Offerors nor any of their affiliates is
presently doing business with the government of Cuba or with any person or
affiliate located in Cuba.
(b) Any certificate signed by any officer of the Company or a trustee
of the Trust and delivered to either Underwriter or to counsel for either
Underwriter shall be deemed a representation and warranty by the Company to you
as to the matters covered thereby.
3. PURCHASE, SALE AND DELIVERY OF CAPITAL SECURITIES; ADVISORY FEE.
On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Trust agrees to issue and sell 2,400,000 Capital Securities to you, and
you agree to purchase the Capital Securities from the Trust at a purchase
price per Capital Security of $25.00 per share. As compensation to the
Underwriters for their commitments hereunder and in view of the fact that the
proceeds of the sale of the Capital Securities (together with the entire
proceeds from the sale by the Trust to the Company of the Common Securities)
will be used to purchase the Junior Subordinated Debentures, the Company
hereby agrees to pay at the Closing Date to you, a commission per Capital
Security equal in amount to ths percent ( %) of the gross proceeds from
the sale of the Capital Securities to be delivered by the Trust hereunder at
the Closing Date.
The Capital Securities will be delivered by the Company to you against
payment of the purchase price therefor by certified or official bank check or
other next day funds payable to the Company at the offices of Piper Jaffray
Inc., Piper Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota, or
such other location as may be mutually acceptable, at 9:00 a.m. Central time on
the third (or if the Capital Securities are priced, as contemplated by Rule
15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, on the fourth)
full business day following the date hereof, or at such other time and date as
you and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act,
such time and date of delivery being herein referred to as the "Closing Date."
Delivery of the Capital Securities may be made by credit through full fast
transfer to the accounts at The Depository Trust Company designated by you.
Certificates representing the Capital Securities, in definitive form and in such
denominations and registered in such names as you may request upon at least two
business days' prior notice to the Company shall be prepared and will be made
available for checking and packaging, not later than 10:30 a.m., Central time,
on the business day next preceding the Closing Date at the offices of Piper
Jaffray Inc., Piper Jaffray Tower, 222 South Ninth Street, Minneapolis,
Minnesota, or such other location as may be mutually acceptable.
It is understood that each Underwriter may (but shall not be obligated
to) make payment to the Company on behalf of the other Underwriter for the
Securities to be purchased by such Underwriter. Any such payment shall not
relive such other Underwriter of any of its obligations hereunder. Nothing
herein contained shall constitute either of the Underwriters an unincorporated
association or partner with either or both Offerors.
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4. COVENANTS.
(a) The Offerors jointly and severally covenant and agree with the
Underwriters as follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to cause
the Registration Statement and any post-effective amendments thereto to
become effective as promptly as possible; the Company will notify you
promptly of the time when the Registration Statement or any post-effective
amendment to the Registration Statement has become effective or any
supplement to the Prospectus (including any term sheet within the meaning
of Rule 434 of the Rules and Regulations) has been filed and of any request
by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or additional information; if the Company has
elected to rely on Rule 430A of the Rules and Regulations, the Company will
prepare and file a Prospectus (or term sheet within the meaning of Rule 434
of the Rules and Regulations) containing the information omitted therefrom
pursuant to Rule 430A of the Rules and Regulations with the Commission
within the time period required by, and otherwise in accordance with the
provisions of, Rules 424(b), 430A and 434, if applicable, of the Rules and
Regulations; if the Company has elected to rely upon Rule 462(b) of the
Rules and Regulations to increase the size of the offering registered under
the Act, the Company will prepare and file a registration statement with
respect to such increase with the Commission within the time period
required by, and otherwise in accordance with the provisions of,
Rule 462(b); the Offerors will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the
Registration Statement or Prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) that, in your opinion,
may be necessary or advisable in connection with your distribution of the
Capital Securities; and the Offerors will not file any amendment or
supplement to the Registration Statement or Prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) to which
you shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing.
(ii) The Offerors will advise the Underwriters, promptly after
they shall receive notice or obtain knowledge thereof, of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Capital Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose; and the
Offerors will promptly use their best efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such a stop order should be
issued.
(iii) Within the time during which a prospectus (including
any term sheet within the meaning of Rule 434 of the Rules and Regulations)
relating to the Capital Securities is required to be delivered under the
Act, the Offerors will comply as far as it is able with all requirements
imposed upon it by the Act, as now and hereafter amended, and by the Rules
and Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Capital Securities as
contemplated by the provisions hereof and the Prospectus. If during such
period any event occurs as a result of which the Prospectus would include
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is necessary to
amend the Registration Statement or supplement the Prospectus to comply
with the Act, the Offerors will promptly notify the Underwriters and will
amend the Registration Statement or supplement the Prospectus (at the
expense of the Company) so as to correct such statement or omission or
effect such compliance.
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(iv) The Offerors will use their best efforts to qualify the
Capital Securities and the Junior Subordinated Debentures for sale under
the securities laws of such jurisdictions as the Underwriters may
reasonably designate and to continue such qualifications in effect so long
as required for the distribution of the Capital Securities, except that the
Offerors shall not be required in connection therewith to qualify as a
foreign corporation or to execute a general consent to service of process
in any state.
(v) The Offerors will furnish to the Underwriters copies of the
Registration Statement (three of which will be signed and will include all
exhibits), each of the Preliminary Prospectuses, the Prospectus, and all
amendments and supplements (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations) to such documents, in each case as
soon as available and in such quantities as each Underwriter may from time
to time reasonably request.
(vi) During a period of five years commencing with the date
hereof, the Company will furnish to the Underwriters copies of all periodic
and special reports furnished to the stockholders of the Company and all
information, documents and reports filed with the Commission.
(vii) The Company will make generally available to its
security holders and holders of the Capital Securities as soon as
practicable, but in any event not later than 15 months after the end of the
Company's current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period beginning after the effective date of
the Registration Statement that shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 of the Rules and Regulations.
(viii) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 8(a) hereof or is terminated,
will pay or cause to be paid (A) all expenses (including transfer taxes
allocated to the respective transferees) incident to the performance of the
obligations of each Offeror under this agreement, (B) all expenses and fees
(including, without limitation, fees and expenses of each Offeror's
accountants and counsel but, except as otherwise provided below, not
including fees of the Underwriter's counsel) in connection with the
preparation, printing, filing, delivery, and shipping of the Registration
Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Capital Securities, each Preliminary
Prospectus, the Prospectus, and any amendment thereof or supplement
thereto, and the printing, delivery, and shipping of this Agreement and
other underwriting documents, including Blue Sky Memoranda, (C) all filing
fees and fees and disbursements of the Underwriters' counsel incurred in
connection with the qualification of the Capital Securities for offering
and sale by you or by dealers under the securities or blue sky laws of the
states and other jurisdictions which you shall designate, (D) the fees and
expenses of any transfer agent or registrar, (E) the filing fees incident
to any required review by the National Association of Capital Securities
Dealers, Inc. ("NASD") of the terms of the sale of the Capital Securities,
(F) listing fees, if any, (G) the fees and expenses of the Indenture
Trustee, including the fees and disbursements of counsel for the Indenture
Trustee in connection with the Indenture and Junior Subordinated
Debentures, (H) the fees and expenses of the Property Trustee, including
the fees and disbursements of counsel for the Property Trustee in
connection with the Trust Agreement and the Certificate of Trust, and (I)
all other costs and expenses incident to the performance of the Offerors'
obligations hereunder that are not otherwise specifically provided for
herein. If the sale of the Capital Securities provided for herein is not
consummated by reason of action by either Offeror pursuant to Section 8(a)
hereof which
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prevents this Agreement from becoming effective, or by reason of any
failure, refusal or inability on the part of either Offeror to perform any
agreement on its part to be performed, or because any other condition of
your obligations hereunder required to be fulfilled by either Offeror is
not fulfilled, the Company will reimburse you for all out-of-pocket
disbursements (including fees and disbursements of counsel) incurred by the
Underwriters in connection with their investigation, preparing to market
and marketing the Capital Securities or in contemplation of performing
their obligations hereunder. Neither Offeror shall in any event be liable
to you for loss of anticipated profits from the transactions covered by
this Agreement.
(ix) The Offerors will apply the net proceeds from the sale of
the Capital Securities to be sold by the Trust hereunder for the purposes
set forth in the Prospectus and will file such reports with the Commission
with respect to the sale of the Capital Securities and the application of
the proceeds therefrom as may be required in accordance with Rule 463 of
the Rules and Regulations.
(x) The Offerors have not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of either Offeror to facilitate
the sale or resale of the Capital Securities, and has not effected any
sales of Common Stock which are required to be disclosed in response to
Item 701 of Regulation S-K under the Act which have not been so disclosed
in the Registration Statement.
(xi) Neither Offeror will incur any liability for any finder's or
broker's fee or agent's commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xii) The Offerors will inform the Florida Department of
Banking and Finance at any time prior to the consummation of the
distribution of the Capital Securities by you if it commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba. Such information will be provided within 90 days after
the commencement thereof or after a change occurs with respect to
previously reported information.
5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriters hereunder are subject to the accuracy, as of the date hereof and at
the Closing Date (as if made at the Closing Date), of and compliance with all
representations, warranties and agreements of the Offerors contained herein, to
the performance by each Offeror of its obligations hereunder and to the
following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., Central time, on the date of this Agreement, or such later time
and date as you shall approve and all filings required by Rules 424, 430A and
434 of the Rules and Regulations shall have been timely made; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereof shall have been issued and no proceedings for the issuance of such an
order shall have been initiated or threatened; and any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) The Underwriters shall not have advised the Company or the Trust
that the Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), contains an untrue statement of
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fact which, in your opinion, is material, or omits to state a fact which, in
your opinion, is material and is required to be stated therein or necessary to
make the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, neither the Trust, the Company nor any of its subsidiaries
shall have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any
dividends or made any distribution of any kind with respect to its capital
stock; and there shall not have been any change in the capital stock (other than
a change in the number of outstanding shares of Common Stock due to the issuance
of shares upon the exercise of outstanding options or warrants), or any material
change in the short-term or long-term debt of the Company, or any issuance of
options, warrants, convertible securities or other rights to purchase the
capital stock of the Company or any of its subsidiaries, or any material adverse
change or any development involving a prospective material adverse change
(whether or not arising in the ordinary course of business), in the general
affairs, condition (financial or otherwise), business, key personnel, property,
prospects, net worth or results of operations of the Trust or the Company and
its subsidiaries, taken as a whole, that, in your judgment, makes it impractical
or inadvisable to offer or deliver the Capital Securities on the terms and in
the manner contemplated in the Prospectus.
(d) On the Closing Date, there shall have been furnished to the
Underwriters the opinion of Lindquist & Vennum, counsel for the Company, dated
the Closing Date and addressed to the Underwriters, to the effect that:
(i) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Minnesota and is duly registered as a bank holding
company under the BHC Act. The deposit accounts of each of the Company's
subsidiaries that is a bank are insured by the FDIC to the fullest extent
permitted by law, and, to the knowledge of such counsel, no proceedings for
the termination or revocation of such membership or insurance are pending
or threatened. Each of the Company and its subsidiaries has full corporate
power and authority to own its properties and conduct its business as
currently being carried on and as described in the Registration Statement
and Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which it owns
or leases real property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would have a
material adverse effect upon the business, condition (financial or
otherwise) or properties of the Company and its subsidiaries, taken as a
whole.
(ii) The capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under the
caption "Capitalization," "Description of the Junior Subordinated
Debentures." All of the issued and outstanding shares of the capital stock
of the Company have been duly authorized and validly issued and are fully
paid and nonassessable, and the holders thereof are not subject to personal
liability by reason of being such holders. Except as otherwise stated in
the Registration Statement and Prospectus, there are no preemptive rights
or options, warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company any shares of the capital stock of the
Company pursuant to the Company's charter, bylaws or any agreement or other
instrument known to such counsel to which the Company is a party or by
which the Company is bound. To the best of such counsel's knowledge,
neither the filing of the Registration Statement nor the offering or sale
of the Junior Subordinated Debentures or
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Capital Securities as contemplated by this Agreement gives rise to any rights
for or relating to the registration of any shares of Common Stock or other
securities of the Company.
(iii) All of the issued and outstanding shares of capital
stock of each of the Company's Subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and, to the
best of such counsel's knowledge, except as otherwise described in the
Registration Statement and Prospectus and except for directors' qualifying
shares, the Company owns of record and beneficially, free and clear of any
security interests, claims, liens, proxies, equities or other encumbrances
in the case of the subsidiaries set forth on Exhibit A attached hereto,
that percentage of shares of the issued and outstanding shares of such
subsidiaries' stock as is set forth on such Exhibit A. To the best of such
counsel's knowledge, except as described in the Registration Statement and
Prospectus, there are no options, warrants, agreements, contracts or other
rights in existence to purchase or acquire from the Company or any of its
subsidiaries any shares of the capital stock of any subsidiary of the
Company.
(iv) All of the issued and outstanding Common Securities of the
Trust are owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
(v) The Trust Agreement has been duly qualified under the Trust
Indenture Act.
(vi) The Junior Subordinated Debentures are in the form
contemplated by the Indenture, have been duly authorized, executed and
delivered by the Company and, when authenticated by the Indenture Trustee
in the manner provided for in the Indenture and delivered against payment
therefor, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to
the extent that enforcement thereof may be limited by bankruptcy.
(vii) The Junior Subordinated Debentures are subordinate and
junior in right of payment to all "Senior Indebtedness" (as defined in the
Indenture) of the Company.
(viii) Neither the Company nor the Trust is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the 1940 Act.
(ix) The Statements set forth in the Prospectus under the caption
"Certain Federal Income Tax Consequences" constitute a fair and accurate
summary of the matters addressed therein, based upon current law and the
assumptions stated or referred to therein.
(x) Under current law, 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 the Junior
Subordinated Debentures, and each holder will be required to include in its
gross income any original issue discount accrued with respect to its
allocable share of the Junior Subordinated Debentures.
(xi) For federal income tax purposes, (a) the Junior Subordinated
Dentures will constitute indebtedness of the Company and (b) the interest
on the Junior Subordinated Debentures will be deductible by the Company on
an economic accrual basis in accordance
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with Section 163(e) of the Internal Revenue Code of 1986, as amended, and
Treasury Regulation Section 1.163-7.
(xii) To the best of such counsel's knowledge and information
after due inquiry, the Trust is not required to be authorized to do
business in any other jurisdiction and the Trust is not a party to or
otherwise bound by any agreement other than those described in the
Prospectus.
(xiii) The Trust Agreement has been duly authorized, executed
and delivered by the Company, the Property Trustee and the Administrative
Trustees.
(xiv) The Trust is not in violation of its Certificate of
Trust or the Trust Agreement or, to the best of such counsel's knowledge
and information after due inquiry, in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or any other instrument of which the Trust is a party or by which it may be
bound, or to which any of the property or assets of the Trust is subject.
(xv) The Registration Statement has become effective under the
Act and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
such counsel, threatened by the Commission.
(xvi) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings or rulings,
contracts and other documents are accurate in all material respects and
fairly present the information required to be shown; and such counsel does
not know of any statutes or legal or governmental proceedings required to
be described in the Prospectuses that are not described as required, or of
any contracts or documents of a character required to be described in the
Registration Statement or Prospectus or included as exhibits to the
Registration Statement that are not described or included as required.
(xvii) The reports of the Company incorporated by reference in
the Registration Statement and the Prospectus or any further amendment or
supplement thereto made by the Company (other than the financial
statements, other financial data and related schedules therein, as to which
such counsel need express no opinion), when they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
(xviii) The Company has full corporate power and authority and
the Trust has full trust power and authority to enter into this Agreement,
the Indenture, the Trust Agreement, the Guarantee Agreement and the Expense
Agreement to which it is a party and to issue the Junior Subordinated
Debentures and Capital Securities, as the case may be, and to effect the
transactions contemplated by this Agreement, the Indenture, the Trust
Agreement, the Guarantee Agreement and the Expense Agreement to which it is
a party, and each of this Agreement, the Indenture, the Trust Agreement,
the Guarantee Agreement and the Expense Agreement is duly authorized,
executed and delivered by the Company and the Trust, as applicable, and
constitutes a valid, legal and binding obligation of the Company
enforceable in accordance with its terms (except as rights to indemnity
hereunder may be limited by federal or state securities laws and except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
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generally and subject to general principles of equity. The execution,
delivery and performance of this Agreement, the Indenture, the Trust
Agreement, the Guarantee Agreement, the Capital Securities, the Common
Securities, the Junior Subordinated Debentures and the Guarantee and the
consummation of the transactions herein or therein contemplated will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule or regulation, any agreement
or instrument known to such counsel to which the Company or the Trust is a
party or by which either is bound or to which any of their property is
subject, the Company's charter or bylaws, or the Trust's Certificate or any
order or decree known to such counsel of any court or governmental agency
or body having jurisdiction over the Company or the Trust or any of its
respective properties, except for any breach, violation or default which
would not have a material adverse effect on the Company; and no consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Indenture, the Trust Agreement, the
Guarantee Agreement, the Expense Agreement, the Capital Securities, the
Junior Subordinated Debentures, or the Guarantee or for the consummation of
the transactions contemplated hereby or thereby, including the issuance or
sale of the Junior Subordinated Debentures by the Company and the Common
Securities and Capital Securities by the Trust, except (a) such as may be
required under the Act or state securities or blue sky laws, each of which
has been obtained and (b) the qualification of the Trust Agreement, the
Guarantee Agreement and the Indenture under the Trust Indenture Act and the
regulations thereunder.
(xix) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries is in violation of its respective
charter or bylaws.
(xx) The Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto (including any term sheet within
the meaning of Rule 434 of the Rules and Regulations), comply as to form in
all material respects with the requirements of the Act and the Rules and
Regulations; and on the basis of conferences with officers of the Company,
examination of documents referred to in the Registration Statement and
Prospectus and such other procedures as such counsel deemed appropriate,
nothing has come to the attention of such counsel that causes such counsel
to believe that the Registration Statement or any amendment thereof, at the
time such Registration Statement became effective and as of the Closing
Date (including any Registration Statement filed under Rule 462(b) of the
Rules and Regulations), contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (as of their respective dates and as of the Closing Date), as
amended or supplemented, includes any untrue statement of material fact or
omits to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; it
being understood that such counsel need express no opinion as to the
financial statements or other financial data included in any of the
documents mentioned in this clause.
(xxi) Such other matters as you may reasonably request.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Minnesota and federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that such opinion or opinions of local counsel
are satisfactory to them and that they believe they and you are justified in
relying thereon and (ii) as to matters of fact, to the extent such counsel deems
reasonable upon certificates of officers of the Company
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and its subsidiaries and of public officials provided that the extent of such
reliance is specified in such opinion.
(e) The favorable opinion, dated as of Closing Date, of Richards,
Layton & Finger, counsel to Wilmington Trust Company, as Property Trustee under
the Trust Agreement, Indenture Trustee under the Indenture, and Guarantee
Trustee under the Guarantee Agreement, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) Wilmington Trust Company is duly incorporated and is validly
existing in good standing as a banking corporation under the laws of the
State of Delaware.
(ii) Wilmington Trust Company has the power and authority to
execute, deliver and perform its obligations under the Trust Agreement, the
Indenture and the Guarantee Agreement.
(iii) Each of the Trust Agreement, the Indenture and the
Guarantee Agreement have been duly authorized, executed and delivered by
Wilmington Trust Company and constitutes a legal, valid and binding
obligation of Wilmington Trust Company, enforceable against Wilmington
Trust Company, in accordance with its terms.
(iv) The execution, delivery and performance by Wilmington Trust
Company of the Trust Agreement, the Indenture and the Guarantee Agreement
do not conflict with or constitute a breach of the charter or by-laws of
Wilmington Trust Company.
(v) No consent, approval or authorization of, or registration
with or notice to, any governmental authority or agency of the State of
Delaware or the United States of America governing the banking or trust
powers of Wilmington Trust Company is required for the execution, delivery
or performance by the Wilmington Trust Company of the Trust Agreement, the
Indenture and the Guarantee Agreement.
(f) The favorable opinion, dated as of Closing Date, of Richards,
Layton & Finger, as special Delaware counsel for the Offerors, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act, and all filings
required as of the date hereof under the Delaware Act with respect to the
creation and valid existence of the Trust as a business trust have been
made.
(ii) Under the Trust Agreement and the Delaware Act, the Trust
has the trust power and authority to own property and to conduct its
business, all as described in the Prospectus.
(iii) The Trust Agreement constitutes a valid and binding
obligation of the Company and each of the Property Trustee and the
Administrative Trustees, and is enforceable against the Company and each of
the Property Trustee and the Administrative Trustees, in accordance with
its terms.
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(iv) Under the Trust Agreement and the Delaware Act, the Trust
has the trust power and authority (i) to execute and deliver, and to
perform its obligations under, this Agreement, and (ii) to issue, and to
perform its obligations under, the Capital Securities and the Common
Securities.
(v) Under the Trust Agreement and the Delaware Act, the
execution and delivery by the Trust of this Agreement, and the performance
by the Trust of its obligations under this Agreement, have been duly
authorized by all necessary trust action on the part of the Trust.
(vi) Under the Delaware Act, the certificate attached to the
Trust Agreement as Exhibit E is an appropriate form of certificate to
evidence ownership of the Capital Securities. The Capital Securities and
the Common Securities have been duly authorized by the Trust Agreement and
are duly and validly issued and, subject to the qualifications hereinafter
expressed in this paragraph (vi), fully paid and non-assessable undivided
beneficial interests in the assets of the Trust. The respective holders of
the Capital Securities and the Common Securities, as beneficial owners of
the Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware. We note that the
respective holders of the Capital Securities and the Common Securities may
be obligated, pursuant to the Trust Agreement, to make certain payments
under the Trust Agreement.
(vii) Under the Trust Agreement and the Delaware Act, the
issuance of the Capital Securities and the Common Securities is not subject
to preemptive or similar rights.
(viii) The issuance and sale by the Trust of the Capital
Securities and the Common Securities, the purchase by the Trust of the
Junior Subordinated Debentures, the execution, delivery and performance by
the Trust of this Agreement and the Guarantee Agreement, the consummation
by the Trust of the transactions contemplated by this Agreement and
compliance by the Trust with its obligations under this Agreement do not
violate (a) any of the provisions of the Certificate of Trust or the Trust
Agreement, or (b) any applicable Delaware law or Delaware administrative
regulation.
(g) On the Closing Date, there shall have been furnished such opinion
or opinions from Faegre & Benson LLP, counsel for the Underwriters, dated the
Closing Date and addressed to the Underwriters, with respect to the formation of
the Company, the validity of the Capital Securities, the Indenture, the
Guarantee Agreement, this Agreement, the Registration Statement, the Prospectus
and other related matters as the Underwriters reasonably may request, and such
counsel shall have received such papers and information as they request to
enable them to pass upon such matters.
(h) On the Closing Date you shall have received a letter from Ernst &
Young, dated the Closing Date and addressed to the Underwriters, confirming that
they are independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualifications of
accountants under Rule 2-01 of Regulation S-X of the Commission, that the Trust
is and will be treated as a consolidated Subsidiary of the Company pursuant to
generally accepted accounting principals, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of such
letter), the conclusions and findings of each said firm with respect to the
financial information and other matters covered by its letter delivered to
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the Underwriters concurrently with the execution of this Agreement, and the
effect of the letter so to be delivered on the Closing Date shall be to confirm
the conclusions and findings set forth in such prior letter.
(i) On the Closing Date, there shall have been furnished to you, a
certificate, dated the Closing Date and addressed to you, signed by the chief
executive officer and by the chief financial officer of the Company, to the
effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made at and
as of the Closing Date, and the Offerors have complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) No stop order or other order suspending the effectiveness of
the Registration Statement or any amendment thereof or the qualification of
the Capital Securities for offering or sale has been issued, and no
proceeding for that purpose has been instituted or, to the best of their
knowledge, is contemplated by the Commission or any state or regulatory
body; and
(iii) The signers of said certificate have carefully examined
the Registration Statement and the Prospectus, and any amendments thereof
or supplements thereto (including any term sheet within the meaning of Rule
434 of the Rules and Regulations), and (A) such documents contain all
statements and information required to be included therein, the
Registration Statement, or any amendment thereof, does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and the Prospectus, as amended or supplemented, does not
include any untrue statement of material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) since the
effective date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented prospectus which has
not been so set forth, (C) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Trust, the Company nor any of its Subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into
any material transactions, not in the ordinary course of business, or
declared or paid any dividends or made any distribution of any kind with
respect to its capital stock, and except as disclosed in the Prospectus,
there has not been any change in the capital stock (other than a change in
the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants, or any
material change in the short-term or long-term debt, or any issuance of
options, warrants, convertible securities or other rights to purchase the
capital stock, of the Company, or any of its Subsidiaries, or any material
adverse change or any development involving a prospective material adverse
change (whether or not arising in the ordinary course of business), in the
general affairs, condition (financial or otherwise), business, key
personnel, property, prospects, net worth or results of operations of the
Trust or the Company and its Subsidiaries, taken as a whole, and (D) except
as stated in the Registration Statement and the Prospectus, there is not
pending, or, to the knowledge of the Company or the Trust, threatened or
contemplated, any action, suit or proceeding to which the Trust, the
Company or any of its Subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might
result in any material adverse change in the condition (financial or
otherwise), business, prospects or results of operations of the Company and
its subsidiaries, taken as a whole.
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(j) On the Closing Date, there shall have been furnished to the
Underwriters, a certificate, dated the Closing Date and addressed to the
Underwriters, signed by the Administrative Trustees, to the effect that:
(i) The representations and warranties of the Trust in this
Agreement are true and correct, in all material respects, as if made at and
as of the Closing Date, and the Trust has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) No stop order or other order suspending the effectiveness of
the Registration Statement or any amendment thereof or the qualification of
the Capital Securities for offering or sale has been issued, and no
proceeding for that purpose has been instituted or, to the best of their
knowledge, is contemplated by the Commission or any state or regulatory
body; and
(iii) The signers of said certificate have carefully examined
the Registration Statement and the Prospectus, and any amendments thereof
or supplements thereto (including any term sheet within the meaning of Rule
434 of the Rules and Regulations), and (a) such documents contain all
statements and information required to be included therein, the
Registration Statement, or any amendment thereof, does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and the Prospectus, as amended or supplemented, does not
include any untrue statement of material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) since the
effective date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented prospectus which has
not been so set forth, (C) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, the
Trust has not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, not in the ordinary
course of business, or declared or paid any dividends or made any
distribution of any kind with respect to its capital securities, and except
as disclosed in the Prospectus, there has not been any change in the
capital securities, or any material change in the short-term or long-term
debt, or any issuance of options, warrants, convertible securities or other
rights to purchase the capital securities, of the Trust or any material
adverse change or any development involving a prospective material adverse
change (whether or not arising in the ordinary course of business), in the
general affairs, condition (financial or otherwise), business, key
personnel, property, prospects, net worth or results of operations of the
Trust, and (D) except as stated in the Registration Statement and the
Prospectus, there is not pending, or, to the knowledge of the Trust,
threatened or contemplated, any action, suit or proceeding to which the
Trust is a party before or by any court or governmental agency, authority
or body, or any arbitrator, which might result in any material adverse
change in the condition (financial or otherwise), business, prospects or
results of operations of the Trust.
(k) The Company shall have furnished to you and to your counsel such
additional documents, certificates and evidence as you or they may have
reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
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6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Offerors agree to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which you may become subject, under the Act or otherwise (including
in settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness pursuant to Rules 430A and
434(d) of the Rules and Regulations, if applicable, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action; provided, however, that the
Offerors shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Offerors by the Underwriters specifically for use
in the preparation thereof.
In addition to its other obligations under this Section 6(a), each of
the Company and the Trust agree that, as an interim measure during the pendency
of any claim, action, investigation, inquiry or other proceeding arising out of
or based upon any statement or omission, or any alleged statement or omission,
described in this Section 6(a), it will reimburse you on a monthly basis for all
reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Offerors' obligation to reimburse you
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, you shall
promptly return it to the party or parties that made such payment, together with
interest, compounded daily, determined on the basis of the prime rate (or other
commercial lending rate for borrowers of the highest credit standing) announced
from time to time by Norwest Bank Minnesota, N.A. (the "Prime Rate"). Any such
interim reimbursement payments which are not made to you within 30 days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request. This indemnity agreement shall be in addition to any liabilities
which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company and
the Trust against any losses, claims, damages or liabilities to which the
Company and the Trust may become subject, under the Act or otherwise (including
in settlement of any litigation, if such settlement is effected with your
written consent), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by you
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for use in the preparation thereof, and will reimburse the Company and the Trust
for any legal or other expenses reasonably incurred by the Company and the Trust
in connection with investigating or defending against any such loss, claim,
damage, liability or action.
(c) The Company agrees to indemnify the Trust against all loss,
liability, claim damage and expense whatsoever, which may become due from the
Trust under subsection (a) or (b).
(d) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party. In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that if, in the sole judgment of the Underwriters, it is advisable for the
underwriters as a group to be represented by separate counsel, the Underwriters
shall have the right to employ a single counsel to represent all Underwriters
who may be subject to a liability arising from any claim in respect of which
indemnity may be sought by the Underwriters under this Section 6, in which
event the reasonable fees and expenses of such separate counsel shall be borne
by the indemnifying party or parties and remitted to the Underwriters for
payment to such counsel as such fees and expenses are incurred (in accordance
with the provisions of the second paragraph in subsection (a) above). An
indemnifying party shall not be obligated under any settlement agreement
relating to any action under this Section 6 to which it has not agreed in
writing.
(e) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above,
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company or the Trust on the one hand and the Underwriters on the
other from the offering of the Capital Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the Trust
on the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Trust on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Trust or the Underwriter's and the parties'
relevant intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Trust and you
agree that it would not be just and equitable if contributions pursuant to this
subsection (e) were to be determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
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considerations referred to in the first sentence of this subsection (e). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (e) no
Underwriter shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
against any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Capital Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters obligations in this Section (e)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company and the Trust may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls the Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 6 shall be in addition to any liability that
the respective Underwriter may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company (including any person who,
with his or her consent, is named in the Registration Statement as about to
become a director of the Company), to each officer of the Company who has signed
the Registration Statement and to each person, if any, who controls the Company
or the Trust within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Offerors herein or in
certificates delivered pursuant hereto, and the agreements of the Offerors and
you contained in Section 6 hereof shall remain operative and in full force and
effect regardless of any investigation made by you or on your behalf or any
controlling person thereof, or the Company or any of its officers, directors, or
controlling persons or the Trust or any if its trustees, or controlling persons
and shall survive delivery of, and payment for, the Capital Securities to and by
the Underwriters hereunder.
8. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m., Central
time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of the
Registration Statement as the Underwriters in their discretion shall first
release the Capital Securities for sale to the public; provided, that if the
Registration Statement is effective at the time this Agreement is executed, this
Agreement shall become effective at such time as the Underwriters in their
discretion shall first release the Capital Securities for sale to the public.
For the purpose of this Section, the Capital Securities shall be deemed to have
been released for sale to the public upon release by you of the publication of a
newspaper advertisement relating thereto or upon release by the Underwriters of
telexes offering the Capital Securities for sale to Capital Securities dealers,
whichever shall first occur. By giving notice as hereinafter specified before
the time this Agreement becomes effective, the Underwriters, the Trust or the
Company may prevent this Agreement from becoming effective without liability of
any party to any other party, except that the provisions of Section 4(a)(viii)
and Section 6 hereof shall at all times be effective.
(b) The Underwriters shall have the right to terminate this Agreement
by giving notice as hereinafter specified at any time at or prior to the Closing
Date, if (i) either Offeror shall have failed, refused or been unable, at or
prior to the Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any other condition of your obligations hereunder is not
fulfilled, (iii) trading in securities on the New York Stock Exchange or the
Nasdaq Stock Market shall have been suspended or
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limited or minimum prices shall have been established on such Exchange or
System, (iv) a banking moratorium shall have been declared by Federal, New York,
North Dakota, South Dakota or Colorado authorities, or (v) there has occurred
any material adverse change in the financial markets in the United States or an
outbreak of major hostilities (or an escalation thereof) in which the United
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in
your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Capital Securities. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 4(a)(viii) and Section 6 hereof shall at all
times be effective.
(c) If the Underwriters elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section, the
Company shall be notified promptly by the Underwriters by telephone or telegram,
confirmed by letter. If the Trust or the Company elects to prevent this
Agreement from becoming effective, the Underwriters shall be notified by the
Trust or the Company by telephone or telegram, confirmed by letter.
9. DEFAULT BY THE COMPANY. If the Trust shall fail at the Closing Date
to sell and deliver the number of Capital Securities which it is obligated to
sell hereunder or the Company fails to deliver the number of Junior Subordinated
Debentures required to be delivered pursuant to the Trust Agreement, then this
Agreement shall terminate without any liability on the part of any
non-defaulting party. No action taken pursuant to this Section shall relieve
the Trust or the Company so defaulting from liability, if any, in respect of
such default.
10. INFORMATION FURNISHED BY UNDERWRITER. The statements set forth in the
last paragraph of the cover page and under the caption "Underwriting" in any
Preliminary Prospectus and in the Prospectus constitute the written information
furnished by the Underwriters or on their behalf referred to in Section 2 and
Section 6 hereof.
11. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to you, shall be mailed,
telegraphed or delivered to Piper Jaffray Inc., Piper Jaffray Tower, 222 South
Ninth Street, Minneapolis, Minnesota 55402; if to the Company, shall be mailed,
telegraphed or delivered to it at 1112 Nodack Drive, Fargo, North Dakota 58013,
Attention: Donald R. Mengedoth if to the Trust, shall be mailed lithographed or
delivered to it at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attention: Corporate Trust Administration. All notices
given by telegram shall be promptly confirmed by letter. Any notice to the Trust
shall also be copied to the Company at the address previously stated, Attention:
Donald R. Mengedoth. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Capital Securities from
any of the Underwriters.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
-24-
<PAGE>
[Signature Page Follows]
-25-
<PAGE>
SCHEDULE I
Underwriter Capital Securities
- ----------- ------------------
Piper Jaffray Inc. $
Dain Bosworth Incorporated $___________
Total $
--------------
--------------
-26-
<PAGE>
EXHIBIT A
COMMUNITY FIRST BANKSHARES, INC.
SUBSIDIARIES
Ownership
Subsidiary Bank: Location Percentage
- ---------------- -------- ----------
Community First National Bank Worthington, MN 99.072%
Community First National Bank Little Falls, MN 98.712%
Community First National Bank Fergus Falls, MN 99.327%
Community First National Bank Fargo, ND 99.431%
Community First National Bank Dickinson, ND 100.000%
Community First State Bank Vermillion, SD 98.923%
Community First State Bank Redfield, SD 99.641%
Community First State Bank Decorah, IA 99.880%
Community First State Bank Alliance, NE 99.537%
Community First State Bank Spooner, WI 99.493%
Colorado Community First National Bank Ft. Morgan, CO 100.000%
Colorado Community First State Bank Steamboat, CO 99.471%
Colorado Community First National Bank Trinidad, CO 100.000%
Colorado Community First State Bank - CO Denver, CO 100.000%
Nonbank Subsidiaries:
- ---------------------
Community First Financial, Inc. Fargo, ND 100.000%
Community First Service Corporation Fargo, ND 100.000%
Community Insurance, Inc. Fargo, ND 100.000%
Community First Properties, Inc. Fargo, ND 100.000%
Recently Acquired Subsidiaries to Merged Dissolved/Merged:
- ----------------------------------------------------------
Mountain Parks Data Corporation 100.000%
Mountain Parks Financial Consulting Corp. 100.000%
Other Affiliates:
- -----------------
Vail Banks Inc. Vail, CO 24.690%
Subsidiaries of Subsidiaries (100% Owned):
- ------------------------------------------
Community First Insurance Agencies, Inc. Vermillion, SD (Subsidiary of
Community First State
Bank [Vermillion, SD])
CFIN, Inc. Las Vegas, NV (Subsidiary of
Community First State
Bank [Spooner])
-27-
<PAGE>
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the Company
and you in accordance with its terms.
Very truly yours,
COMMUNITY FIRST BANKSHARES, INC.
By
-----------------------------------------
Its
-------------------------------------
CFB CAPITAL I
By
-----------------------------------------
Its
-------------------------------------
Confirmed as of the date first
above mentioned.
PIPER JAFFRAY INC.
By
--------------------------
Managing Director
DAIN BOSWORTH INCORPORATED
By
---------------------------
Managing Director
-28-
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
COMMUNITY FIRST BANKSHARES, INC.,
AS ISSUER
TO
WILMINGTON TRUST COMPANY,
AS TRUSTEE
-------------------------------
SUBORDINATED INDENTURE
-------------------------------
Dated as of _____________, 1997
____% Junior Subordinated Debentures
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND EXCHANGE OF THE JUNIOR
SUBORDINATED DEBENTURES . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Designation and Principal Amount . . . . . . . . . . . . . . . 7
2.2 Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Form and Payment . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Global Subordinated Debenture. . . . . . . . . . . . . . . . . 8
2.5 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 Execution, Authentication, Delivery and Dating . . . . . . . .10
2.7 Registration and Transfer. . . . . . . . . . . . . . . . . . .10
2.8 Mutilated, Destroyed, Lost and Stolen Junior Subordinated
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE III
REDEMPTION OF JUNIOR SUBORDINATED DEBENTURES . . . . . . . . . . . . . .11
3.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . .11
3.2 Special Event Redemption . . . . . . . . . . . . . . . . . . .11
3.3 Optional Redemption by Company . . . . . . . . . . . . . . . .12
3.4 Notice of Redemption . . . . . . . . . . . . . . . . . . . . .12
3.5 Payment upon Redemption. . . . . . . . . . . . . . . . . . . .13
3.6 No Sinking Fund. . . . . . . . . . . . . . . . . . . . . . . .14
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD . . . . . . . . . . . . . . . . . .14
4.1 Extension of Interest Payment Period . . . . . . . . . . . . .14
4.2 Notice of Extension. . . . . . . . . . . . . . . . . . . . . .14
4.3 Limitation of Transactions During Extension. . . . . . . . . .15
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY. . . . . . . . . . . . . . . . . . .15
5.1 Payment of Principal and Interest. . . . . . . . . . . . . . .15
5.2 Maintenance of Agency. . . . . . . . . . . . . . . . . . . . .15
5.3 Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . .15
5.4 Appointment to Fill Vacancy in Office of Trustee . . . . . . .16
5.5 Compliance with Consolidation Provisions . . . . . . . . . . .16
5.6 Restrictions on Certain Payments . . . . . . . . . . . . . . .16
5.7 Covenants as to the Trust. . . . . . . . . . . . . . . . . . .16
ARTICLE VI
SECURITYHOLDERS' LISTS AND REPORTS . . . . . . . . . . . . . . . . . . .17
6.1 Company to Furnish Trustee Names and Addresses of
Securityholders. . . . . . . . . . . . . . . . . . . . . . . .17
6.2 Preservation of Information; Communications with
Securityholders. . . . . . . . . . . . . . . . . . . . . . . .17
6.3 Reports by the Company . . . . . . . . . . . . . . . . . . . .17
6.4 Reports by the Trustee . . . . . . . . . . . . . . . . . . . .18
i
<PAGE>
ARTICLE VII
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT. . . . .18
7.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . .18
7.2 Collection of Indebtedness and Suits for Enforcement by
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
7.3 Application of Moneys Collected. . . . . . . . . . . . . . . .21
7.4 Limitation on Suits. . . . . . . . . . . . . . . . . . . . . .21
7.5 Rights and Remedies Cumulative; Delay or Omission Not Waiver .22
7.6 Control by Securityholders . . . . . . . . . . . . . . . . . .22
7.7 Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . .23
ARTICLE VIII
FORM OF JUNIOR SUBORDINATED DEBENTURE AND ORIGINAL ISSUE . . . . . . . .23
8.1 Form of Junior Subordinated Debenture. . . . . . . . . . . . .23
8.2 Original Issue of Junior Subordinated Debentures . . . . . . .23
ARTICLE IX
CONCERNING THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . .23
9.1 Certain Duties and Responsibilities of the Trustee . . . . . .23
9.2 Certain Rights of Trustee. . . . . . . . . . . . . . . . . . .24
9.3 Trustee Not Responsible for Recitals or Issuance of the Junior
Subordinated Debentures. . . . . . . . . . . . . . . . . . . .25
9.4 May Hold Junior Subordinated Debentures. . . . . . . . . . . .25
9.5 Moneys Held in Trust . . . . . . . . . . . . . . . . . . . . .25
9.6 Compensation and Reimbursement . . . . . . . . . . . . . . . .25
9.7 Reliance on Officers' Certificate. . . . . . . . . . . . . . .26
9.8 Disqualification; Conflicting Interests . . . . . . . . . . .26
9.9 Corporate Trustee Required; Eligibility. . . . . . . . . . . .26
9.10 Resignation and Removal; Appointment of Successor. . . . . . .26
9.11 Acceptance of Appointment by Successor . . . . . . . . . . . .27
9.12 Merger, Conversion, Consolidation or Succession to Business. .28
9.13 Preferential Collection of Claims Against the Company. . . . .28
9.14 Appointment of Authenticating Agent. . . . . . . . . . . . . .28
ARTICLE X
CONCERNING THE SECURITYHOLDERS . . . . . . . . . . . . . . . . . . . . .29
10.1 Evidence of Action by Securityholders. . . . . . . . . . . . .29
10.2 Proof of Execution by Securityholders. . . . . . . . . . . . .30
10.3 Who May Be Deemed Owners . . . . . . . . . . . . . . . . . . .30
10.4 Certain Junior Subordinated Debentures Owned by Company
Disregarded. . . . . . . . . . . . . . . . . . . . . . . . . .30
10.5 Actions Binding on Future Securityholders. . . . . . . . . . .31
ARTICLE XI
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . . . . .31
11.1 Supplemental Indentures Without the Consent of
Securityholders. . . . . . . . . . . . . . . . . . . . . . . .31
11.2 Supplemental Indentures with Consent of Securityholders. . . .32
11.3 Effect of Supplemental Indentures. . . . . . . . . . . . . . .32
11.4 Junior Subordinated Debentures Affected by Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . .32
11.5 Execution of Supplemental Indentures . . . . . . . . . . . . .32
ii
<PAGE>
ARTICLE XII
SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . .33
12.1 Company May Consolidate, Etc.. . . . . . . . . . . . . . . . .33
12.2 Successor Substituted. . . . . . . . . . . . . . . . . . . . .33
12.3 Evidence of Consolidation, Etc., to Trustee. . . . . . . . . .33
ARTICLE XIII
SATISFACTION AND DISCHARGE. . . . . . . . . . . . . . . . . . . . . . . .33
13.1 Satisfaction and Discharge of Indenture. . . . . . . . . . . .34
13.2 Discharge of Obligations . . . . . . . . . . . . . . . . . . .34
13.3 Deposited Moneys to Be Held in Trust . . . . . . . . . . . . .34
13.4 Payment of Monies Held by Paying Agents. . . . . . . . . . . .34
13.5 Repayment to Company . . . . . . . . . . . . . . . . . . . . .34
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS . . . . .35
14.1 No Recourse. . . . . . . . . . . . . . . . . . . . . . . . . .35
ARTICLE XV
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .35
15.1 Effect on Successors and Assigns . . . . . . . . . . . . . . .35
15.2 Actions by Successor . . . . . . . . . . . . . . . . . . . . .35
15.3 Surrender of Company Powers. . . . . . . . . . . . . . . . . .35
15.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .35
15.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . .36
15.6 Treatment of Junior Subordinated Debentures as Debt. . . . . .36
15.7 Compliance Certificates and Opinions . . . . . . . . . . . . .36
15.8 Payments on Business Days. . . . . . . . . . . . . . . . . . .36
15.9 Conflict with Trust Indenture Act. . . . . . . . . . . . . . .36
15.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . .36
15.11 Separability . . . . . . . . . . . . . . . . . . . . . . . . .36
15.12 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . .37
15.13 Acknowledgment of Rights . . . . . . . . . . . . . . . . . . .37
ARTICLE XVI
SUBORDINATION OF JUNIOR SUBORDINATED DEBENTURES . . . . . . . . . . . . .37
16.1 Agreement to Subordinate . . . . . . . . . . . . . . . . . . .37
16.2 Default on Senior and Subordinated Debt. . . . . . . . . . . .37
16.3 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . .38
16.4 Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . .39
16.5 Trustee to Effectuate Subordination. . . . . . . . . . . . . .39
16.6 Notice by the Company. . . . . . . . . . . . . . . . . . . . .39
16.7 Rights of the Trustee; Holders of Senior and Subordinated
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
16.8 Subordination May Not Be Impaired. . . . . . . . . . . . . . .40
iii
<PAGE>
COMMUNITY FIRST BANKSHARES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, AS AMENDED
AND SUBORDINATED INDENTURE, DATED AS OF __________, 1997
Trust Indenture Act Subordinated
Section Indenture Section
- ------------------- -----------------
Section 310. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9
Section 310 (b). . . . . . . . . . . . . . . . . . . . . . . . . . 9.8
Section 311. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9
Section 311 (a). . . . . . . . . . . . . . . . . . . . . . . . . . 9.13
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 9.13
Section 312. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9
Section 312 (b). . . . . . . . . . . . . . . . . . . . . . . . . . 6.2
Section 313. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9
Section 313 (a). . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
Section 314. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9
Section 315. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9
Section 316. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9
Section 317. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9
- -----------------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Subordinated Indenture.
i
<PAGE>
SUBORDINATED INDENTURE (the "Indenture"), dated as of ___________, 1997,
among Community First Bankshares, Inc., a Delaware corporation (the
"Company") and Wilmington Trust Company, a Delaware banking corporation, as
trustee (the "Trustee");
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of its securities to be known as its _____ % Junior Subordinated
Debentures due 2027 (hereinafter referred to as the "Junior Subordinated
Debentures"), the form and substance of such Junior Subordinated Debentures
and the terms, provisions and conditions thereof to be set forth as provided
in this Indenture; and
WHEREAS, CFB Capital I, a Delaware statutory business trust (the
"Trust"), has offered to the public $____________ aggregate liquidation
amount of its ___% Cumulative Capital Securities (the "Capital Securities"),
representing undivided beneficial interests in the assets of the Trust and
proposes to invest the proceeds from such offering, together with the
proceeds of the issuance and sale by the Trust to the Company of $___ million
aggregate liquidation amount of its ___% Trust Common Securities, in $____
million aggregate principal amount of the Junior Subordinated Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this Indenture and all requirements necessary to make this Indenture a valid
instrument in accordance with its terms, and to make the Junior Subordinated
Debentures, when executed by the Company and authenticated and delivered by
the Trustee, the valid obligations of the Company; and
WHEREAS, to provide the terms and conditions upon which the Junior
Subordinated Debentures are to be authenticated, issued and delivered, the
Company has duly authorized the execution and delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of the
Junior Subordinated Debentures by the holders thereof, it is mutually
covenanted and agreed as follows for the equal and ratable benefit of the
holders of Junior Subordinated Debentures:
ARTICLE I
---------
DEFINITIONS
The terms defined in this Section (except as in this Indenture otherwise
expressly provided or unless the context otherwise requires) for all purposes
of this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section and shall include the plural as
well as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act of 1939, as amended, or that are by
reference in said Trust Indenture Act defined in the Securities Act of 1933,
as amended (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meanings assigned to such terms
in said Trust Indenture Act and in said Securities Act as in force at the
date of the execution of this Indenture.
"Accelerated Maturity Date" means, if the Company elects to accelerate
the Maturity Date in accordance with Section 2.2(c), the date selected by the
Company which is prior to the Scheduled Maturity Date, but is after
____________, 2002.
1
<PAGE>
"Administrative Trustees" has the meaning set forth in the Trust
Agreement.
"Additional Sums" shall have the meaning set forth in Section 2.5.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10%
or more of the outstanding voting securities or other ownership interests of
the specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control
with the specified Person, (d) a partnership in which the specified Person is
a general partner, (e) any officer or director of the specified Person, and
(f) if the specified Person is an individual, any entity of which the
specified Person is an officer, director or general partner.
"Authenticating Agent" means an authenticating agent with respect to the
Junior Subordinated Debentures appointed by the Trustee pursuant to Section
9.14.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of such Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification.
"Business Day" means any day other than a day on which Federal or State
banking institutions in the State of Minnesota are authorized or obligated by
law, executive order or regulation to close or a day on which the Trustee is
closed.
"Capital Securities" means undivided beneficial interests in the assets
of the Trust which rank pari passu with Common Securities issued by the
Trust; provided, however, that upon the occurrence of an Event of Default,
the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Capital Securities.
"Capital Securities Certificate" has the meaning set forth in the Trust
Agreement.
"Capital Securities Guarantee" means any guarantee that the Company may
enter into with the Property Trustee or other Persons that operates directly
or indirectly for the benefit of holders of Capital Securities of the Trust.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer or the principal accounting officer
of the Company. The Certificate need not comply with the provisions of
Section 15.7.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
2
<PAGE>
"Common Securities" means undivided beneficial interests in the assets of
the Trust which rank pari passu with Capital Securities issued by the Trust;
provided, however, that upon the occurrence of an Event of Default, the
rights of holders of Common Securities to payment in respect of distributions
and payments upon liquidation, redemption and otherwise are subordinated to
the rights of holders of Capital Securities.
"Company" means Community First Bankshares, Inc., a corporation duly
organized and existing under the laws of the State of Delaware, and, subject
to the provisions of Article Twelve, shall also include its successors and
assigns.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration.
"Custodian" means any receiver, trustee, assignee, liquidator, or similar
official under any Bankruptcy Law.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of
property, assets or businesses; (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person; (iv) every obligation of
such Person issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business); (v) every capital lease obligation of
such Person; and (vi) every obligation of the type referred to in clauses (i)
through (v) of another Person and all dividends of another Person the payment
of which, in either case, such Person has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Depositary" means, with respect to Junior Subordinated Debentures issued
as a Global Subordinated Debenture, The Depository Trust Company, New York,
New York, another clearing agency, or any successor registered as a clearing
agency under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or other applicable statute or regulation, which, in each case, shall
be designated by the Company pursuant to either Section 2.1 or 2.4.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance
with the Trust Agreement and the Junior Subordinated Debentures held by the
Property Trustee are to be distributed to the holders of the Trust Securities
issued by the Trust pro rata in accordance with the Trust Agreement.
"Distributions" shall have the meaning set forth in the Trust Agreement.
"Event of Default" means any event specified in Section 7.1, continued
for the period of time, if any, therein designated.
3
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extended Interest Payment Period" shall have the meaning set forth in
Section ___.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Global Subordinated Debenture" means a Junior Subordinated Debenture
executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with this
Indenture, which shall be registered in the name of the Depositary or its
nominee.
"Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America that, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any such Governmental Obligation or a specific payment of
principal of or interest on any such Governmental Obligation held by such
custodian for the account of the holder of such depositary receipt; provided,
however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the
Governmental Obligation or the specific payment of principal of or interest
on the Governmental Obligation evidenced by such depositary receipt.
"Herein," "hereof," and "hereunder," and other words of similar import,
refer to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.
"Interest Payment Date," when used with respect to any installment of
interest on the Junior Subordinated Debentures, means the date specified in
the Junior Subordinated Debenture as the fixed date on which an installment
of interest with respect to the Junior Subordinated Debentures is due and
payable.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Company Event" means the receipt by the Company and the Trust
of an Opinion of Counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in Investment
Company Act Law"), the Trust is or will be considered an "investment company"
that is required to be registered under the Investment Company Act, which
Change in Investment Company Act Law becomes effective on or after the date
of original issuance of the Capital Securities under the Trust Agreement.
"Junior Subordinated Debentures" means the ___% Junior Subordinated
Debentures authenticated and delivered under this Indenture.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Maturity Date" shall have the meaning set forth in Section 2.2.
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"Non Book-Entry Capital Securities" shall have the meaning set forth in
Section 2.4.
"Officers' Certificate" means a certificate signed by the President or a
Vice President and by the Chief Financial Officer or the Controller or an
Assistant Controller or the Secretary or an Assistant Secretary of the
Company that is delivered to the Trustee in accordance with the terms hereof.
Each such certificate shall include the statements provided for in Section
15.7, if and to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing of legal counsel, who
may be an employee of or counsel for the Company, that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include
the statements provided for in Section 15.7, if and to the extent required by
the provisions thereof.
"Outstanding," when used with reference to Junior Subordinated Debentures
means, subject to the provisions of Section 10.4, as of any particular time,
all Junior Subordinated Debentures theretofore authenticated and delivered by
the Trustee under this Indenture, except (a) Junior Subordinated Debentures
theretofore canceled by the Trustee or any paying agent, or delivered to the
Trustee or any paying agent for cancellation or that have previously been
canceled; (b) Junior Subordinated Debentures or portions thereof for the
payment or redemption of which moneys or Governmental Obligations in the
necessary amount shall have been deposited in trust with the Trustee or with
any paying agent (other than the Company) or shall have been set aside and
segregated in trust by the Company (if the Company shall act as its own
paying agent); provided, however, that if such Junior Subordinated Debentures
or portions of such Junior Subordinated Debentures are to be redeemed prior
to the maturity thereof, notice of such redemption shall have been given as
in Article Three provided, or provision satisfactory to the Trustee shall
have been made for giving such notice; and (c) Junior Subordinated Debentures
in lieu of or in substitution for which other Junior Subordinated Debentures
shall have been authenticated and delivered pursuant to the terms of Section
2.8.
"Person" means any individual, corporation, partnership, joint venture,
joint-stock company, unincorporated organization or government or any agency
or political subdivision thereof.
"Predecessor Security" means every previous Junior Subordinated Debenture
evidencing all or a portion of the same debt and as that evidenced by such
particular Junior Subordinated Debenture; and, for the purposes of this
definition, any Junior Subordinated Debenture authenticated and delivered
under Section 2.8 in lieu of a lost, destroyed or stolen Junior Subordinated
Debenture shall be deemed to evidence the same debt as the lost, destroyed or
stolen Junior Subordinated Debenture.
"Property Trustee" has the meaning set forth in the Trust Agreement.
"Redemption Price" means the amount equal to 100% of the principal amount
of Junior Subordinated Debentures to be redeemed plus any accrued and unpaid
interest thereon to the date of the redemption of such Junior Subordinated
Debentures.
"Responsible Officer" when used with respect to the Trustee means the
Chairman of the Board of Directors, the President, any Vice President, the
Secretary, the Treasurer, any trust officer, any corporate trust officer or
any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the
particular subject.
"Scheduled Maturity Date" means __________, 2027.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 2.7.
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"Securityholder," "Holder," "Holder of Securities," "Registered Holder,"
or other similar term, means the Person or Persons in whose name or names a
particular Junior Subordinated Debenture shall be registered in the
Securities Register.
"Senior and Subordinated Debt" means the principal of (and premium, if
any) and interest, if any (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to the Company
whether or not such claim for post-petition interest is allowed in such
proceeding), on Debt, whether incurred on or prior to the date of this
Indenture or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are not superior in right of payment to the
Junior Subordinated Debentures or to other Debt which is pari passu with, or
subordinated to, the Junior Subordinated Debentures; provided, however, that
Senior and Subordinated Debt shall not be deemed to include (i) any Debt of
the Company which when incurred and without respect to any election under
section 1111(b) of the United States Bankruptcy Code of 1978, as amended, was
without recourse to the Company, (ii) any Debt of the Company to any of its
subsidiaries, (iii) any Debt to any employee of the Company, (iv) any Debt
which by its terms is subordinated to trade accounts payable or accrued
liabilities arising in the ordinary course of business to the extent that
payments made to the holders of such Debt by the holders of the Junior
Subordinated Debentures as a result of the subordination provisions of this
Indenture would be greater than they otherwise would have been as a result of
any obligation of such holders to pay amounts over to the obligees on such
trade accounts payable or accrued liabilities arising in the ordinary course
of business as a result of subordination provisions to which such Debt is
subject, (v) the Capital Securities Guarantee, and (vi) any other debt
securities issued pursuant to this Indenture.
"Special Event" means a Tax Event or an Investment Company Event.
"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be
owned, directly or indirectly, by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned
by such Person, or by one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries and (iii) any limited partnership of which
such Person or any of its Subsidiaries is a general partner.
"Tax Event" means the receipt by the Company 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
which pronouncement or decision is announced on or after the date of issuance
of the Junior Subordinated Debentures there is more than an insubstantial
risk that (i) interest payable by the Company on the Junior Subordinated
Debentures is not, or within 90 days after the date of such Opinion of
Counsel will not be, deductible by the Company, in whole or in part, for
United States federal income tax purposes; (ii) the Trust is, or will be
within 90 days after the date of such Opinion of Counsel, subject to United
States federal income tax with respect to income received or accrued on the
Junior Subordinated Debentures, or (iii) the Trust is, or will be within 90
days after the date of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties, assessments or other governmental
charges.
"Trust" means CFB Capital I, a Delaware statutory business trust created
for the purpose of issuing Trust Securities in connection with the issuance
of Junior Subordinated Debentures under this Indenture.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
as of ____________, 1997, of the Trust.
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"Trustee" means Wilmington Trust Company and, subject to the provisions
of Article Nine, shall also include its successors and assigns, and, if at
any time there is more than one Person acting in such capacity hereunder,
"Trustee" shall mean each such Person.
"Trust Indenture Act," means the Trust Indenture Act of 1939 as in force
at the date of execution of this Indenture; provided, however, that in the
event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Securities" means Common Securities and Capital Securities of the
Trust.
"Voting Stock," as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
ARTICLE II
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DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND
EXCHANGE OF THE JUNIOR SUBORDINATED DEBENTURES
2.1 DESIGNATION AND PRINCIPAL AMOUNT. There is hereby authorized a
series of Securities designated the "___% Junior Subordinated Debentures due
2027", limited in aggregate principal amount to $____________, which amount
shall be as set forth in any written order of the Company for the
authentication and delivery of Junior Subordinated Debentures pursuant to
Section 8.2 of this Indenture.
2.2 MATURITY.
(a) The Maturity Date will be either:
(i) the Scheduled Maturity Date; or
(ii) if the Company elects to accelerate the Maturity Date to be a
date prior to the Scheduled Maturity Date in accordance with Section 2.2(b),
the Accelerated Maturity Date.
(b) The Company may, at any time before the day which is 90 days before
the Scheduled Maturity Date, elect to shorten the Maturity Date only once to
the Accelerated Maturity Date, provided that the Company has received the
prior approval of the Federal Reserve if then required under applicable
capital guidelines or policies of the Federal Reserve.
(c) If the Company elects to accelerate the Maturity Date in accordance
with Section 2.2(b), the Company shall give notice to the registered holders
of the Junior Subordinated Debentures, the Property Trustee and the Trust of
the acceleration of the Maturity Date and the Accelerated Maturity Date at
least 90 days before the Accelerated Maturity Date.
2.3 FORM AND PAYMENT. Except as provided in Section 2.4, the Junior
Subordinated Debentures shall be issued in fully registered certificated form
without interest coupons. Principal and interest on the Junior Subordinated
Debentures issued in certificated form will be payable, the transfer of such
Junior Subordinated Debentures will be registrable and such Junior
Subordinated Debentures will be exchangeable for Junior Subordinated
Debentures bearing identical terms and provisions at the office or agency of
the Trustee; provided,
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however, that payment of interest may be made at the option of the Company by
check mailed to the Holder at such address as shall appear in the Securities
Register. Notwithstanding the foregoing, so long as the Holder of any Junior
Subordinated Debentures is the Property Trustee, the payment of the principal
of and interest (including Compounded Interest and Additional Sums, if any)
on such Junior Subordinated Debentures held by the Property Trustee will be
made at such place and to such account as may be designated by the Property
Trustee.
2.4 GLOBAL SUBORDINATED DEBENTURE.
(a) In connection with a Dissolution Event,
(i) the Junior Subordinated Debentures in certificated form may be
presented to the Trustee by the Property Trustee in exchange for a global
Junior Subordinated Debenture in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Junior Subordinated
Debentures (a "Global Subordinated Debenture"), to be registered in the
name of the Depositary, or its nominee, and delivered by the Trustee to the
Depositary for crediting to the accounts of its participants pursuant to
the instructions of the Administrative Trustees. The Company upon any such
presentation shall execute a Global Subordinated Debenture in such
aggregate principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with this Indenture. Payments on
the Junior Subordinated Debentures issued as a Global Subordinated
Debenture will be made to the Depositary; and
(ii) if any Capital Securities are held in non book-entry certificated
form, the Junior Subordinated Debentures in certificated form may be
presented to the Trustee by the Property Trustee and any Capital Securities
Certificate which represents Capital Securities other than Capital
Securities held by the Depositary or its nominee ("Non Book-Entry Capital
Securities") will be deemed to represent beneficial interests in Junior
Subordinated Debentures presented to the Trustee by the Property Trustee
having an aggregate principal amount equal to the aggregate Liquidation
Amount of the Non Book-Entry Capital Securities until such Capital
Securities Certificates are presented to the Securities Registrar for
transfer or reissuance at which time such Capital Securities Certificates
will be canceled and a Junior Subordinated Debenture, registered in the
name of the holder of the Capital Securities Certificate or the transferee
of the holder of such Capital Securities Certificate, as the case may be,
with an aggregate principal amount equal to the aggregate Liquidation
Amount of the Capital Securities Certificate canceled, will be executed by
the Company and delivered to the Trustee for authentication and delivery in
accordance with this Indenture. On issue of such Junior Subordinated
Debentures, Junior Subordinated Debentures with an equivalent aggregate
principal amount that were presented by the Property Trustee to the Trustee
will be deemed to have been canceled.
(b) A Global Subordinated Debenture may be transferred, in whole but not
in part, only to another nominee of the Depositary, or to a successor
Depositary selected or approved by the Company or to a nominee of such
successor Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the
Depositary for such series shall no longer be registered or in good standing
under the Exchange Act or other applicable statute or regulation, and a
successor Depositary for such series is not appointed by the Company within
90 days after the Company receives such notice or becomes aware of such
condition, as the case may be, the Company will execute, and the Trustee,
upon written notice from the Company, will authenticate and deliver the
Junior Subordinated Debentures in definitive registered form without coupons,
in authorized denominations, and in an aggregate principal amount equal to
the principal amount of the Global Subordinated Debenture in exchange for
such Global Junior Subordinated Debenture. In addition, the Company
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may at any time determine that the Junior Subordinated Debentures shall no
longer be represented by a Global Subordinated Debenture. In such event the
Company will execute, and the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Company, will authenticate
and deliver the Junior Subordinated Debentures in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Subordinated Debenture in
exchange for such Global Subordinated Debenture. Upon the exchange of the
Global Subordinated Debenture for such Junior Subordinated Debentures in
definitive registered form without coupons, in authorized denominations, the
Global Subordinated Debenture shall be canceled by the Trustee. Such Junior
Subordinated Debentures in definitive registered form issued in exchange for
the Global Subordinated Debenture shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Junior Subordinated Debentures to
the Depositary for delivery to the Persons in whose names such Junior
Subordinated Debentures are so registered.
2.5 INTEREST.
(a) Each Junior Subordinated Debenture will bear interest at the rate of
___% per annum (the "Coupon Rate") from the original date of issuance until
the principal thereof becomes due and payable, and on any overdue principal
and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Coupon Rate,
compounded quarterly, payable (subject to the provisions of Article Four)
quarterly in arrears on the 15th day of April, July, October, and January in
each year (each, an "Interest Payment Date"), commencing on April 15, 1997,
to the Person in whose name such Junior Subordinated Debenture or any
predecessor Junior Subordinated Debenture is registered, at the close of
business on the regular record date for such interest installment, which, in
respect of (i) Junior Subordinated Debentures of which the Property Trustee
is the Holder and the Capital Securities are in book-entry only form or (ii)
a Global Subordinated Debenture, shall be the close of business on the
Business Day next preceding that Interest Payment Date. Notwithstanding the
foregoing sentence, if (i) the Junior Subordinated Debentures are held by the
Property Trustee and the Capital Securities are no longer in book-entry only
form or (ii) the Junior Subordinated Debentures are not represented by a
Global Subordinated Debenture, the record date for such interest installment
which shall be the 1st day of the month in which such payment is to be made.
The amount of each interest payment due with respect to the Junior
Subordinated Debentures will include amounts accrued through the date the
interest payment is due.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in
the following sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed will be computed
on the basis of the actual number of days elapsed in such a quarterly period.
In the event that any date on which interest is payable on the Junior
Subordinated Debentures is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date.
(c) If, at any time while the Property Trustee is the Holder of any
Junior Subordinated Debentures, the Trust or the Property Trustee is required
to pay any taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes) imposed by the United States, or any
other taxing authority, then, in any case, the Company will pay as additional
interest ("Additional Sums") on the Junior Subordinated Debentures held by
the Property Trustee such additional amounts as shall be required so that the
net amounts received and retained by the Trust and the Property Trustee after
paying such taxes, duties, assessments or other
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governmental charges will be equal to the amounts the Trust and the Property
Trustee would have received had no such taxes, duties, assessments or other
government charges been imposed.
2.6 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Junior
Subordinated Debentures shall be executed on behalf of the Company by its
President or any Vice President and attested by its Secretary or Assistant
Secretary. The signature of any of these officers on the Subordinated
Debentures may be manual or facsimile.
Junior Subordinated Debentures bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Junior Subordinated Debentures or did not hold such offices at the date of
such Junior Subordinated Debentures.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Junior Subordinated Debentures
executed by the Company to the Trustee for authentication, together with a
Company order for the authentication and delivery of such Junior Subordinated
Debentures. The Trustee in accordance with such Company order shall
authenticate and deliver such Junior Subordinated Debentures as in this
Indenture provided and not otherwise.
Upon the initial issuance, each Junior Subordinated Debentures shall be
dated ___________, 1997, and thereafter Junior Subordinated Debentures issued
hereunder shall be dated the date of their authentication.
No Junior Subordinated Debenture shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears
on such Junior Subordinated Debenture a certificate of authentication
substantially in the form provided for herein executed by the Trustee by
manual signature, and such certificate upon any Junior Subordinated Debenture
shall be conclusive evidence, and the only evidence, that such Junior
Subordinated Debenture has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.
2.7 REGISTRATION AND TRANSFER. The Company shall cause to be kept at
the Corporate Trust Office of the Trustee a register (the register maintained
in such office or any other office or agency pursuant to Section 5.2 being
herein sometimes referred to as the "Securities Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of the Junior Subordinated Debentures and of transfers
of the Junior Subordinated Debentures. The Trustee is hereby appointed
"Securities Registrar" for the purpose of registering the Junior Subordinated
Debentures and transfers of the Junior Subordinated Debentures as herein
provided.
Upon surrender for registration of transfer of any Junior Subordinated
Debenture at an office or agency of the Company designated pursuant to
Section 5.2 for such purpose, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, a new Junior Subordinated Debenture of the authorized
denomination.
All Junior Subordinated Debentures issued upon any registration of
transfer of Junior Subordinated Debentures shall be valid obligations of the
Company, evidencing the same debt and entitled to the same benefits under
this Indenture as the Junior Subordinated Debentures surrendered upon such
registration of transfer.
Every Junior Subordinated Debenture presented or surrendered for
registration of transfer shall be duly endorsed for transfer (if so required
by the Company or the Trustee), or shall be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Securities
Registrar duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing.
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No service charge shall be made for any registration of transfer of Junior
Subordinated Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer of Junior Subordinated Debentures.
The Company shall not be required to issue or register the transfer of any
Junior Subordinated Debenture during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Junior Subordinated Debentures selected for redemption pursuant to Article Three
and ending at the close of business on the day of such mailing.
2.8 MUTILATED, DESTROYED, LOST AND STOLEN JUNIOR SUBORDINATED DEBENTURES.
If any mutilated Junior Subordinated Debenture is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Junior Subordinated Debenture of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Junior Subordinated
Debenture and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Junior Subordinated Debenture has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Junior
Subordinated Debenture, a new Junior Subordinated Debenture of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Junior Subordinated
Debenture has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Junior Subordinated Debenture, pay such
Junior Subordinated Debenture.
Upon the issuance of any new Junior Subordinated Debenture under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Junior Subordinated Debenture issued pursuant to this Section in
lieu of any destroyed, lost or stolen Junior Subordinated Debenture shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Junior Subordinated Debenture shall be at
any time enforceable by anyone, and shall be entitled to all of the benefits of
this Indenture.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Junior Subordinated Debentures.
ARTICLE III
REDEMPTION OF JUNIOR SUBORDINATED DEBENTURES
3.1 REDEMPTION. Subject to the Company having received prior approval of
the Federal Reserve, if then required under the applicable capital guidelines or
policies of the Federal Reserve, the Company may redeem the Junior Subordinated
Debentures in accordance with this Article Three.
3.2 SPECIAL EVENT REDEMPTION. Subject to the Company having received the
prior approval of the Federal Reserve, if then required under the applicable
capital guidelines or policies of the Federal Reserve, if a Special Event has
occurred and is continuing, then, notwithstanding Section 3.3, the Company shall
have the right
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upon not less than 30 days nor more than 60 days notice to the Holders of the
Junior Subordinated Debentures to redeem the Junior Subordinated Debentures,
in whole but not in part, for cash within 90 days following the occurrence of
such Special Event (the "90-Day Period") at the Redemption Price, provided
that if at the time there is available to the Company the opportunity to
eliminate, within the 90-Day Period, the Tax Event by taking some ministerial
action ("Ministerial Action"), such as filing a form or making an election,
or pursuing some other similar reasonable measure which has no adverse effect
on the Company, the Trust or the Holders of the Trust Securities issued by
the Trust, the Company shall pursue such Ministerial Action in lieu of
redemption, and, provided, further, that the Company shall have no right to
redeem the Junior Subordinated Debentures while the Trust is pursuing any
Ministerial Action pursuant to its obligations under the Trust Agreement.
The Redemption Price shall be paid prior to 2:00 p.m., Minneapolis time, on
the date of such redemption or such earlier time as the Company determines,
provided that the Company shall deposit with the Trustee an amount sufficient
to pay the Redemption Price by 12:00 noon, Minneapolis time, on the date such
Redemption Price is to be paid.
3.3 OPTIONAL REDEMPTION BY COMPANY.
(a) Except as otherwise may be specified in this Indenture, the Company
shall have the right to redeem the Junior Subordinated Debentures, in whole or
in part, from time to time, on or after ____________, 2002, at the Redemption
Price. Any redemption pursuant to this Section 3.3 will be made upon not less
than 30 days nor more than 60 days notice to the Holder of the Junior
Subordinated Debentures, at the Redemption Price. If the Junior Subordinated
Debentures are only partially redeemed pursuant to this Section 3.3, the Junior
Subordinated Debentures will be redeemed pro rata or by lot or by any other
method utilized by the Trustee; provided, that if at the time of redemption the
Junior Subordinated Debentures are registered as a Global Subordinated
Debenture, the Depositary shall determine, in accordance with its procedures,
the principal amount of such Junior Subordinated Debentures held by each Holder
of Junior Subordinated Debentures to be redeemed. The Redemption Price shall be
paid prior to 2:00 p.m., Minneapolis time, on the date of such redemption or at
such earlier time as the Company determines provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Redemption Price by
12:00 noon, Minneapolis time, on the date such Redemption Price is to be paid.
(b) If a partial redemption of the Junior Subordinated Debentures would
result in the delisting of the Capital Securities issued by the Trust from the
Nasdaq National Market or any national securities exchange or other organization
on which the Capital Securities may then be listed, if any, the Company shall
not be permitted to effect such partial redemption and may only redeem the
Junior Subordinated Debentures in whole.
3.4 NOTICE OF REDEMPTION.
(a) In case the Company shall desire to exercise such right to redeem all
or, as the case may be, a portion of the Junior Subordinated Debentures in
accordance with the right reserved so to do, the Company shall, or shall cause
the Trustee to, give notice of such redemption to Holders of the Junior
Subordinated Debentures to be redeemed by mailing, first class postage prepaid,
a notice of such redemption not less than 30 days and not more than 60 days
before the date fixed for redemption to such Holders at their last addresses as
they shall appear upon the Securities Register. Any notice that is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the registered Holder receives the notice. In any case, failure
duly to give such notice to the Holder of any Junior Subordinated Debenture
designated for redemption in whole or in part, or any defect in the notice,
shall not affect the validity of the proceedings for the redemption of any other
Junior Subordinated Debentures. In the case of any redemption of Junior
Subordinated Debentures prior to the expiration of any restriction on such
redemption provided elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with any such
restriction.
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Each such notice of redemption shall specify the date fixed for redemption
and the Redemption Price, and shall state that payment of the Redemption Price
of such Junior Subordinated Debentures to be redeemed will be made at the office
or agency of the Company in Fargo, North Dakota, upon presentation and surrender
of such Junior Subordinated Debentures, that interest accrued to the date fixed
for redemption will be paid as specified in said notice, that from and after
said date interest will cease to accrue. If less than all the Junior
Subordinated Debentures are to be redeemed, the notice to the Holders of Junior
Subordinated Debentures to be redeemed in whole or in part shall specify the
particular Junior Subordinated Debentures to be so redeemed. In case any Junior
Subordinated Debenture is to be redeemed in part only, the notice that relates
to such Junior Subordinated Debenture shall state the portion of the principal
amount thereof to be redeemed, and shall state that on and after the redemption
date, upon surrender of such Junior Subordinated Debenture, a new Junior
Subordinated Debenture or Junior Subordinated Debentures in principal amount
equal to the unredeemed portion thereof shall be issued to the Holder.
(b) If less than all the Junior Subordinated Debentures are to be
redeemed, the Company shall give the Trustee at least 45 days' notice in advance
of the date fixed for redemption as to the aggregate principal amount of Junior
Subordinated Debentures to be redeemed, and thereupon the Trustee shall select,
by lot or in such other manner as it shall deem appropriate and fair in its
discretion and that may provide for the selection of a portion or portions
(equal to twenty-five U.S. dollars ($25) or any integral multiple thereof), the
Junior Subordinated Debentures to be redeemed and shall thereafter promptly
notify the Company in writing of the numbers of the Junior Subordinated
Debentures to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the Junior
Subordinated Debentures for redemption and to give notice of redemption in the
manner set forth in this Section, such notice to be in the name of the Company
or in the name of the Trustee or the paying agent, as the Trustee or such paying
agent may deem advisable. In any case in which notice of redemption is to be
given by the Trustee or any such paying agent, the Company shall deliver or
cause to be delivered to, or permit to remain with, the Trustee or such paying
agent, as the case may be, such Securities Register, transfer books or other
records, or suitable copies or extracts therefrom, sufficient to enable the
Trustee or such paying agent to give any notice by mail that may be required
under the provisions of this Section.
3.5 PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been completed as
above provided, the Junior Subordinated Debentures or portions of Junior
Subordinated Debentures to be redeemed specified in such notice shall become due
and payable on the date and at the place stated in such notice at the Redemption
Price (which includes interest accrued to the date fixed for redemption) and
interest on such Junior Subordinated Debentures or portions of Junior
Subordinated Debentures shall cease to accrue on and after the date fixed for
redemption, unless the Company shall default in the payment of such Redemption
Price with respect to any such Junior Subordinated Debenture or portion thereof.
On presentation and surrender of such Junior Subordinated Debentures on or after
the date fixed for redemption at the place of payment specified in the notice,
such Junior Subordinated Debentures shall be paid and redeemed at the Redemption
Price (which includes the interest accrued thereon to the date fixed for
redemption) (but if the date fixed for redemption is an Interest Payment Date,
the interest installment payable on such date shall be payable to the registered
Holder at the close of business on the applicable record date pursuant to
Section 2.5(a)).
(b) Upon presentation of any Junior Subordinated Debenture that is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Junior Subordinated Debenture is
presented shall deliver to the Holder thereof, at the expense of the Company, a
new
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Junior Subordinated Debenture or Junior Subordinated Debentures of authorized
denominations in principal amount equal to the unredeemed portion of the
Junior Subordinated Debenture so presented.
3.6 NO SINKING FUND. The Junior Subordinated Debentures are not entitled
to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
4.1 EXTENSION OF INTEREST PAYMENT PERIOD. So long as no Event of Default
has occurred and is continuing, the Company shall have the right, at any time
and from time to time during the term of the Junior Subordinated Debentures, to
defer payments of interest by extending the interest payment period of such
Junior Subordinated Debentures for a period not exceeding 20 consecutive
quarters (the "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable; provided that no
Extended Interest Payment Period may extend beyond the Maturity Date. To the
extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 4.1, will bear interest thereon at the Coupon Rate compounded
quarterly for each quarter of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Company
shall pay all interest accrued and unpaid on the Junior Subordinated Debentures,
including any Additional Sums and Compounded Interest (together, "Deferred
Interest") that shall be payable to the Holders of the Junior Subordinated
Debentures in whose names the Subordinated Debentures are registered in the
Securities Register on the first record date after the end of the Extended
Interest Payment Period. Before the termination of any Extended Interest
Payment Period, the Company may further extend such period, provided that such
period together with all such further extensions thereof shall not exceed 20
consecutive quarters, or extend beyond the Maturity Date. Upon the termination
of any Extended Interest Payment Period and upon the payment of all Deferred
Interest then due, the Company may commence a new Extended Interest Payment
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extended Interest Payment Period, except at the end thereof,
but the Company may prepay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.
4.2 NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered Holder of the Junior
Subordinated Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to the Administrative
Trustees, the Property Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions are payable, or (ii) the date the Trust
is required to give notice of the record date, or the date such Distributions
are payable, to the Capital Securities holders or to the Nasdaq National Market
or other applicable self regulatory organization, if any, but in any event at
least one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the Junior
Subordinated Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the Holders of the Junior Subordinated
Debentures and the Trustee written notice of its selection of such Extended
Interest Payment Period at least one Business Day before the earlier of (i) the
next succeeding Interest Payment Date, or (ii) the date the Company is required
to give notice of the record or payment date of such interest payment to the
Holders of the Junior Subordinated Debentures or to the Nasdaq National Market
or other applicable self regulatory organization, if any.
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(c) The quarter in which any notice is given pursuant to paragraph (a) or
paragraph (b) of this Section 4.2 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
4.3 LIMITATION OF TRANSACTIONS DURING EXTENSION. If: (i) the Company
shall exercise its right to defer payment of interest as provided in Section
4.1; or (ii) there shall have occurred any Event of Default, then the Company
shall be subject to the restrictions on payments set forth under Section 5.6.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
5.1 PAYMENT OF PRINCIPAL AND INTEREST. The Company will duly and
punctually pay or cause to be paid the principal of and interest on the Junior
Subordinated Debentures at the time and place and in the manner provided herein
and established with respect to such Junior Subordinated Debentures.
5.2 MAINTENANCE OF AGENCY. So long as any Junior Subordinated Debentures
remain Outstanding, the Company agrees to maintain an office or agency in Fargo,
North Dakota, or at such other location or locations as may be designated as
provided in this Section 5.2, where (i) Junior Subordinated Debentures may be
presented for payment, (ii) Junior Subordinated Debentures may be presented as
hereinabove authorized for registration of transfer and exchange, and (iii)
notices and demands to or upon the Company in respect of the Junior Subordinated
Debentures and this Indenture may be given or served, such designation to
continue with respect to such office or agency until the Company shall, by
written notice signed by its President or a Vice President and delivered to the
Trustee, designate some other office or agency for such purposes or any of them.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, notices and demands.
5.3 PAYING AGENTS.
(a) If the Company shall appoint one or more paying agents for the Junior
Subordinated Debentures, other than the Trustee, the Company will cause each
such paying agent to execute and deliver to the Trustee an instrument in which
such agent shall agree with the Trustee, subject to the provisions of this
Section:
(i) that it will hold all sums held by it as such agent for the
payment of the principal of or interest on the Junior Subordinated
Debentures (whether such sums have been paid to it by the Company or by
any other obligor) in trust for the benefit of the Persons entitled
thereto;
(ii) that it will give the Trustee notice of any failure by the
Company (or by any other obligor) to make any payment of the principal of
or interest on the Junior Subordinated Debentures when the same shall be
due and payable;
(iii) that it will, at any time during the continuance of any
failure referred to in the preceding paragraph (a)(ii) above, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such paying agent; and
(iv) that it will perform all other duties of paying agent as set
forth in this Indenture.
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(b) If the Company shall act as its own paying agent with respect to the
Junior Subordinated Debentures, it will on or before each due date of the
principal of or interest on Junior Subordinated Debentures, set aside,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay such principal or interest so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided
and will promptly notify the Trustee of such action, or any failure (by it or
any other obligor) to take such action. Whenever the Company shall have one or
more paying agents for the Junior Subordinated Debentures, it will, prior to
each due date of the principal of or interest on the Junior Subordinated
Debentures, deposit with the paying agent a sum sufficient to pay the principal
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal or interest, and (unless such paying agent is
the Trustee) the Company will promptly notify the Trustee of this action or
failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 13.5, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.
5.4 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE. The Company,
whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 9.10, a Trustee, so that there shall
at all times be a Trustee hereunder.
5.5 COMPLIANCE WITH CONSOLIDATION PROVISIONS. The Company will not, while
any of the Junior Subordinated Debentures remain Outstanding, consolidate with,
or merge into, or merge into itself, or sell or convey all or substantially all
of its property to any other company unless the provisions of Article Twelve
hereof are complied with.
5.6 RESTRICTIONS ON CERTAIN PAYMENTS. If at any time (i) there shall have
occurred any event of which the Company has actual knowledge that (a) with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default and (b) in respect to which the Company shall not have taken reasonable
steps to cure, or (ii) the Company shall have given notice of its election of an
Extended Interest Payment Period as provided herein with respect to the Junior
Subordinated Debentures and shall not have rescinded such notice, or such
Extended Interest Payment Period, or any extension thereof, shall be continuing;
or (iii) while the Junior Subordinated Debentures are held by the Trust, the
Company shall be in default with respect to its payment of any obligation under
the Capital Securities Guarantee, then the Company will not (1) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (2)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including the Junior
Subordinated Debentures) that rank pari passu with or junior in interest to the
Junior Subordinated Debentures or 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 interest to the Junior
Subordinated Debentures (other than (a) dividends or distributions in common
stock, (b) any declaration of a dividend in connection with the implementation
of a shareholders' rights plan, or the issuance of stock under any such plan in
the future or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Capital Securities Guarantee and (d) 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).
5.7 COVENANTS AS TO THE TRUST. For so long as the Trust Securities of the
Trust remain outstanding, the Company will (i) maintain 100% direct or indirect
ownership of the Common Securities of the Trust;
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provided, however, that any permitted successor of the Company under this
Indenture may succeed to the Company's ownership of the Common Securities,
(ii) use its reasonable efforts to cause the Trust (a) to remain a business
trust, except in connection with a distribution of Securities, the redemption
of all of the Trust Securities of the Trust or certain mergers,
consolidations or amalgamations, each as permitted by the Trust Agreement,
and (b) to otherwise continue not to be treated as an association taxable as
a corporation or partnership for United States federal income tax purposes
and (iii) to use its reasonable efforts to cause each Holder of Trust
Securities to be treated as owning an individual beneficial interest in the
Securities.
If the Junior Subordinated Debentures are to be issued as a Global
Subordinated Debenture in connection with the distribution of the Junior
Subordinated Debentures to the holders of the Capital Securities issued by the
Trust upon a Dissolution Event, the Company will use its best efforts to list
such Junior Subordinated Debentures on the Nasdaq National Market or on such
other exchange as the Capital Securities may then be listed.
ARTICLE VI
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
6.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF SECURITYHOLDERS.
The Company will furnish or cause to be furnished to the Trustee (a) on a
monthly basis on each regular record date (as defined in Section 2.5(a)) a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Holders as of such regular record date, provided that the Company shall
not be obligated to furnish or cause to furnish such list at any time that the
list shall not differ in any respect from the most recent list furnished to the
Trustee by the Company and (b) at such other times as the Trustee may request in
writing within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the
time such list is furnished; provided, however, that, in either case, no such
list need be furnished if the Trustee shall be the Security Registrar.
6.2 PRESERVATION OF INFORMATION; COMMUNICATIONS WITH SECURITYHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders
contained in the most recent list furnished to it as provided in Section 6.1 and
as to the names and addresses of Holders received by the Trustee in its capacity
as Security Registrar (if acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b) of the
Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Junior Subordinated Debentures.
6.3 REPORTS BY THE COMPANY.
(a) The Company covenants and agrees to file with the Trustee, within 15
days after the Company is required to file the same with the Commission, copies
of the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) that the Company may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Company is not required to file information, documents or
reports pursuant to either of such sections, then to file with the Trustee and
the Commission, in
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accordance with the rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports that may be required pursuant to any applicable rules and regulations
of the Commission.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from to time
by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first-class
postage prepaid, or reputable over-night delivery service that provides for
evidence of receipt, to the Securityholders, as their names and addresses appear
upon the Securities Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section as may
be required by rules and regulations prescribed from time to time by the
Commission.
6.4 REPORTS BY THE TRUSTEE.
(a) On or before __________ in each year in which any of the Junior
Subordinated Debentures are Outstanding, the Trustee shall transmit by mail,
first class postage prepaid, to the Securityholders, as their names and
addresses appear upon the Securities Register, a brief report dated as of the
preceding __________, if and to the extent required under Section 313(a) of the
Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust
Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to
Securityholders, be filed by the Trustee with the Company, and also with the
Commission.
ARTICLE VII
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
7.1 EVENTS OF DEFAULT.
(a) Whenever used herein, "Event of Default" means any one or more of the
following events that has occurred and is continuing:
(i) the Company defaults in the payment of any installment of
interest upon any of the Junior Subordinated Debentures, as and when the
same shall become due and payable, and continuance of such default for a
period of 30 days; provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms of this
Indenture shall not constitute a default in the payment of interest for
this purpose;
(ii) the Company defaults in the payment of the principal of any of
the Junior Subordinated Debentures as and when the same shall become due
and payable whether at maturity, upon redemption, by declaration or
otherwise;
(iii) the Company fails to observe or perform any other of its
covenants or agreements hereunder with respect to the Junior Subordinated
Debentures for a period of 90 days after the date on
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which written notice of such failure, requiring the same to be remedied
and stating that such notice is a "Notice of Default" hereunder, shall
have been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Junior Subordinated Debentures at the time
Outstanding;
(iv) the Company pursuant to or within the meaning of any Bankruptcy
Law (1) commences a voluntary case, (2) consents to the entry of an order
for relief against it in an involuntary case, (3) consents to the
appointment of a custodian of it or for all or substantially all of its
property or (4) makes a general assignment for the benefit of its
creditors;
(v) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (1) is for relief against the Company in an involuntary
case, (2) appoints a custodian of the Company for all or substantially all
of its property, or (3) orders the liquidation of the Company, and the
order or decree remains unstayed and in effect for 90 days; or
(vi) in the event Junior Subordinated Debentures are issued to the
Trust or a trustee of the Trust in connection with the issuance of Trust
Securities by the Trust, the Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence,
except in connection with (1) the distribution of Junior Subordinated
Debentures to holders of Trust Securities in liquidation of their interests
in the Trust, (2) the redemption of all of the outstanding Trust Securities
of the Trust or (3) certain mergers, consolidations or amalgamations, each
as permitted by the Trust Agreement.
(b) In each and every such case, unless the principal of all the Junior
Subordinated Debentures shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Junior Subordinated Debentures then Outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by such Securityholders) may declare
the principal of all the Junior Subordinated Debentures to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, notwithstanding anything contained in this
Indenture or in the Junior Subordinated Debentures to the contrary.
(c) At any time after the principal of the Junior Subordinated Debentures
shall have been so declared due and payable, and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Holders of a majority in aggregate principal amount of
the Junior Subordinated Debentures then Outstanding, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if: (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Junior
Subordinated Debentures and the principal of any and all Junior Subordinated
Debentures that shall have become due otherwise than by acceleration (with
interest upon such principal and, to the extent that such payment is enforceable
under applicable law, upon overdue installments of interest, at the rate per
annum expressed in the Junior Subordinated Debentures to the date of such
payment or deposit) and the amount payable to the Trustee under Section 9.6, and
(ii) any and all Events of Default under this Indenture, other than the
nonpayment of principal on Junior Subordinated Debentures that shall not have
become due by their terms, shall have been remedied or waived as provided in
Section 7.6. Should the Holders fail to annul such declaration and waive such
default, then the holders of a majority in aggregate Liquidation Amount of the
Capital Securities shall have such right.
No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
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(d) In case the Trustee shall have proceeded to enforce any right with
respect to Junior Subordinated Debentures under this Indenture and such
proceedings shall have been discontinued or abandoned because of such rescission
or annulment or for any other reason or shall have been determined adversely to
the Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
7.2 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
(a) The Company covenants that (i) in case it shall default in the payment
of any installment of interest on any of the Junior Subordinated Debentures as
and when the same shall have become due and payable, and such default shall have
continued for a period of 90 Business Days, or (ii) in case it shall default in
the payment of the principal of any of the Junior Subordinated Debentures when
the same shall have become due and payable, whether upon maturity of the Junior
Subordinated Debentures or upon redemption or upon declaration or otherwise,
then, upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the Holders of the Junior Subordinated Debentures, the whole amount
that then shall have become due and payable on all such Junior Subordinated
Debentures for principal or interest, or both, as the case may be, with interest
upon the overdue principal and (to the extent that payment of such interest is
enforceable under applicable law and, if the Junior Subordinated Debentures are
held by the Trust or a trustee of the Trust, without duplication of any other
amounts paid by the Trust or trustee in respect thereof) upon overdue
installments of interest at the rate per annum expressed in the Junior
Subordinated Debentures; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, and the amount
payable to the Trustee under Section 9.6.
(b) If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the Junior
Subordinated Debentures and collect the moneys adjudged or decreed to be payable
in the manner provided by law out of the property of the Company or other
obligor upon the Junior Subordinated Debentures, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affecting the Company or the creditors or property of either, the Trustee shall
have power to intervene in such proceedings and take any action therein that may
be permitted by the court and shall (except as may be otherwise provided by law)
be entitled to file such proofs of claim and other papers and documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
Holders of Junior Subordinated Debentures allowed for the entire amount due and
payable by the Company under this Indenture at the date of institution of such
proceedings and for any additional amount that may become due and payable by the
Company after such date, and to collect and receive any moneys or other property
payable or deliverable on any such claim, and to distribute the same after the
deduction of the amount payable to the Trustee under Section 9.6; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Holders to make such payments to the Trustee, and, in
the event that the Trustee shall consent to the making of such payments directly
to such Securityholders, to pay to the Trustee any amount due it under Section
9.6.
(d) All rights of action and of asserting claims under this Indenture may
be enforced by the Trustee without the possession of any of the Junior
Subordinated Debentures, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for payment to
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the Trustee of any amounts due under Section 9.6, be for the ratable benefit
of the Holders of the Junior Subordinated Debentures.
In case of an Event of Default hereunder, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Junior Subordinated Debentures or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
7.3 APPLICATION OF MONEYS COLLECTED. Any moneys collected by the Trustee
pursuant to this Article with respect to the Junior Subordinated Debentures
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal
or interest, upon presentation of the Junior Subordinated Debentures, and
notation thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 9.6;
SECOND: To the payment of all Senior and Subordinated Debt of the Company
if and to the extent required by Article Sixteen; and
THIRD: To the payment of the amounts then due and unpaid upon Junior
Subordinated Debentures for principal and interest, in respect of which or for
the benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such Junior
Subordinated Debentures for principal and interest, respectively.
7.4 LIMITATION ON SUITS. No Holder shall have any right by virtue of or
by availing any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such Holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof; (ii) the
Holders of not less than 25% in aggregate principal amount of the Junior
Subordinated Debentures then Outstanding shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as
trustee hereunder; (iii) such Holder or Holders shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby; and (iv) the Trustee for 60
days after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding; and (v) during such 60
day period, the Holders of a majority in principal amount of the Junior
Subordinated Debentures do not give the Trustee a direction inconsistent with
the request.
Notwithstanding any other provisions of this Indenture to the contrary, the
right of any Holder to receive payment of the principal of and interest on the
Junior Subordinated Debentures on or after the respective due dates (or in the
case of redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such Holder; and
by accepting a Junior Subordinated Debenture hereunder it is expressly
understood, intended and covenanted by the Holder thereof with every other such
Holder and the Trustee, that no one or more
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Holders shall have any right in any manner whatsoever by virtue of or by
availing any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders, or to obtain or seek to obtain priority over or
preference to any such other Holders, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable
and common benefit of all Holders of Junior Subordinated Debentures. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
7.5 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER.
(a) Except as otherwise provided in Section 7.2, all powers and remedies
given by this Article to the Trustee or to the Securityholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive of any other
powers and remedies available to the Trustee or the Holders of the Junior
Subordinated Debentures, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to such Junior Subordinated
Debentures.
(b) No delay or omission of the Trustee or of any Holder of any of the
Junior Subordinated Debentures to exercise any right or power accruing upon any
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or on
acquiescence therein; and, subject to the provisions of Section 7.4, every power
and remedy given by this Article or by law to the Trustee or the Securityholders
may be exercised from time to time, and as often as shall be deemed expedient,
by the Trustee or by the Securityholders.
7.6 CONTROL BY SECURITYHOLDERS. The Holders of a majority in aggregate
principal amount of the Junior Subordinated Debentures at the time Outstanding,
determined in accordance with Section 10.4, shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee;
provided, however, that such direction shall not be in conflict with any rule of
law or with this Indenture. Subject to the provisions of Section 9.1, the
Trustee shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceeding so directed would involve the Trustee in
personal liability. The Holders of a majority in aggregate principal amount of
the Junior Subordinated Debentures at the time Outstanding affected thereby,
determined in accordance with Section 10.4, may on behalf of the Holders of all
of the Junior Subordinated Debentures waive any past default in the performance
of any of the covenants contained herein and its consequences, except (i) a
default in the payment of the principal of or interest on any of the Junior
Subordinated Debentures as and when the same shall become due by its terms
otherwise than by acceleration (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal has been
deposited with the Trustee (in accordance with Section 7.1(c)), (ii) a default
in the covenants contained in Section 5.6 or (iii) in respect of a covenant or
provision hereof which under Article Eleven cannot be modified or amended
without the consent of the Holder of each Outstanding Junior Subordinated
Debenture affected; provided, however, that if the Junior Subordinated
Debentures are held by the Trust or a Trustee of the Trust, such waiver or
modification to such waiver shall not be effective until the Holders of a
majority in Liquidation Amount of Trust Securities of the Trust shall have
consented to such waiver or modification to such waiver; provided further, that
if the consent of the Holder of each Outstanding Junior Subordinated Debentures
is required, such waiver shall not be effective until each Holder of the Trust
Securities of the Trust shall have consented to such waiver. Upon any such
waiver, the default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Company, the Trustee and the Holders of the Junior
Subordinated Debentures shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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7.7 UNDERTAKING TO PAY COSTS. All parties to this Indenture agree, and
each Holder of any Junior Subordinated Debentures by such Holder's acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken or omitted by
it as Trustee, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder, or group of Securityholders, holding more than
10% in aggregate principal amount of the Outstanding Junior Subordinated
Debentures, or to any suit instituted by any Securityholder for the enforcement
of the payment of the principal of or interest on the Junior Subordinated
Debentures on or after the due dates thereof.
ARTICLE VIII
FORM OF JUNIOR SUBORDINATED DEBENTURE AND ORIGINAL ISSUE
8.1 FORM OF JUNIOR SUBORDINATED DEBENTURE. The Junior Subordinated
Debenture and the Trustee's Certificate of Authentication to be endorsed thereon
are to be substantially in the forms contained as Exhibit A to this Indenture,
attached hereto and incorporated herein by reference.
8.2 ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES. Junior Subordinated
Debentures in the aggregate principal amount of $____________ may, upon
execution of this Indenture, be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver the Junior Subordinated Debentures to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its President, any Vice
President or its Chief Financial Officer, without any further action by the
Company.
ARTICLE IX
CONCERNING THE TRUSTEE
9.1 CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform with respect to the Junior Subordinated Debentures such duties and only
such duties as are specifically set forth in this Indenture, and no implied
covenants shall be read into this Indenture against the Trustee. In case an
Event of Default has occurred (that has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(1) the duties and obligations of the Trustee shall be
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determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
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 Trustee and conforming to
the requirements of this Indenture; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirement of this Indenture;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in principal amount of
the Junior Subordinated Debentures at the time Outstanding relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee under this Indenture; and
(iv) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it.
9.2 CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided in Section
9.1:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, security or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by the President or any Vice President and by
the Secretary or an Assistant Secretary or the Chief Financial Officer thereof
(unless other evidence in respect thereof is specifically prescribed herein);
(c) The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted hereunder in
good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Securityholders, pursuant to the provisions of this Indenture, unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default (that has not been
cured or waived) to exercise such of the rights and powers vested in it by this
Indenture, and to use the same degree of
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care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(e) The Trustee shall not be liable for any action taken or omitted to be
taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing so to do by the Holders
of not less than a majority in principal amount of the Outstanding Junior
Subordinated Debentures (determined as provided in Section 10.4); provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Company or, if paid by the Trustee, shall
be repaid by the Company upon demand; and
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
9.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF THE JUNIOR
SUBORDINATED DEBENTURES.
(a) The recitals contained herein and in the Junior Subordinated
Debentures shall be taken as the statements of the Company and the Trustee
assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Junior Subordinated Debentures.
(c) The Trustee shall not be accountable for the use or application by the
Company of any of the Junior Subordinated Debentures or of the proceeds of such
Junior Subordinated Debentures, or for the use or application of any moneys paid
over by the Trustee in accordance with any provision of this Indenture, or for
the use or application of any moneys received by any paying agent other than the
Trustee.
9.4 MAY HOLD JUNIOR SUBORDINATED DEBENTURES. The Trustee or any paying
agent or Securities Registrar, in its individual or any other capacity, may
become the owner or pledgee of Junior Subordinated Debentures with the same
rights it would have if it were not Trustee, paying agent or Securities
Registrar.
9.5 MONEYS HELD IN TRUST. Subject to the provisions of Section 13.5, all
moneys received by the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
9.6 COMPENSATION AND REIMBURSEMENT.
(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), as the Company and the Trustee may from time to time agree in
writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any
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of the powers and duties hereunder of the Trustee, and, except as otherwise
expressly provided herein, the Company will pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred
or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee
(and its officers, agents, directors and employees) for, and to hold it
harmless against, any loss, liability or expense incurred without negligence
or bad faith on the part of the Trustee and arising out of or in connection
with the acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Junior Subordinated Debentures upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the Holders
of the Junior Subordinated Debentures.
9.7 RELIANCE ON OFFICERS' CERTIFICATE. Except as otherwise provided in
Section 9.1, whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting to take any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to be taken by
it under the provisions of this Indenture upon the faith thereof.
9.8 DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Trustee and the Company shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
9.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be
a Trustee with respect to the Junior Subordinated Debentures issued hereunder
which shall at all times be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or other Person permitted to act as
trustee by the Commission, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by Federal, State, Territorial, or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control with the Company,
serve as Trustee. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 9.10.
9.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee, or any successor hereafter appointed, may at any time
resign by giving written notice thereof to the Company and by transmitting
notice of resignation by mail, first-class postage prepaid, to the
Securityholders, as their names and addresses appear upon the Securities
Register. Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall be delivered
to the resigning
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Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee,
or any Securityholder who has been a bona fide Holder of Junior Subordinated
Debentures for at least six months may, subject to the provisions of Section
7.7, on behalf of such Securityholder and all other Holders, petition any
such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section
9.8 after written request therefor by the Company or by any Securityholder
who has been a bona fide Holder of Junior Subordinated Debentures for at
least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 9.9 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy
proceeding, or a receiver of the Trustee or of its property shall be
appointed or consented to, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of Section
7.7, unless the Trustee's duty to resign is stayed as provided herein, any
Securityholder who has been a bona fide Holder of Junior Subordinated
Debentures for at least six months may, on behalf of that Holder and all
other Holders, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee. Such court may
thereupon after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the Junior
Subordinated Debentures at the time Outstanding may at any time remove the
Trustee by so notifying the Trustee and the Company and may appoint a successor
Trustee with the consent of the Company.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 9.11.
9.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor trustee, every
such successor trustee so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor trustee all the
rights, powers, and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor trustee all property and money held by
such retiring Trustee hereunder.
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(b) Upon request of any such successor trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, powers and trusts referred to in
paragraph (a) of this Section.
(c) No successor trustee shall accept its appointment unless at the time
of such acceptance such successor trustee shall be qualified and eligible under
this Article.
(d) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first-class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Securities Register. If the
Company fails to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be transmitted at the expense of the Company.
9.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
qualified and eligible under the provisions of this Article Nine, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case any
Junior Subordinated Debentures shall have been authenticated, but not delivered,
by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Junior Subordinated Debentures so authenticated with the same effect
as if such successor Trustee had itself authenticated such Junior Subordinated
Debentures.
9.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY. The Trustee
shall comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship described in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent included therein.
9.14 APPOINTMENT OF AUTHENTICATING AGENT. At any time when any of the
Junior Subordinated Debentures remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents which shall be authorized to act on behalf of the
Trustee to authenticate Junior Subordinated Debentures issued upon original
issuance, exchange, registration of transfer or partial redemption thereof or
pursuant to Section 2.8, and Junior Subordinated Debentures so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Junior Subordinated Debentures by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $10,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports
of condition at least annually, pursuant to law or to the requirements of such
supervision or examining authority, for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
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Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such notice of
resignation or upon such termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Company and shall mail written notice of such appointment by
first-class mail, postage prepaid, to all Securityholders as their names and
addresses appear in the Securities Register. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with the like effect as
if originally named as an Authenticating Agent herein. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 9.6.
If an appointment is made pursuant to this Section, the Junior Subordinated
Debentures may have endorsed thereon, in lieu of the form of certificate of
authentication set forth in Section 8.1, a certificate of authentication in the
following form:
"This is one of the Junior Subordinated Debentures described in the
within mentioned Indenture."
-------------------------------------------
As Trustee
By ----------------------------------------
As Authenticating Agent
By ----------------------------------------
Authorized Signature
ARTICLE X
CONCERNING THE SECURITYHOLDERS
10.1 EVIDENCE OF ACTION BY SECURITYHOLDERS. Whenever in this Indenture it
is provided that the Holders of a majority or specified percentage in aggregate
principal amount of the Junior Subordinated Debentures may take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that at the time
of taking any such action the Holders of such majority or specified percentage
have joined therein may be evidenced by any instrument or any number of
instruments of similar tenor executed by such Holders in Person or by agent or
proxy appointed in writing.
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If the Company shall solicit from the Securityholders any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company
may, at its option, as evidenced by an Officers' Certificate, fix in advance a
record date for the determination of Securityholders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
action, but the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only
the Securityholders of record at the close of business on the record date shall
be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of Outstanding Junior Subordinated
Debentures have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that
purpose the Outstanding Junior Subordinated Debentures shall be computed as of
the record date; provided, however, that no such authorization, agreement or
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
10.2 PROOF OF EXECUTION BY SECURITYHOLDERS. Subject to the provisions of
Section 6.1, proof of the execution of any instrument by a Securityholder (such
proof will not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Junior Subordinated Debentures shall be
sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Junior Subordinated Debentures shall be proved by the
Securities Register or by a certificate of the Securities Registrar thereof.
(c) The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
10.3 WHO MAY BE DEEMED OWNERS. Prior to the due presentment for
registration of transfer of any Junior Subordinated Debenture, the Company, the
Trustee, any paying agent and any Securities Registrar may deem and treat the
Person in whose name such Junior Subordinated Debenture shall be registered upon
the books of the Company as the absolute owner of such Junior Subordinated
Debenture (whether or not such Junior Subordinated Debenture shall be overdue
and notwithstanding any notice of ownership or writing thereon made by anyone
other than the Securities Registrar) for the purpose of receiving payment of or
on account of the principal of and (subject to Section 2.3) interest on such
Junior Subordinated Debenture and for all other purposes; and neither the
Company nor the Trustee nor any paying agent nor any Securities Registrar shall
be affected by any notice to the contrary.
10.4 CERTAIN JUNIOR SUBORDINATED DEBENTURES OWNED BY COMPANY DISREGARDED.
In determining whether the Holders of the requisite aggregate principal amount
of Junior Subordinated Debentures have concurred in any direction, consent or
waiver under this Indenture, the Junior Subordinated Debentures that are owned
by the Company or any other obligor on the Junior Subordinated Debentures or by
any Person directly or indirectly controlling or controlled by or under common
control with the Company or any other obligor on the Junior Subordinated
Debentures shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination, except that for the purpose of determining whether
the Trustee shall be protected in relying on any such direction, consent or
waiver, only Junior Subordinated Debentures that the Trustee actually knows are
so owned shall be so disregarded. The Junior Subordinated Debentures so owned
that have been pledged in good faith may be regarded as Outstanding for the
purposes of this Section, if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right with respect to such Junior Subordinated
Debentures and that the pledgee is not a Person directly or indirectly
controlling or controlled by or under direct or indirect common
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control with the Company or any such other obligor. In case of a dispute as
to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee.
10.5 ACTIONS BINDING ON FUTURE SECURITYHOLDERS. At any time prior to (but
not after) the evidencing to the Trustee, as provided in Section 10.1, of the
taking of any action by the Holders of the majority or percentage in aggregate
principal amount of the Junior Subordinated Debentures specified in this
Indenture in connection with such action, any Holder who is shown by the
evidence to have consented to such action may, by filing written notice with the
Trustee, and upon proof of holding as provided in Section 10.2, revoke such
action so far as concerns such Holder's Junior Subordinated Debentures. Except
as aforesaid any such action taken by the Holder shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Holder's Junior
Subordinated Debentures, and of any Junior Subordinated Debentures issued in
exchange therefor, on registration of transfer thereof or in place thereof,
irrespective of whether or not any notation in regard thereto is made upon such
Junior Subordinated Debentures. Any action taken by the Holders of the majority
or percentage in aggregate principal amount of the Junior Subordinated
Debentures specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the Holders of all the
Junior Subordinated Debentures.
ARTICLE XI
SUPPLEMENTAL INDENTURES
11.1 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF SECURITYHOLDERS. In
addition to any supplemental indenture otherwise authorized by this Indenture,
the Company and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without the consent of
the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein, or in the
Junior Subordinated Debentures, provided that any such action does not
materially adversely affect the interests of the Holders or the holders of the
Capital Securities so long as they remain outstanding;
(b) to comply with Article Twelve;
(c) to provide for uncertificated Junior Subordinated Debentures in
addition to or in place of certificated Junior Subordinated Debentures;
(d) to add to the covenants of the Company for the benefit of the Holders
or to surrender any right or power herein conferred upon the Company;
(e) to add to, delete from, or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Junior Subordinated Debentures, as herein set
forth;
(f) to make any change that does not adversely affect the rights of any
Securityholder in any material respect; or
(g) to establish the form of any certifications required to be furnished
pursuant to the terms of this Indenture or to add to the rights of the Holders.
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The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may
be executed by the Company and the Trustee without the consent of the Holders of
any of the Junior Subordinated Debentures at the time Outstanding,
notwithstanding any of the provisions of Section 11.2.
11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS. With the
consent (evidenced as provided in Section 10.1) of the Holders of not less than
a majority in aggregate principal amount of the Junior Subordinated Debentures
at the time Outstanding, the Company, when authorized by Board Resolutions, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner not
covered by Section 11.1 the rights of the Holders of the Junior Subordinated
Debentures under this Indenture; provided, however, that no such supplemental
indenture shall without the consent of the Holders of each Junior Subordinated
Debenture then Outstanding, (i) change the stated maturity of the Junior
Subordinated Debentures, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or (ii) reduce the
percentage of principal amount of Junior Subordinated Debentures, the Holders of
which are required to consent to any such supplemental indenture; provided,
further, that if the Junior Subordinated Debentures are held by the Trust or a
trustee of the Trust, such supplemental indenture shall not be effective until
the holders of a majority in aggregate Liquidation Amount of Capital Securities
shall have consented to such supplemental indenture; provided further, that if
the consent of the Holder of each Outstanding Junior Subordinated Debenture is
required, such supplemental indenture shall not be effective until each Holder
of the Trust Securities shall have consented to such supplemental indenture.
It shall not be necessary for the consent of the Securityholders to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
11.3 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article or of Section
12.1, this Indenture shall be and be deemed to be modified and amended in
accordance therewith.
11.4 JUNIOR SUBORDINATED DEBENTURES AFFECTED BY SUPPLEMENTAL INDENTURES.
Junior Subordinated Debentures, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 12.1, may bear a
notation in form approved by the Company, as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Junior
Subordinated Debentures so modified as to conform, in the opinion of the Board
of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Junior Subordinated Debentures then
Outstanding.
11.5 EXECUTION OF SUPPLEMENTAL INDENTURES. Upon the request of the
Company, accompanied by Board Resolutions authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of Securityholders required to consent thereto as aforesaid, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Section 9.1, may receive
an Opinion of Counsel as conclusive evidence that any supplemental
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indenture executed pursuant to this Article is authorized or permitted by,
and conforms to, the terms of this Article and that it is proper for the
Trustee under the provisions of this Article to join in the execution thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first-class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders as their names and addresses appear upon the Securities
Register. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
ARTICLE XII
SUCCESSOR CORPORATION
12.1 COMPANY MAY CONSOLIDATE, ETC. The Company shall not consolidate with
or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless (i) in
case the Company consolidates with or merges into another Person or conveys or
transfers its properties and assets substantially as an entirety to any Person,
the successor Person is organized under the laws of the United States or any
state or the District of Columbia, and such successor Person expressly assumes
the Company's obligations on the Junior Subordinated Debentures issued under
this Indenture; (ii) immediately after giving effect thereto, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing; and (iii) such
successor Person expressly assumes the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be kept and
performed by the Company by executing and delivering a supplemental indenture in
form and substance satisfactory to the Trustee.
12.2 SUCCESSOR SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition and upon the assumption by the successor Person by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the due and punctual payment of the principal of and
interest on all of the Junior Subordinated Debentures Outstanding and the due
and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
as the Company herein, and thereupon the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and the Junior
Subordinated Debentures.
(b) In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition such changes in phraseology and form (but not in substance)
may be made in the Junior Subordinated Debentures thereafter to be issued as may
be appropriate.
12.3 EVIDENCE OF CONSOLIDATION, ETC., TO TRUSTEE. The Trustee, subject to
the provisions of Section 9.1, may receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
other disposition, and any such assumption, comply with the provisions of this
Article.
ARTICLE XIII
SATISFACTION AND DISCHARGE
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13.1 SATISFACTION AND DISCHARGE OF INDENTURE. If at any time: (a) the
Company shall have delivered to the Trustee for cancellation all Junior
Subordinated Debentures theretofore authenticated (other than any Junior
Subordinated Debentures that shall have been destroyed, lost or stolen and that
shall have been replaced or paid as provided in Section 2.8) and Junior
Subordinated Debentures for whose payment money or Governmental Obligations have
theretofore been deposited in trust or segregated and held in trust by the
Company (and thereupon repaid to the Company or discharged from such trust, as
provided in Section 13.5); or (b) all such Junior Subordinated Debentures not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
deposit or cause to be deposited with the Trustee as trust funds the entire
amount in moneys or Governmental Obligations sufficient or a combination thereof
sufficient, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay at maturity or upon redemption all Junior Subordinated
Debentures not theretofore delivered to the Trustee for cancellation, including
principal and interest due or to become due to such date of maturity or date
fixed for redemption, as the case may be, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company; then this
Indenture shall thereupon cease to be of further effect except for the
provisions of Sections 2.2, 2.3, 2.4, 2.5, 4.1, 4.2, 4.3 and 9.10, that shall
survive until the date of maturity or redemption date, as the case may be, and
Sections 9.6 and 13.5, that shall survive to such date and thereafter, and the
Trustee, on demand of the Company and at the cost and expense of the Company,
shall execute proper instruments acknowledging satisfaction of and discharging
this Indenture.
13.2 DISCHARGE OF OBLIGATIONS. If at any time all such Junior Subordinated
Debentures not theretofore delivered to the Trustee for cancellation or that
have not become due and payable as described in Section 13.1 shall have been
paid by the Company by depositing irrevocably with the Trustee as trust funds
moneys or an amount of Governmental Obligations sufficient to pay at maturity or
upon redemption all such Junior Subordinated Debentures not theretofore
delivered to the Trustee for cancellation, including principal and interest due
or to become due to such date of maturity or date fixed for redemption, as the
case may be, and if the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company, then after the date such moneys or
Governmental Obligations, as the case may be, are deposited with the Trustee the
obligations of the Company under this Indenture shall cease to be of further
effect except for the provisions of Sections 2.2, 2.3, 2.4, 2.5, 4.1, 4.2, 4.3,
9.6, 9.10 and 13.5 hereof that shall survive until such Junior Subordinated
Debentures shall mature and be paid. Thereafter, Sections 9.6 and 13.5 shall
survive.
13.3 DEPOSITED MONEYS TO BE HELD IN TRUST. All monies or Governmental
Obligations deposited with the Trustee pursuant to Sections 13.1 or 13.2 shall
be held in trust and shall be available for payment as due, either directly or
through any paying agent (including the Company acting as its own paying agent),
to the Holders of the Junior Subordinated Debentures for the payment or
redemption of which such moneys or Governmental Obligations have been deposited
with the Trustee.
13.4 PAYMENT OF MONIES HELD BY PAYING AGENTS. In connection with the
satisfaction and discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of this Indenture
shall, upon demand of the Company, be paid to the Trustee and thereupon such
paying agent shall be released from all further liability with respect to such
moneys or Governmental Obligations.
13.5 REPAYMENT TO COMPANY. Any monies or Governmental Obligations
deposited with any paying agent or the Trustee, or then held by the Company in
trust for payment of principal of or interest on the Junior Subordinated
Debentures that are not applied but remain unclaimed by the Holders of such
Junior Subordinated Debentures for at least two years after the date upon which
the principal of or interest on such Junior Subordinated Debentures shall have
respectively become due and payable, shall be repaid to the Company on
____________ of each year or (if then held by the Company) shall be discharged
from such trust; and thereupon
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the paying agent and the Trustee shall be released from all further liability
with respect to such moneys or Governmental Obligations, and the Holder of
any of the Junior Subordinated Debentures entitled to receive such payment
shall thereafter, as an unsecured general creditor, look only to the Company
for the payment thereof.
ARTICLE XIV
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
14.1 NO RECOURSE. No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Junior Subordinated Debenture, or for any
claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director as such, past, present or future,
of the Company or of any predecessor or successor corporation, either directly
or through the Company or any such predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Junior Subordinated Debentures or implied therefrom; and that
any and all such personal liability of every name and nature, either at common
law or in equity or by constitution or statute, of, and any and all such rights
and claims against, every such incorporator, stockholder, officer or director as
such, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Junior Subordinated Debentures or implied therefrom,
are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of such
Junior Subordinated Debentures.
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.1 EFFECT ON SUCCESSORS AND ASSIGNS. All the covenants, stipulations,
promises and agreements in this Indenture contained by or on behalf of the
Company or the Trustee shall bind their respective successors and assigns,
whether so expressed or not.
15.2 ACTIONS BY SUCCESSOR. Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation
that shall at the time be the lawful sole successor of the Company.
15.3 SURRENDER OF COMPANY POWERS. The Company by instrument in writing
executed by authority of 2/3 (two-thirds) of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved to the
Company, and thereupon such power so surrendered shall terminate both as to the
Company and as to any successor corporation.
15.4 NOTICES. Except as otherwise expressly provided herein any notice or
demand that by any provision of this Indenture is required or permitted to be
given or served by the Trustee or by the Holders of Junior Subordinated
Debentures to or on the Company may be given or served by being deposited
first-class postage prepaid in a post-office letterbox addressed (until another
address is filed in writing by the Company with the Trustee), as follows: c/o
Community First Bankshares, Inc., 520 Main Avenue, Fargo, North Dakota, 58124,
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Attention Chief Financial Officer. Any notice, election, request or demand
by the Company or any Securityholder to or upon the Trustee shall be deemed
to have been sufficiently given or made, for all purposes, if given or made
in writing at the Corporate Trust Office of the Trustee.
15.5 GOVERNING LAW. This Indenture and each Junior Subordinated Debenture
shall be deemed to be a contract made under the internal laws of the State of
Minnesota and for all purposes shall be construed in accordance with the laws of
said State, provided that the immunities and the standard of care of the
Trustee shall be governed by Delaware law.
15.6 TREATMENT OF JUNIOR SUBORDINATED DEBENTURES AS DEBT. It is intended
that the Junior Subordinated Debentures will be treated as indebtedness and not
as equity for federal income tax purposes. The provisions of this Indenture
shall be interpreted to further this intention.
15.7 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
(b) Every certificate or opinion delivered to the Trustee with respect to
compliance with a condition or covenant in this Indenture shall include (1) a
statement that the Person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such Person, such Person has made such examination or investigation as is
necessary to enable such Person to express an informed opinion as to whether or
not such covenant or condition has been complied with; and (4) a statement as to
whether or not, in the opinion of such Person, such condition or covenant has
been complied with.
15.8 PAYMENTS ON BUSINESS DAYS. In any case where the date of maturity of
interest or principal of the Junior Subordinated Debentures or the date of
redemption of the Junior Subordinated Debentures shall not be a Business Day,
then payment of interest or principal will be made on the next succeeding
Business Day (without any additional interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date such
payment was originally payable.
15.9 CONFLICT WITH TRUST INDENTURE ACT. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
15.10 COUNTERPARTS. This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
15.11 SEPARABILITY. In case any one or more of the provisions
contained in this Indenture or in the Junior Subordinated Debentures shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Indenture or of the Junior Subordinated Debentures, but this Indenture
and the Junior Subordinated Debentures shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
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15.12 ASSIGNMENT. The Company will have the right at all times to
assign any of its respective rights or obligations under this Indenture to a
direct or indirect wholly-owned Subsidiary of the Company, provided that, in the
event of any such assignment, the Company will remain liable for all such
obligations. Subject to the foregoing, this Indenture is binding upon and
inures to the benefit of the parties thereto and their respective successors and
assigns. This Indenture may not otherwise be assigned by the parties hereto.
15.13 ACKNOWLEDGMENT OF RIGHTS. The Company acknowledges that, with
respect to any Junior Subordinated Debentures held by the Trust or a trustee of
the Trust, if the Property Trustee of the Trust fails to enforce its rights
under this Indenture as the Holder of the Junior Subordinated Debentures held as
the assets of the Trust, any holder of Capital Securities may institute legal
proceedings directly against the Company to enforce such Property Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Property Trustee or any other person or entity. Notwithstanding
the foregoing, if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or principal
on the Junior Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), the
Company acknowledges that a holder of Capital Securities may directly institute
a proceeding for enforcement of payment to such holder of the principal of or
interest on the Junior Subordinated Debentures having a principal amount equal
to the aggregate Liquidation Amount of the Capital Securities of such holder on
or after the respective due date specified in the Junior Subordinated
Debentures. This Section 15.13 may not be amended without the prior written
consent of the holders of all of the Capital Securities.
ARTICLE XVI
SUBORDINATION OF JUNIOR SUBORDINATED DEBENTURES
16.1 AGREEMENT TO SUBORDINATE. The Company covenants and agrees, and each
Holder of Junior Subordinated Debentures issued hereunder by such Holder's
acceptance thereof likewise covenants and agrees, that all Junior Subordinated
Debentures shall be issued subject to the provisions of this Article Sixteen;
and each Holder, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of and interest on all Junior
Subordinated Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior and Subordinated Debt, whether outstanding
at the date of this Indenture or thereafter incurred.
No provision of this Article Sixteen shall prevent the occurrence of any
default or Event of Default hereunder.
16.2 DEFAULT ON SENIOR AND SUBORDINATED DEBT. In the event and during the
continuation of any default by the Company in the payment of principal, premium,
interest or any other payment due on any Senior and Subordinated Debt of the
Company or in the event that the maturity of any Senior and Subordinated Debt of
the Company has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal of or
interest on the Junior Subordinated Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 16.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior and
Subordinated Debt or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior and
Subordinated Debt may have been issued, as their respective interests may
appear, but only to the extent that
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the holders of the Senior and Subordinated Debt (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior and Subordinated
Debt and only the amounts specified in such notice to the Trustee shall be
paid to the holders of Senior and Subordinated Debt.
16.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment by the Company
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to creditors upon any dissolution or winding-up or
liquidation or reorganization of the Company, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all amounts due
upon all Senior and Subordinated Debt of the Company shall first be paid in
full, or payment thereof provided for in money in accordance with its terms,
before any payment is made by the Company on account of the principal or
interest on the Junior Subordinated Debentures; and upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders or the Trustee would be entitled to
receive from the Company, except for the provisions of this Article Sixteen,
shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders or by the Trustee under the Indenture if received by them or
it, directly to the holders of Senior and Subordinated Debt of the Company (pro
rata to such holders on the basis of the respective amounts of Senior and
Subordinated Debt held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior and
Subordinated Debt may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior and Subordinated Debt in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior and Subordinated Debt,
before any payment or distribution is made to the Holders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior and Subordinated Debt of the Company is paid in full,
or provision is made for such payment in money in accordance with its terms,
such payment or distribution shall be held in trust for the benefit of and shall
be paid over or delivered to the holders of such Senior and Subordinated Debt or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior and
Subordinated Debt may have been issued, and their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior and Subordinated Debt of the Company, as the case may be, remaining
unpaid to the extent necessary to pay such Senior and Subordinated Debt in full
in money in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the benefit of the holders of such Senior and
Subordinated Debt.
For purposes of this Article Sixteen, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Sixteen with
respect to the Junior Subordinated Debentures to the payment of all Senior and
Subordinated Debt of the Company, as the case may be, that may at the time be
outstanding, provided that (i) such Senior and Subordinated Debt is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of such Senior and Subordinated
Debt are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article Twelve of this Indenture shall not
be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 16.3 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer,
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comply with the conditions stated in Article Twelve of this Indenture.
Nothing in Section 16.2 or in this Section 16.3 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 9.6 of this Indenture.
16.4 SUBROGATION. Subject to the payment in full of all Senior and
Subordinated Debt of the Company, the rights of the Holders of the Junior
Subordinated Debentures shall be subrogated to the rights of the holders of such
Senior and Subordinated Debt to receive payments or distributions of cash,
property or securities of the Company, as the case may be, applicable to such
Senior and Subordinated Debt until the principal of and interest on the Junior
Subordinated Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior and
Subordinated Debt of any cash, property or securities to which the Holders of
the Junior Subordinated Debentures or the Trustee would be entitled except for
the provisions of this Article Sixteen, and no payment over pursuant to the
provisions of this Article Sixteen to or for the benefit of the holders of such
Senior and Subordinated Debt by Holders of the Junior Subordinated Debentures or
the Trustee, shall, as between the Company, its creditors other than holders of
Senior and Subordinated Debt of the Company, and the Holders of the Junior
Subordinated Debentures, be deemed to be a payment by the Company to or on
account of such Senior and Subordinated Debt. It is understood that the
provisions of this Article Sixteen are and are intended solely for the purposes
of defining the relative rights of the Holders of the Junior Subordinated
Debentures, on the one hand, and the holders of such Senior and Subordinated
Debt on the other hand.
Nothing contained in this Article Sixteen or elsewhere in this Indenture or
in the Junior Subordinated Debentures is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior and Subordinated
Debt of the Company, and the Holders of the Junior Subordinated Debentures, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Junior Subordinated Debentures the principal of and interest on
the Junior Subordinated Debentures as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Junior Subordinated Debentures and
creditors of the Company, other than the holders of Senior and Subordinated Debt
of the Company, nor shall anything herein or therein prevent the Trustee or the
Holder of any Junior Subordinated Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article Sixteen of the holders of such Senior
and Subordinated Debt in respect of cash, property or securities of the Company,
as the case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article Sixteen, the Trustee, subject to the provisions of Section 9.1, and
the Holders of the Junior Subordinated Debentures shall be entitled to
conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Junior Subordinated Debentures, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior and
Subordinated Debt and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Sixteen.
16.5 TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of Junior
Subordinated Debentures by such Holder's acceptance thereof authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Sixteen and appoints the Trustee such Holder's attorney-in-fact for any
and all such purposes.
16.6 NOTICE BY THE COMPANY. The Company shall give prompt written notice
to a Responsible Officer of the Trustee of any fact known to the Company that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Junior Subordinated Debentures pursuant to the provisions of this
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Article Sixteen. Notwithstanding the provisions of this Article Sixteen or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment of monies to or by the Trustee in respect of the Junior Subordinated
Debentures pursuant to the provisions of this Article Sixteen, unless and
until a Responsible Officer of the Trustee shall have received written notice
thereof from the Company or a holder or holders of Senior and Subordinated
Debt or from any trustee therefor; and before the receipt of any such written
notice, the Trustee, subject to the provisions of Section 9.1, shall be
entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for
in this Section 16.6 at least two Business Days prior to the date upon which
by the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of or interest on any Junior
Subordinated Debenture), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 9.1, shall be entitled to
conclusively rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior and Subordinated Debt of the
Company (or a trustee on behalf of such holder), to establish that such notice
has been given by a holder of such Senior and Subordinated Debt or a trustee on
behalf of any such holder or holders. In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of such Senior and Subordinated Debt to participate in any
payment or distribution pursuant to this Article Sixteen, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior and Subordinated Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Sixteen, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
16.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR AND SUBORDINATED DEBT. The
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article Sixteen in respect of any Senior and Subordinated Debt at any
time held by it, to the same extent as any other holder of Senior and
Subordinated Debt, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
With respect to the holders of Senior and Subordinated Debt of the Company,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Sixteen, and no
implied covenants or obligations with respect to the holders of such Senior and
Subordinated Debt shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior and Subordinated Debt and, subject to the provisions of Section 9.1, the
Trustee shall not be liable to any holder of such Senior and Subordinated Debt
if it shall pay over or deliver to Holders of Junior Subordinated Debentures,
the Company or any other Person money or assets to which any holder of such
Senior and Subordinated Debt shall be entitled by virtue of this Article Sixteen
or otherwise.
16.8 SUBORDINATION MAY NOT BE IMPAIRED. No right of any present or future
holder of any Senior and Subordinated Debt of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior and Subordinated Debt of the Company may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders of
the Junior Subordinated Debentures, without incurring responsibility to the
Holders
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of the Junior Subordinated Debentures and without impairing or releasing the
subordination provided in this Article Sixteen or the obligations hereunder
of the Holders of the Junior Subordinated Debentures to the holders of such
Senior and Subordinated Debt, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, such Senior and Subordinated Debt, or otherwise amend
or supplement in any manner such Senior and Subordinated Debt or any
instrument evidencing the same or any agreement under which such Senior and
Subordinated Debt is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing such Senior
and Subordinated Debt; (iii) release any Person liable in any manner for the
collection of such Senior and Subordinated Debt; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
COMMUNITY FIRST BANKSHARES, INC.
By: ______________________________________________
Name: Donald R. Mengedoth
Title: President and Chief Executive Officer
WILMINGTON TRUST COMPANY,
AS TRUSTEE
By: _____________________________________________
Name: ___________________________________________
Title: __________________________________________
STATE OF MINNESOTA )
) ss:
COUNTY OF HENNEPIN )
On the _______ day of ____________, 1997, before me personally came Donald
R. Mengedoth, to me known, who, being by me duly sworn, did depose and say that
he is the President and Chief Executive Officer of COMMUNITY FIRST BANKSHARES,
INC., one of the corporations described in and which executed the above
instrument; and that he signed his name thereto on behalf of said corporation by
authority of the Board of Directors of said corporation.
__________________________________________________
Notary Public
STATE OF DELAWARE )
) ss:
COUNTY OF _________ )
On the _______ day of___________, 1997, before me personally came
______________________, to me known, who, being by me duly sworn, did depose and
say that he/she is the _______________________ of WILMINGTON TRUST COMPANY, one
of the corporations described in and which executed the above instrument; and
that he/she signed his/her name thereto on behalf of said corporation by
authority of the Board of Directors of said corporation.
__________________________________________________
Notary Public
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EXHIBIT A
(FORM OF FACE OF JUNIOR SUBORDINATED DEBENTURE)
This Junior Subordinated Debenture is a Global Subordinated Debenture
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 Junior
Subordinated Debenture is exchangeable for Junior Subordinated Debentures
registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Indenture, and no transfer
of this Junior Subordinated Debenture (other than a transfer of this Junior
Subordinated Debenture 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) may be registered except in such limited
circumstances.
Unless this Junior Subordinated Debenture is presented by an authorized
representative of Wilmington Trust Company (Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001) to the issuer or its agent
for registration of transfer, exchange or payment, and any Junior
Subordinated Debenture issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of Wilmington Trust
Company (and any payment hereon is made to Cede & Co. or to such other entity
as is requested by an authorized representative of Wilmington Trust Company),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch the registered owner hereof, Cede & Co., has an
interest herein.
Registered Principal Amount:
Registered No. _______________________ $_______________________________
CUSIP No.______________________________
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COMMUNITY FIRST BANKSHARES, INC.
___% JUNIOR SUBORDINATED DEBENTURE
DUE JANUARY 15, 2027
Community First Bankshares, Inc., a Delaware corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ______________ or
registered assigns, the principal sum of _____________ Dollars ($___________)
on ____________, 2027 (which date may be extended as provided in the
Indenture, the "Stated Maturity"), and to pay interest on said principal sum
from ___________, 1997, or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on the 15th day of April, July, October, and January in each year
commencing April 15, 1997, at the rate of ___% per annum until the principal
hereof shall have become due and payable, and on any overdue principal 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 quarterly. The amount of each interest
payment due with respect to the Junior Subordinated Debentures will include
amounts accrued through the date the interest payment is due. 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. In the event that any date on
which interest is payable on this Junior Subordinated Debenture is not a
business day, then payment of 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 business
day is in the next succeeding calendar year, such payment shall be made on
the immediately preceding business day, in each case with the same force and
effect as if made on such date. 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 Junior
Subordinated Debenture (or one or more Predecessor Securities, as defined in
the Indenture) is registered at the close of business on the regular record
date for such interest installment, which shall be the close of business on
the business day next preceding such Interest Payment Date unless otherwise
provided in the Indenture. The principal of and the interest on this Junior
Subordinated Debenture shall be payable at the office or agency of the
Trustee (as defined in the Indenture) maintained for that purpose in any coin
or currency of the United States of America that at the time of payment is
legal tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed
to the registered Holder (as defined in the Indenture) at such address as
shall appear in the Securities Register (as defined in the Indenture).
Notwithstanding the foregoing, so long as the Holder of this Junior
Subordinated Debenture is the Property Trustee (as defined in the Indenture),
the payment of the principal of and interest on this Junior Subordinated
Debenture will be made at such place and to such account as may be designated
by the Property Trustee.
The Stated Maturity may be shortened at any time by the Company to any date
not earlier than ____________, 2002, subject to the Company having received
prior approval of the Federal Reserve (as defined in the Indenture) if then
required under applicable capital guidelines or policies of the Federal Reserve.
The indebtedness evidenced by this Junior Subordinated Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior and Subordinated Debt (as defined in the
Indenture), and this Junior Subordinated Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Junior
Subordinated Debenture, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained
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herein and in the Indenture by each holder of Senior and Subordinated Debt,
whether now outstanding or hereafter incurred, and waives reliance by each
such holder upon said provisions.
This Junior Subordinated Debenture shall not be entitled to any benefit
under the Indenture, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Junior Subordinated Debenture are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated: _____________________ COMMUNITY FIRST BANKSHARES, INC.
By: _____________________________________________
Name: Donald R. Mengedoth
Title: President and Chief Executive Officer
Attest: By: _____________________________________________
Name:
Title: Secretary
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[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Junior Subordinated Debentures described in the
within-mentioned Indenture.
Dated:_________________________ WILMINGTON TRUST COMPANY, as Trustee
By: _____________________________________________
Authorized Signature
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[FORM OF REVERSE OF JUNIOR SUBORDINATED DEBENTURE]
_____% JUNIOR SUBORDINATED DEBENTURE
(CONTINUED)
This Junior Subordinated Debenture is one of the junior subordinated
debentures of the Company (herein sometimes referred to as the "Junior
Subordinated Debentures"), specified in the Indenture, all issued under and
pursuant to a Subordinated Indenture dated as of ____________, 1997 (the
"Indenture") duly executed and delivered between the Company and Wilmington
Trust Company, 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 Junior Subordinated Debentures. The Junior Subordinated Debentures are
limited in aggregate principal amount as specified in the Indenture.
Because of the occurrence and continuation of a Special Event (as defined
in the Indenture), in certain circumstances, this Junior Subordinated Debenture
may become due and payable at the option of the Company at the principal amount
together with any interest accrued thereon (the "Redemption Price"). The
Redemption Price shall be paid prior to 2:00 p.m. Fargo Time on the date of such
redemption or at such earlier time as the Company determines.
The Company shall have the right to redeem this Junior Subordinated
Debenture at the option of the Company, in whole or in part, from time to time,
on or after ____________, 2002, at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued but unpaid interest thereon to
the date of such redemption. Any redemption pursuant to this paragraph will be
made upon not less than 30 days nor more than 60 days notice. If the Junior
Subordinated Debentures are only partially redeemed by the Company pursuant to
this paragraph, the Junior Subordinated Debentures will be redeemed pro rata or
by lot or by any other method utilized by the Trustee; provided that if, at the
time of redemption, the Junior Subordinated Debentures are registered as a
Global Subordinated Debenture (as defined in the Indenture), the Depositary (as
defined in the Indenture) shall determine the principal amount of such Junior
Subordinated Debentures held by each Junior Subordinated Debenture Holder to be
redeemed in accordance with its procedures.
In the event of redemption of this Junior Subordinated Debenture in part
only, a new Junior Subordinated Debenture for the unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default (as defined in the Indenture), shall have
occurred and be continuing, the principal of all of the Junior Subordinated
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Junior Subordinated Debentures at the time Outstanding,
as defined in the Indenture, to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Holders of the Junior Subordinated Debentures;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity of the Junior Subordinated Debentures except as provided in the
Indenture, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, without the consent of the Holder of
each Junior Subordinated Debenture so affected, or (ii) reduce the aforesaid
percentage of Junior Subordinated Debentures, the Holders of which are required
to consent to any such supplemental indenture, without the consent of the
Holders of each Junior Subordinated Debenture then Outstanding and affected
thereby. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Junior Subordinated
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Debentures at the time Outstanding, on behalf of all of the Holders of the
Junior Subordinated Debentures, to waive any past default in the performance
of any of the covenants contained in the Indenture, or established pursuant
to the Indenture, and its consequences, except a default in the payment of
the principal of or interest on any of the Junior Subordinated Debentures.
Any such consent or waiver by the registered Holder of this Junior
Subordinated Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and
owners of this Junior Subordinated Debenture and of any Junior Subordinated
Debenture issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Junior Subordinated
Debenture.
No reference herein to the Indenture and no provision of this Junior
Subordinated Debenture or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of and
interest on this Junior Subordinated Debenture at the time and place and at the
rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Junior Subordinated Debentures and from time to time to extend the interest
payment period of such Junior Subordinated Debentures for up to 20
consecutive quarters (an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Junior
Subordinated Debentures to the extent that payment of such interest is
enforceable under applicable law). Before the termination of any such
Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended Interest
Payment Period together with all such further extensions thereof shall not
exceed 20 consecutive quarters or extend beyond the Stated Maturity. At the
termination of any such Extended Interest Payment Period and upon the payment
of all accrued and unpaid interest and any additional amounts then due, the
Company may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Junior Subordinated Debenture is transferable by the registered
Holder hereof on the Securities Register of the Company, upon surrender of this
Junior Subordinated Debenture for registration of transfer at the office or
agency of the Trustee accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or such Holder's attorney duly authorized in writing,
and thereupon one or more new Junior Subordinated Debentures of authorized
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be made for any
such transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Junior
Subordinated Debenture, the Company, the Trustee, any paying agent and the
Securities Registrar (as defined in the Indenture) may deem and treat the
registered holder hereof as the absolute owner hereof (whether or not this
Junior Subordinated Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Securities
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Securities
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Junior Subordinated Debenture, or for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule
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of law, or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.
The Junior Subordinated Debentures are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof.
This Global Subordinated Debenture is exchangeable for Junior Subordinated
Debentures in definitive form only under certain limited circumstances set
forth in the Indenture. Junior Subordinated Debentures so issued are
issuable only in registered form without coupons in denominations of $25 and
any integral multiple thereof.
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CERTIFICATE OF TRUST
OF
CFB CAPITAL I
This Certificate of Trust of CFB CAPITAL I (the "Trust"), dated January 14,
1997, is being duly executed and filed by Wilmington Trust Company, a Delaware
banking corporation, and Donald R. Mengedoth, Mark A. Anderson, and Ronald K.
Strand, each an individual, 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 CFB Capital I.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attn:
Corporate Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon its
filing.
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
WILMINGTON TRUST COMPANY,
as Trustee
By:
-------------------------------
Name:
Title:
----------------------------------
Donald R. Mengedoth, as Trustee
----------------------------------
Mark A. Anderson, as Trustee
----------------------------------
Ronald K. Strand, as Trustee
<PAGE>
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of January 14, 1997 (this "Trust
Agreement"), among (i) Community First Bankshares, Inc., a Delaware corporation
(the "Depositor"), (ii) Wilmington Trust Company, a Delaware banking
corporation, as trustee, and (iii) Donald R. Mengedoth, Mark A. Anderson, and
Ronald K. Strand, each an individual, as trustees (each of such trustees in (ii)
and (iii) a "Trustee" and collectively, the "Trustees"). The Depositor and the
Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as "CFB Capital
I" in which name the Trustees, or the Depositor to the extent provided herein,
may engage in the transactions contemplated hereby, make and execute contracts,
and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of Ten Dollars ($10.00). The Trustees hereby acknowledge
receipt of such amount in trust from the Depositor, which amount shall
constitute the initial trust estate. The Trustees hereby declare that they will
hold the trust estate in trust for the Depositor. It is the intention of the
parties hereto that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801, et seq.
(the "Business Trust Act"), and that this document constitutes the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Delaware Secretary of State in
accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and restated
Trust Agreement, satisfactory to each such party and substantially in the form
included as an exhibit to the 1933 Act Registration Statement (as defined
below), to provide for the contemplated operation of the Trust created hereby
and the issuance of the Capital Securities and Common Securities referred to
therein. Prior to the execution and delivery of such amended and restated Trust
Agreement, the Trustees shall not have any duty or obligation hereunder or with
respect to the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery any licenses,
consents or approvals required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the registration
under the Securities Act of 1933, as amended, of the Capital Securities of the
Trust and possibly certain other securities and (b) if required, a Registration
Statement on Form 8-A (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to the
registration of the Capital Securities of the Trust under the Securities
Exchange Act of 1934, as amended; (ii) to file with the Nasdaq National Market
or a national stock exchange (each, an "Exchange") and execute on behalf of the
Trust one or more listing applications and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the Capital Securities to be listed on any of the Exchanges;
(iii) to file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for service of
process and other
<PAGE>
papers and documents as shall be necessary or desirable to register the Capital
Securities under the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable; and (iv) to
execute on behalf of the Trust that certain Underwriting Agreement relating to
the Capital Securities, among the Trust, the Depositor and the Underwriter named
therein, substantially in the form included as an exhibit to the 1933 Act
Registration Statement. In the event that any filing referred to in clauses
(i), (ii) and (iii) above is required by the rules and regulations of the
Commission, an Exchange or state securities or blue sky laws to be executed on
behalf of the Trust by one or more of the Trustees, each of the Trustees, in
such Trustee's capacity as a Trustee of the Trust, is hereby authorized and, to
the extent so required, directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that
Wilmington Trust Company in its capacity as a Trustee of the Trust shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the
Exchange or state securities or blue sky laws. In connection with the filings
referred to above, the Depositor and Donald R. Mengedoth, Mark A. Anderson, and
Ronald K. Strand, each as Trustees and not in their individual capacities,
hereby constitutes and appoints Donald R. Mengedoth, Mark A. Anderson and Ronald
K. Strand, and each of them, as the Depositor's or such Trustee's true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the Depositor or such Trustee or in the Depositor's or such
Trustee's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act Registration
Statement and the 1934 Act Registration Statement (if required) and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, the Exchange and administrators of the state securities or
blue sky laws, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully and to all intents and purposes as
the Depositor or such Trustee might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
respective substitute or substitutes, shall do or cause to be done by virtue
hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be four and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Depositor which may increase or decrease the
number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty (30) days' prior notice to the
Depositor.
7. This Trust Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without regard to conflict of laws of
principles).
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
COMMUNITY FIRST BANKSHARES, INC.
as Depositor
By:
-----------------------------
Name: Donald R. Mengedoth
Title: President
WILMINGTON TRUST COMPANY,
as Trustee
By:
-----------------------------
Name:
Title:
By:
----------------------------
Donald R. Mengedoth, as
Trustee
By:
----------------------------
Mark A. Anderson, as Trustee
By:
----------------------------
Ronald K. Strand, as Trustee
3
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CFB CAPITAL I
------------------------------------------------
AMENDED AND RESTATED
TRUST AGREEMENT
------------------------------------------------
AMONG
COMMUNITY FIRST BANKSHARES, INC., AS DEPOSITOR
WILMINGTON TRUST COMPANY, AS PROPERTY TRUSTEE
WILMINGTON TRUST COMPANY, AS DELAWARE TRUSTEE
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF ____________, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I.
DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 101. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE II.
ESTABLISHMENT OF THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 201. NAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 202. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS. . . 10
SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 204. ISSUANCE OF THE CAPITAL SECURITIES . . . . . . . . . . . . . . . 11
SECTION 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE
OF JUNIOR SUBORDINATED DEBENTURES. . . . . . . . . . . . . . . . . . . . 11
SECTION 206. DECLARATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS . . . . . . . . 12
SECTION 208. ASSETS OF TRUST. . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 209. TITLE TO TRUST PROPERTY. . . . . . . . . . . . . . . . . . . . . 15
ARTICLE III.
PAYMENT ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 301. PAYMENT ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 401. DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 402. REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 403. SUBORDINATION OF COMMON SECURITIES . . . . . . . . . . . . . . . 19
SECTION 404. PAYMENT PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 405. TAX RETURNS AND REPORTS. . . . . . . . . . . . . . . . . . . . . 19
SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST. . . . . . . . . . . 20
SECTION 407. PAYMENTS UNDER INDENTURE . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V.
TRUST SECURITIES CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . 20
i
<PAGE>
SECTION 501. INITIAL OWNERSHIP. . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 502. THE TRUST SECURITIES CERTIFICATES. . . . . . . . . . . . . . . . 20
SECTION 503. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES. . . . . 21
SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF CAPITAL SECURITIES
CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 506. PERSONS DEEMED SECURITYHOLDERS . . . . . . . . . . . . . . . . . 22
SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES . . . . . 22
SECTION 508. MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . . . . . 23
SECTION 509. APPOINTMENT OF PAYING AGENT. . . . . . . . . . . . . . . . . . . 23
SECTION 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. . . . . . . . . . . 24
SECTION 511. BOOK-ENTRY CAPITAL SECURITIES CERTIFICATES; COMMON SECURITIES
CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 512. NOTICES TO CLEARING AGENCY . . . . . . . . . . . . . . . . . . . 25
SECTION 513. DEFINITIVE CAPITAL SECURITIES CERTIFICATES . . . . . . . . . . . 25
SECTION 514. RIGHTS OF SECURITYHOLDERS. . . . . . . . . . . . . . . . . . . . 25
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING. . . . . . . . . . . . . . . . . . . 26
SECTION 601. LIMITATIONS ON VOTING RIGHTS . . . . . . . . . . . . . . . . . . 26
SECTION 602. NOTICE OF MEETINGS . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 603. MEETINGS OF HOLDERS OF CAPITAL SECURITIES. . . . . . . . . . . . 28
SECTION 604. VOTING RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 605. PROXIES, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT . . . . . . . . . . . . 28
SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES. . . . . . . . . . . . 29
SECTION 608. ACTS OF SECURITYHOLDERS. . . . . . . . . . . . . . . . . . . . . 29
SECTION 609. INSPECTION OF RECORDS. . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE PROPERTY
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 702. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK AND THE
DELAWARE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 703. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR. . . . . . . . . . . 32
ARTICLE VIII.
THE TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ii
<PAGE>
SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES. . . . . . . . . . . . . . . 33
SECTION 802. CERTAIN NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE . . . . . . . . . . . . . . . 34
SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES . . . . . 36
SECTION 805. MAY HOLD SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 806. COMPENSATION; INDEMNITY; FEES. . . . . . . . . . . . . . . . . . 37
SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES . . 37
SECTION 808. CONFLICTING INTERESTS. . . . . . . . . . . . . . . . . . . . . . 38
SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE . . . . . . . . . . . . . . . . 38
SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. . . . . . . . 39
SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR . . . . . . . . . . . . . 41
SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. . . 41
SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST . . 41
SECTION 814. REPORTS BY PROPERTY TRUSTEE. . . . . . . . . . . . . . . . . . . 42
SECTION 815. REPORTS TO THE PROPERTY TRUSTEE. . . . . . . . . . . . . . . . . 42
SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT . . . . . . . . 42
SECTION 817. NUMBER OF TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 818. DELEGATION OF POWER. . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 819. VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER. . . . . . . . . . . . . . . . . . . . . . 43
SECTION 901. TERMINATION UPON EXPIRATION DATE . . . . . . . . . . . . . . . . 44
SECTION 902. EARLY TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 903. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 904. LIQUIDATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE X.
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS . . . . . . . . . . . . 47
SECTION 1002. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 1003. SEPARABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1004. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY. . . . . . . . . . . . . . . . 49
SECTION 1006. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
iii
<PAGE>
SECTION 1007. HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 1008. REPORTS, NOTICES AND DEMANDS. . . . . . . . . . . . . . . . . . 49
SECTION 1009. AGREEMENT NOT TO PETITION . . . . . . . . . . . . . . . . . . . 50
SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT. . . . . 50
SECTION 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Capital Securities Certificate
iv
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of ______, 1997, among (i)
Community First Bankshares, Inc., a Delaware corporation (including any
successors or assigns, the "Depositor"), (ii) Wilmington Trust Company, a
Delaware banking corporation duly organized and existing under the laws of
the State of Delaware, as property trustee (the "Property Trustee" and, in
its separate corporate capacity and not in its capacity as Property Trustee,
the "Bank"), (iii) Wilmington Trust Company, a Delaware banking corporation
duly organized and existing under the laws of the State of Delaware, as
Delaware trustee (the "Delaware Trustee," and, in its separate corporate
capacity and not in its capacity as Delaware Trustee, the "Delaware Bank"),
(iv) Donald R. Mengedoth, an individual, and Mark A. Anderson, an
individual, and Ronald K. Strand, an individual, each of whose address is c/o
Community First Bankshares, Inc. (each an "Administrative Trustee" and
collectively the "Administrative Trustees") (the Property Trustee, the
Delaware Trustee and the Administrative Trustees referred to collectively as
the "Trustees") and (v) the several Holders, as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor, the Delaware Trustee, and Donald R. Mengedoth,
Mark A. Anderson, and Ronald K. Strand, each as an Administrative Trustee,
have heretofore duly declared and established a business trust pursuant to
the Delaware Business Trust Act by the entering into of that certain Trust
Agreement, dated as of January __, 1997 (the "Original Trust Agreement"), and
by the execution and filing by the Delaware Trustee, the Depositor and the
Administrative Trustees with the Secretary of State of the State of Delaware
of the Certificate of Trust, filed on January __, 1997, the form of which is
attached as EXHIBIT A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property Trustee and
the Administrative Trustees desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities by the Trust to the
Depositor, (ii) the issuance and sale of the Capital Securities by the Trust
pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Junior
Subordinated Debentures and (iv) the appointment of the Property Trustee;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, each party, for the benefit of the other
parties and for the benefit of the Securityholders, hereby amends and
restates the Original Trust Agreement in its entirety and agrees as follows:
1
<PAGE>
ARTICLE I.
DEFINED TERMS
SECTION 101. DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(c) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or a Section, as the case may be, of this
Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 608.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of additional interest
accrued on interest in arrears and paid by the Depositor on a Like Amount of
Junior Subordinated Debentures for such period.
"Additional Sums" has the meaning specified in Section 2.5 of the
Indenture.
"Administrative Trustee" means each of Donald R. Mengedoth, Mark A.
Anderson, and Ronald K. Strand, solely in such person's capacity as
Administrative Trustee of the Trust formed and continued hereunder and not in
such person's individual capacity, or such Administrative Trustee's successor
in interest in such capacity, or any successor Administrative Trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
2
<PAGE>
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of or in
respect of such Person under the Federal Bankruptcy Code or any other similar
applicable Federal or State law, and the continuance of any such decree or
order unvacated and unstayed for a period of 90 days; or the commencement of
an involuntary case under the Federal Bankruptcy Code in respect of such
Person, which shall continue undismissed for a period of 90 days or entry of
an order for relief in such case; or the entry of a decree or order of a
court having jurisdiction in the premises for the appointment on the ground
of insolvency or bankruptcy of a receiver, custodian, liquidator, trustee or
assignee in bankruptcy or insolvency of such Person or of its property, or
for the winding up or liquidation of its affairs, and such decree or order
shall have remained in force unvacated and unstayed for a period of 90 days;
or
(b) the institution by such Person of proceedings to be adjudicated a
voluntary bankrupt, or the consent by such Person to the filing of a
bankruptcy proceeding against it, or the filing by such Person of a petition
or answer or consent seeking liquidation or reorganization under the Federal
Bankruptcy Code or other similar applicable Federal or State law, or the
consent by such Person to the filing of any such petition or to the
appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or trustee or assignee in bankruptcy or insolvency of
such Person or of its property, or such Person shall make a general
assignment for the benefit of creditors.
"Bankruptcy Laws" has the meaning specified in Section 1009.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors, or such committee of the Board
of Directors or officers of the Depositor to which authority to act on behalf
of the Board of Directors has been delegated, and to be in full force and
effect on the date of such certification, and delivered to the appropriate
Trustee.
"Book-Entry Capital Securities Certificates" means certificates
representing Capital Securities issued in global, fully registered form to
the Clearing Agency as described in Section 511.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in the State of Minnesota are authorized or
required by law or executive order to remain closed, or (c) a day on which
the Property Trustee's Corporate Trust Office or the Corporate Trust Office
of the Debenture Trustee is closed for business.
"Capital Securities Certificate" means a certificate evidencing ownership
of Capital Securities, substantially in the form attached as EXHIBIT E.
"Certificate Depository Agreement" means the agreement among the Trust,
the Depositor and The Depositary Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as EXHIBIT B, as the same
may be amended and supplemented from time to time.
3
<PAGE>
"Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.
The Depositary Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this Trust Agreement such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means a common undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing ownership
of Common Securities, substantially in the form attached as EXHIBIT C.
"Corporate Trust Office" means the principal corporate trust office of
the Property Trustee located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware, 19890-0001, Attn: Corporate Trust
Administration.
"Debenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Debenture Redemption Date" means, with respect to any Junior
Subordinated Debentures to be redeemed under the Indenture, the date fixed
for redemption under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation organized under the laws of the State of Delaware and any
successor thereto, as trustee under the Indenture.
"Definitive Capital Securities Certificates" means either or both (as the
context requires) of (a) Capital Securities Certificates issued as Book-Entry
Capital Securities Certificates as provided in Section 511(a), and (b) Capital
Securities Certificates issued in certificated, fully registered form as
provided in Section 513.
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"Delaware Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Delaware Code Sections 3801 et seq as it may be amended
from time to time.
"Delaware Trustee" means the commercial bank or trust company identified
as the "Delaware Trustee" in the preamble to this Trust Agreement solely in
its capacity as Delaware Trustee of the Trust formed and continued hereunder
and not in its individual capacity, or its successor in interest in such
capacity, or any successor Delaware Trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 401(a).
"Distributions" means amounts payable in respect of the Trust Securities
as provided in Section 401.
"Event of Default" means any one of the following events shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(c) default by the Trust in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Property Trustee in this Trust Agreement
(other than a covenant or warranty, a default in the performance of which or
the breach of which is dealt with in clause (b) or (c), above) and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Property
Trustee by the Holders of at least 25% in aggregate Liquidation Amount of the
Outstanding Capital Securities a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property
Trustee within 60 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
EXHIBIT D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 901.
"Extension Period" means the "Extended Interest Payment Period" as
defined in the Indenture.
"Global Subordinated Debenture" has the meaning specified in the
Indenture.
"Guarantee" means the Capital Securities Guarantee Agreement executed and
delivered by the Depositor and Wilmington Trust Company as trustee,
contemporaneously with the execution and delivery of this Trust Agreement,
for the benefit of the holders of the Capital Securities, as amended from
time to time.
"Holder" means a Securityholder.
"Indenture" means the Subordinated Indenture, dated as of __________,
1997, between the Depositor and the Debenture Trustee, as trustee, as amended
or supplemented from time to time.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Company Event" means the receipt by the Depositor and the
Trust of an Opinion of Counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a
"Change in Investment Company Act Law"), the Trust is or will be considered
an "investment company" that is required to be registered under the
Investment Company Act, which Change in Investment Company Act Law becomes
effective on or after the date of original issuance of the Capital Securities
under this Trust Agreement.
"Junior Subordinated Debentures" means the $____________ aggregate
principal amount of the Depositor's ____% Junior Subordinated Debentures,
issued pursuant to the Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Junior Subordinated Debentures to be contemporaneously redeemed in accordance
with the Indenture and the proceeds of which will be used to pay the Redemption
Price of such Trust Securities and (b) with respect to a distribution of Junior
Subordinated Debentures to Holders of Trust Securities in connection with a
termination or liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the
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Liquidation Amount of the Trust Securities of the Holder to whom such Junior
Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Liquidation Date" means the date on which Junior Subordinated Debentures
are to distributed to Holders of Trust Securities in connection with a
termination and liquidation of the Trust pursuant to Section 904(a).
"Liquidation Distribution" has the meaning specified in Section 904(d).
"Officers' Certificate" means a certificate signed by the President or a
Vice President and by the Chief Financial Officer or the Controller or an
Assistant Controller or the Secretary or an Assistant Secretary, of the
Depositor, and delivered to the appropriate Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 816 shall be the
principal executive, financial or accounting officer of the Depositor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee, the Delaware Trustee or the Depositor, but
not an employee of any thereof, and who shall be reasonably acceptable to the
Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Capital Securities, means, as of
the date of determination, all Capital Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Capital Securities theretofore cancelled by the Property Trustee or
delivered to the Property Trustee for cancellation;
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(b) Capital Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or
any Paying Agent for the Holders of such Capital Securities; provided that,
if such Capital Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Trust Agreement; and
(c) Capital Securities which have been paid or in exchange for or in
lieu of which other Capital Securities have been executed and delivered
pursuant to Sections 504, 505, 511 and 513; provided, however, that in
determining whether the Holders of the requisite Liquidation Amount of the
Outstanding Capital Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Capital Securities owned by
the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee
shall be disregarded and deemed not to be Outstanding, except that (i) in
determining whether any Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Capital Securities that such Trustee knows to be so owned shall be so
disregarded and (ii) the foregoing shall not apply at any time when all of
the Outstanding Capital Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. Capital Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right as to such Capital Securities so owned.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Capital Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such
Clearing Agency (directly or indirectly, in accordance with the rules of such
Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 509 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid
in respect of the Junior Subordinated Debentures will be held and from which
the Property Trustee shall make payments to the Securityholders in accordance
with Sections 401 and 402.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization
or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, designated "____% Cumulative Capital Securities," having a
Liquidation Amount of $25 and having the rights provided therefor in this
Trust Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Property Trustee" means the commercial bank or trust company identified as
the "Property Trustee" in the preamble to this Trust Agreement solely in its
capacity as Property Trustee of the
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Trust heretofore formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
Property Trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated
maturity of the Junior Subordinated Debentures shall be a Redemption Date for
a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security to be
redeemed, the Liquidation Amount of such Trust Security, plus accumulated and
unpaid Distributions to the Redemption Date allocated on a pro rata basis
(based on Liquidation Amounts) among the Trust Securities to be redeemed.
"Relevant Trustee" shall have the meaning specified in Section 810.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 504.
"Securityholder" means a Person in whose name a Trust Security or
Securities is registered in the Securities Register; any such Person is a
beneficial owner within the meaning of the Delaware Business Trust Act.
"Tax Event" means the receipt by the Depositor or 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
which pronouncement or decision is announced on or after the date of issuance
of the Capital Securities under this Trust Agreement, or the Junior
Subordinated Debentures under the Indenture, as the case may be, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days after the date of such Opinion of Counsel, subject to United States
federal income tax with respect to income received or accrued on the Junior
Subordinated Debentures, (ii) interest payable by the Depositor on the Junior
Subordinated Debentures is not, or within 90 days after the date of such
Opinion of Counsel will not be, deductible by the Depositor, in whole or in
part, for United States federal income tax purposes or (iii) the Trust is, or
will be within 90 days after the date of such Opinion of Counsel, subject to
more than a de minimis amount of other taxes, duties, assessments or other
governmental charges.
"Trust" means the Delaware business trust created and continued hereby
and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes of
this Trust Agreement and any such modification,
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amendment or supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Trust Agreement and any such
modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this Trust Agreement was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Junior Subordinated Debentures, (b) the
rights of the Property Trustee under the Guarantee, (c) any cash on deposit
in, or owing to, the Payment Account and (d) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant to the trusts of
this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
_________, 1997, among the Trust, the Depositor and the Underwriters named
therein.
ARTICLE II.
ESTABLISHMENT OF THE TRUST
SECTION 201. NAME.
The Trust created and continued hereby shall be known as "CFB Capital I,"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may engage in the transactions
contemplated hereby, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 202. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS.
The address of the Delaware Trustee in the State of Delaware is c/o
Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware
19890, Attention: Corporate Trust Administration, or such other address in
the State of Delaware as the Delaware Trustee may designate by written notice
to the Securityholders and the Depositor. The principal executive office of
the Trust is c/o Community First Bankshares, Inc., 520 Main Avenue, Fargo,
North Dakota 58124-0001.
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SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES.
The Trustees acknowledge receipt in trust from the Depositor in connection
with the Original Trust Agreement of the sum of $10, which constituted the
initial Trust Property. The Depositor shall pay organizational expenses of the
Trust as they arise or shall, upon request of any Trustee, promptly reimburse
such Trustee for any such expenses paid by such Trustee. The Depositor shall
make no claim upon the Trust Property for the payment of such expenses.
SECTION 204. ISSUANCE OF THE CAPITAL SECURITIES.
On ____________, 1997, the Depositor and an Administrative Trustee, on
behalf of the Trust and pursuant to the Original Trust Agreement, executed and
delivered the Underwriting Agreement. Contemporaneously with the execution and
delivery of this Trust Agreement, an Administrative Trustee, on behalf of the
Trust, shall execute in accordance with Section 502 and deliver, in accordance
with the Underwriting Agreement, Capital Securities Certificates, registered in
the name of the nominee of the initial Clearing Agency, in an aggregate amount
of Capital Securities having an aggregate Liquidation Amount of $________
against receipt of the aggregate purchase price of such Capital Securities of
$_________, which amount such Administrative Trustee shall promptly deliver to
the Property Trustee.
SECTION 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE
OF JUNIOR SUBORDINATED DEBENTURES.
Contemporaneously with the execution and delivery of this Trust Agreement,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 502 and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of Common
Securities having an aggregate Liquidation Amount of $________ against payment
by the Depositor of such amount. Contemporaneously therewith, an Administrative
Trustee, on behalf of the Trust, shall subscribe to and purchase from the
Depositor Junior Subordinated Debentures, registered in the name of the Property
Trustee on behalf of the Trust and having an aggregate principal amount equal to
$________, and, in satisfaction of the purchase price for such Junior
Subordinated Debentures, the Property Trustee, on behalf of the Trust, shall
deliver to the Depositor the sum of $_________.
SECTION 206. DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Junior
Subordinated Debentures, and (b) to engage in those activities necessary,
convenient or incidental thereto. The Depositor hereby appoints the Trustees as
trustees of the Trust, to have all the rights, powers and duties to the extent
set forth herein, and the Trustees hereby accept such appointment. The Property
Trustee hereby declares that it will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the benefit of the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of
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the Trust. The Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust
for the sole and limited purpose of fulfilling the requirements of Section
3807 of the Delaware Business Trust Act.
SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section and Article VIII, and in accordance with the
following provisions (i) and (ii), the Administrative Trustees shall have the
authority to enter into all transactions and agreements determined by the
Administrative Trustees to be appropriate in exercising the authority, express
or implied, otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:
(i) As among the Trustees, each Administrative Trustee, acting singly
or jointly, shall have the power and authority to act on behalf of the
Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, the Expense Agreement and the
Certificate Depository Agreement and such other agreements or
documents as may be necessary or desirable in connection with the
purposes and function of the Trust;
(C) assisting in the registration of the Capital Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(D) assisting in the listing of the Capital Securities upon the
Nasdaq National Market or such securities exchange or exchanges as
shall be determined by the Depositor and, if required, the
registration of the Capital Securities under the Securities Exchange
Act of 1934, as amended, and the preparation and filing of all
periodic and other reports and other documents pursuant to the
foregoing;
(E) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Junior
Subordinated Debentures to the Securityholders in accordance with this
Trust Agreement;
(F) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
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(G) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(H) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under
the laws of the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited liability of
the Holders of the Capital Securities or to enable the Trust to effect
the purposes for which the Trust was created; and
(I) the taking of any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is necessary
or advisable to give effect to the terms of this Trust Agreement for
the benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Junior Subordinated Debentures;
(C) the collection of interest, principal and any other payments
made in respect of the Junior Subordinated Debentures in the Payment
Account;
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities in accordance with the terms of this
Trust Agreement;
(E) the exercise of all of the rights, powers and privileges of
a holder of the Junior Subordinated Debentures;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Junior Subordinated Debentures
to the Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with
the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust;
(I) after an Event of Default the taking of any action
incidental to the foregoing as the Property Trustee may from time to
time determine is necessary or
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advisable to give effect to the terms of this Trust Agreement and
protect and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such
action on any particular Securityholder);
(J) so long as the Property Trustee is the Securities Registrar,
registering transfers of the Trust Securities in accordance with this
Trust Agreement; and
(K) except as otherwise provided in this Section 207(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
207(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein, (iii) take any action that would cause the
Trust to fail or cease to qualify as a "grantor trust" for United States federal
income tax purposes, (iv) incur any indebtedness for borrowed money or issue any
other debt or (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Administrative Trustees
shall defend all claims and demands of all Persons at any time claiming any Lien
on any of the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Capital Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Capital Securities and the Junior
Subordinated Debentures, including any amendments thereto;
(ii) the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Capital
Securities and to do any and all such acts, other than actions which must
be taken by or on behalf of the Trust, and advise the Trustees of actions
they must take on behalf of the Trust, and prepare for execution and filing
any documents to be executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such states;
(iii) the preparation for filing by the Trust and execution on
behalf behalf of the Trust of an application to the Nasdaq National
Market or a national stock exchange or other organizations for listing
upon notice of issuance of any Capital Securities and to file or cause
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an Administrative Trustee to file thereafter with such exchange or
organization such notifications and documents as may be necessary from
time to time;
(iv) if required, the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a registration
statement on Form 8-A relating to the registration of the Capital
Securities under Section 12(b) or 12(g) of the Exchange Act, including any
amendments thereto;
(v) the negotiation of the terms of, and the execution and delivery
of, the Underwriting Agreement providing for the sale of the Capital
Securities; and
(vi) the taking of any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the Investment Company Act, will be
classified as a "grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes and so that the Junior
Subordinated Debentures will be treated as indebtedness of the Depositor for
United States federal income tax purposes. In this connection, subject to
Section 1002, the Depositor and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law or this Trust Agreement,
that each of the Depositor and the Administrative Trustees determines in their
discretion to be necessary or desirable for such purposes.
SECTION 208. ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
SECTION 209. TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Securityholders in accordance with
this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT
SECTION 301. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits
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and withdrawals from the Payment Account in accordance with this Trust
Agreement. All monies and other property deposited or held from time to time
in the Payment Account shall be held by the Property Trustee in the Payment
Account for the exclusive benefit of the Securityholders and for distribution
as herein provided, including (and subject to) any priority of payments
provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Junior Subordinated Debentures.
Amounts held in the Payment Account shall not be invested by the Property
Trustee pending distribution thereof.
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 401. DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be cumulative, and will
accumulate whether or not there are funds of the Trust available for the payment
of Distributions. Distributions shall accumulate from __________, 1997, and,
except during any Extension Period with respect to the Junior Subordinated
Debentures, shall be payable quarterly in arrears on the 15th day of April,
July, October, and January in each year, commencing April 15, 1997. The amount
of each distribution due with respect to the Capital Securities will include
amounts accrued through the date the distribution payment is due. If any date
on which a Distribution is otherwise payable on the Trust Securities is not a
Business Day, then the payment of such Distribution shall be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, payment of such Distribution shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date (each date on which distributions are payable in
accordance with this Section 401(a) a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in the
Trust Property, and, as a practical matter, the Distributions on the Trust
Securities shall be payable at a rate of ___% per annum of the Liquidation
Amount of the Trust Securities. The amount of Distributions payable for any
full period shall be computed on the basis of a 360-day year of twelve 30-day
months. The amount of Distributions for any partial period shall be computed on
the basis of the number of days elapsed in a 360-day year of twelve 30-day
months. During any Extension Period with respect to the Junior Subordinated
Debentures, Distributions on the Capital Securities will be deferred for a
period equal to the Extension Period. The amount of Distributions payable for
any period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the Property
Trustee solely from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust
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has funds then on hand and immediately available in the Payment Account for
the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities on the relevant record date, which shall be
one Business Day prior to such Distribution Date; provided, however, that in the
event that the Capital Securities do not remain in book-entry-only form, the
relevant record date shall be the 1st day of the month in which the relevant
Distribution Date occurs.
SECTION 402. REDEMPTION.
(a) On each Debenture Redemption Date and on the stated maturity of the
Junior Subordinated Debentures, the Trust will be required to redeem a Like
Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Securities Register. The Property
Trustee shall have no responsibility for the accuracy of any CUSIP number
contained in such notice. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
distributions thereon will cease to accumulate on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Junior Subordinated Debentures. Redemptions of the Trust
Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has immediately available
funds then on hand and available in the Payment Account for the payment of such
Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Capital Securities, then, by 12:00 noon, Minneapolis time, on the Redemption
Date, subject to Section 402(c), the Property Trustee will, so long as the
Capital Securities are in book-entry-only form, deposit with the Clearing Agency
for the Capital Securities funds sufficient to pay the applicable
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Redemption Price and will give such Clearing Agency irrevocable instructions
and authority to pay the Redemption Price to the holders thereof. If the
Capital Securities are no longer in book-entry-only form, the Property
Trustee, subject to Section 402(c), will deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and will give the Paying
Agent irrevocable instructions and authority to pay the Redemption Price to
the Holders thereof upon surrender of their Capital Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the
Securities Register for the Trust Securities on the relevant record dates for
the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit,
all rights of Securityholders holding Trust Securities so called for
redemption will cease, except the right of such Securityholders to receive
the Redemption Price, but without interest on such Redemption Price, and such
Securities will cease to be Outstanding. In the event that any date on which
any Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on such
date. In the event that payment of the Redemption Price in respect of any
Trust Securities called for redemption is improperly withheld or refused and
not paid either by the Trust or by the Depositor pursuant to the Guarantee,
Distributions on such Trust Securities will continue to accumulate, at the
then applicable rate, from the Redemption Date originally established by the
Trust for such Trust Securities to the date such Redemption Price is actually
paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the record holders thereof as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be one Business Day
prior to the relevant Redemption Date; provided, however, that in the event that
the Capital Securities do not remain in book-entry-only form, the relevant
record date shall be the date fifteen days prior to the relevant Redemption
Date.
(f) Subject to Section 403(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Capital Securities. The particular Capital Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Property
Trustee from the outstanding Capital Securities not previously called for
redemption, by such method (including, without limitation, by lot) as the
Property Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $25 or an integral multiple of
$25 in excess thereof) of the Liquidation Amount of Capital Securities of a
denomination larger than $25. The Property Trustee shall promptly notify the
Securities Registrar in writing of the Capital Securities selected for
redemption and, in the case of any Capital Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate,
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in the case of any Capital Securities redeemed or to be redeemed only in
part, to the portion of the Liquidation Amount of Capital Securities which
has been or is to be redeemed.
SECTION 403. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made, subject to Section 402(f), pro rata among the Common Securities and the
Capital Securities based on the Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date or Redemption Date any Event
of Default resulting from a Debenture Event of Default shall have occurred and
be continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all Outstanding Capital Securities then called for
redemption, shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions (including Additional Amounts, if applicable) on,
or the Redemption Price of, Capital Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from a
Debenture Event of Default, the Holder of Common Securities will be deemed to
have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with respect
to the Capital Securities shall have been cured, waived or otherwise eliminated.
Until any such Event of Default under this Trust Agreement with respect to the
Capital Securities shall have been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the Holders of the Capital
Securities and not the Holder of the Common Securities, and only the Holders of
the Capital Securities will have the right to direct the Property Trustee to act
on their behalf.
SECTION 404. PAYMENT PROCEDURES.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Capital Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Capital Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable Distribution Dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Common Securityholder.
SECTION 405. TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports
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required to be filed by or in respect of the Trust. In this regard, the
Administrative Trustees shall (a) prepare and file (or cause to be prepared
and filed) the appropriate Internal Revenue Service Form required to be filed
in respect of the Trust in each taxable year of the Trust and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder the
appropriate Internal Revenue Service form required to be furnished to such
Securityholder or the information required to be provided on such form. The
Administrative Trustees shall provide the Depositor with a copy of all such
returns and reports promptly after such filing or furnishing. The Property
Trustee shall comply with United States federal withholding and backup
withholding tax laws and information reporting requirements with respect to
any payments to Securityholders under the Trust Securities.
SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Junior Subordinated Debentures of Additional Sums,
the Property Trustee, at the direction of an Administrative Trustee or the
Depositor, shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.
SECTION 407. PAYMENTS UNDER INDENTURE.
Any amount payable hereunder to any Holder of Capital Securities shall be
reduced by the amount of any corresponding payment such Holder has directly
received under the Indenture pursuant to Section 514(b) or (c) hereof.
ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 501. INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 203 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 502. THE TRUST SECURITIES CERTIFICATES.
The Capital Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $25 Liquidation Amount and integral multiples of $25 in excess thereof. The
Trust Securities Certificates shall be executed on behalf of the Trust by manual
signature of at least one Administrative Trustee. Trust Securities Certificates
bearing the manual signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at
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the date of delivery of such Trust Securities Certificates. A transferee of
a Trust Securities Certificate shall become a Securityholder, and shall be
entitled to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Sections 504, 511 and 513.
SECTION 503. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 204 and 205, to be executed on behalf of the Trust by at least one of
the Administrative Trustees and delivered to or upon the written order of the
Depositor, signed by its President, any Vice President or the Chief Financial
Officer without further corporate action by the Depositor, in authorized
denominations.
SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF CAPITAL SECURITIES
CERTIFICATES.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 508, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of Capital
Securities Certificates (herein referred to as the "Securities Register") in
which the registrar designated by the Depositor (the "Securities Registrar"),
subject to such reasonable regulations as it may prescribe, shall provide for
the registration of Capital Securities Certificates and Common Securities
Certificates (subject to Section 510 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Capital Securities
Certificates as herein provided. The Property Trustee shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 508, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Capital
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees. The Securities Registrar shall not be required to register the
transfer of any Capital Securities that have been called for redemption. At the
option of a Holder, Capital Securities Certificates may be exchanged for other
Capital Securities Certificates in authorized denominations of the same class
and of a like aggregate Liquidation Amount upon surrender of the Capital
Securities Certificates to be exchanged at the office or agency maintained
pursuant to Section 508.
Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Capital Securities Certificate surrendered for
registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Property Trustee in accordance with its customary practice.
The Trust shall not be required to (i) issue, register the transfer of, or
exchange any Capital Securities during a period beginning at the opening of
business 15 calendar days before the date of mailing of a notice of redemption
of any Capital Securities called for redemption
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and ending at the close of business on the day of such mailing or (ii)
register the transfer of or exchange any Capital Securities so selected for
redemption, in whole or in part, except the unredeemed portion of any such
Capital Securities being redeemed in part.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Capital Securities
Certificates.
SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection
with the issuance of any new Trust Securities Certificate under this Section,
the Administrative Trustees or the Securities Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Trust Securities Certificate
issued pursuant to this Section shall constitute conclusive evidence of an
undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 506. PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent and the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for the
purpose of receiving Distributions and for all other purposes whatsoever, and
neither the Trustees nor the Securities Registrar shall be bound by any notice
to the contrary.
SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
At any time when the Property Trustee is not also acting as the Securities
Registrar, the Administrative Trustees or the Depositor shall furnish or cause
to be furnished to the Property Trustee (a) semi-annually on or before January 1
and July 1 in each year, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Securityholders as of the
most recent Record Date and (b) promptly after receipt by any Administrative
Trustee or the Depositor of a request therefor from the Property Trustee, such
other information as the Property Trustee may reasonably require in order to
enable the Property Trustee to discharge its obligations
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under this Trust Agreement, in each case to the extent such information is in
the possession or control of the Administrative Trustees or the Depositor and
is not identical to a previously supplied list or has not otherwise been
received by the Property Trustee in its capacity as Securities Registrar.
The rights of Securityholders to communicate with other Securityholders with
respect to their rights under this Trust Agreement or under the Trust
Securities, and the corresponding rights of the Trustee shall be as provided
in the Trust Indenture Act. Each Holder, by receiving and holding a Trust
Securities Certificate, and each Owner shall be deemed to have agreed not to
hold the Depositor, the Property Trustee or the Administrative Trustees
accountable by reason of the disclosure of its name and address, regardless
of the source from which such information was derived.
SECTION 508. MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain an office or offices or agency
or agencies where Capital Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate the principal corporate trust office
of the Property Trustee, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attn: Corporate Trust Administrator, as the
principal corporate trust office for such purposes. The Administrative Trustees
shall give prompt written notice to the Depositor and to the Securityholders of
any change in the location of the Securities Register or any such office or
agency.
SECTION 509. APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying
Agent shall initially be the Property Trustee, and any co-paying agent chosen by
the Property Trustee, and acceptable to the Administrative Trustees and the
Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Depositor. In the event that the Property Trustee
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to the Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 801, 803 and 806 shall apply
to the Property Trustee also in its role as Paying Agent, for
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so long as the Property Trustee shall act as Paying Agent and, to the extent
applicable, to any other paying agent appointed hereunder. Any reference in
this Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.
SECTION 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. To the fullest extent permitted by
law, any attempted transfer of the Common Securities (other than a transfer in
connection with a merger or consolidation of the Depositor into another
corporation pursuant to Section 12.1 of the Indenture) shall be void. The
Administrative Trustees shall cause each Common Securities Certificate issued to
the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE".
SECTION 511. BOOK-ENTRY CAPITAL SECURITIES CERTIFICATES; COMMON SECURITIES
CERTIFICATE.
(a) The Capital Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Capital Securities Certificate or
Certificates representing Book-Entry Capital Securities Certificates, to be
delivered to or held on behalf of The Depositary Trust Company, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Book-Entry Capital
Securities Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no beneficial owner will receive a Definitive Capital
Securities Certificate representing such beneficial owner's interest in such
Capital Securities, except as provided in Section 513. Unless and until
Definitive Capital Securities Certificates have been issued to beneficial owners
pursuant to Section 513:
(i) the provisions of this Section 511(a) shall be in full force and
effect;
(ii) the Securities Registrar, the Paying Agent and the Trustees shall
be entitled to deal with the Clearing Agency for all purposes of this Trust
Agreement relating to the Book-Entry Capital Securities Certificates
(including the payment of the Liquidation Amount of and Distributions on
the Book-Entry Capital Securities) as the sole Holder of Book-Entry Capital
Securities and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 511
conflict with any other provisions of this Trust Agreement, the provisions
of this Section 511 shall control; and
(iv) the rights of the Owners of the Book-Entry Capital Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive
Capital Securities Certificates are issued pursuant to Section 513, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and will receive and transmit payments on the Capital
Securities to such Clearing Agency Participants. Any
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Clearing Agency designated pursuant hereto will not be deemed an agent of
the Trustees for any purpose.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 512. NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Capital
Securities Certificates shall have been issued to Owners pursuant to Section
513, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 513. DEFINITIVE CAPITAL SECURITIES CERTIFICATES.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Capital Securities Certificates, and the Depositor is unable
to locate a qualified successor, (b) the Depositor at its option advises the
Trustees in writing that it elects to terminate the book-entry system through
the Clearing Agency, or (c) after the occurrence of a Debenture Event of
Default, Owners of Capital Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Property Trustee in writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interests of the Owners of Capital
Securities Certificates, then the Property Trustee shall notify the Clearing
Agency, and the Clearing Agency shall notify all Owners of Capital Securities
Certificates, of the occurrence of any such event and of the availability of the
Definitive Capital Securities Certificates to Owners of such class or classes,
as applicable, requesting the same. Upon surrender to the Property Trustee of
the typewritten Capital Securities Certificate or Certificates representing the
Book-Entry Capital Securities Certificates by the Clearing Agency, accompanied
by registration instructions, the Administrative Trustees, or any one of them,
shall execute the Definitive Capital Securities Certificates in accordance with
the instructions of the Clearing Agency. Neither the Securities Registrar nor
the Trustees shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Capital Securities Certificates,
the Trustees shall recognize the holders of the Definitive Capital Securities
Certificates as Securityholders. The Definitive Capital Securities Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Administrative Trustees, as evidenced
by the execution thereof by the Administrative Trustees or any one of them.
SECTION 514. RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 209, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property
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giving only the rights specifically set forth therein and in this Trust
Agreement. The Trust Securities shall have no preemptive or similar rights.
When issued and delivered to Holders of the Capital Securities against
payment of the purchase price therefor, the Capital Securities will be fully
paid and nonassessable interests in the Trust. The Holders of the Capital
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
(b) For so long as any Capital Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Junior Subordinated
Debentures fail to declare the principal of all of the Junior Subordinated
Debentures to be immediately due and payable, the Holders of at least 25% in
Liquidation Amount of the Capital Securities then Outstanding shall have such
right by a notice in writing to the Depositor and the Debenture Trustee; and
upon any such declaration such principal amount of and the accrued interest
on all of the Junior Subordinated Debentures shall become immediately due and
payable, provided that the payment of principal and interest on such Junior
Subordinated Debentures shall remain subordinated to the extent provided in
the Indenture. If, as a result of a Debenture Event of Default, the
Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Debentures have
declared the Junior Subordinated Debentures due and payable and if such
default has been cured and a sum sufficient to pay all matured installments
due (otherwise than by acceleration) under the Junior Subordinated Debentures
has been deposited with the Debenture Trustee, then (if the holders of not
less than a majority in aggregate outstanding principal amount of Junior
Subordinated Debentures have not annulled such declaration and waived such
default) the holders of a majority in aggregate Liquidation Amount of the
Capital Securities may annul such declaration and waive such default.
(c) For so long as any Capital Securities remain outstanding, upon a
Debenture Event of Default arising from the failure to pay interest or
principal on the Junior Subordinated Debentures, the Holders of any Capital
Securities then Outstanding shall, to the fullest extent permitted by law,
have the right to directly institute proceedings for enforcement of payment
to such Holders of principal of or interest on the Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Capital Securities of such Holders.
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 601. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 514, 810 and 1002
and in the Indenture and as otherwise required by law, no Holder of Capital
Securities shall have any right to vote or in any manner otherwise control
the administration, operation and management of the Trust or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in
the terms of the Trust Securities Certificates, be construed so as to
constitute the Securityholders from time to time as partners or members of an
association.
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(b) So long as any Junior Subordinated Debentures are held by the
Property Trustee, the Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture Trustee
with respect to such Junior Subordinated Debentures, (ii) waive any past
default which is waivable under Article Seven of the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of
all the Junior Subordinated Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Junior Subordinated Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders of at
least a majority in Liquidation Amount of all Outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of outstanding Junior Subordinated Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Capital Securities. The Trustees
shall not revoke any action previously authorized or approved by a vote of
the Holders of the Outstanding Capital Securities, except by a subsequent
vote of the Holders of the Outstanding Capital Securities. The Property
Trustee shall notify each Holder of the Outstanding Capital Securities of any
notice of default received from the Debenture Trustee with respect to the
Junior Subordinated Debentures. In addition to obtaining the foregoing
approvals of the Holders of the Capital Securities, prior to taking any of
the foregoing actions, the Trustees shall, at the expense of the Depositor,
obtain an Opinion of Counsel experienced in such matters to the effect that
the Trust will continue to be classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of
the Capital Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Capital Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a majority in Liquidation
Amount of the Outstanding Capital Securities. No amendment to this Trust
Agreement may be made if, as a result of such amendment, the Trust would
cease to be classified as a grantor trust or would be classified as an
association taxable as a corporation for United States federal income tax
purposes.
SECTION 602. NOTICE OF MEETINGS.
Notice of all meetings of the Holders of Capital Securities, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 1008 to each Holder of Capital Securities of record, at and
Securityholder's registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.
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SECTION 603. MEETINGS OF HOLDERS OF CAPITAL SECURITIES.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Holders of 25% of the
Outstanding Capital Securities (based upon their aggregate Liquidation
Amount) and the Administrative Trustees or the Property Trustee may, at any
time in their discretion, call a meeting of Preferred Securityholders to vote
on any matters as to which the Preferred Securityholders are entitled to vote.
Holders of record of 50% of the Outstanding Capital Securities (based
upon their aggregate Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Holders
of record present, in person or by proxy, holding more than a majority of the
Capital Securities (based upon their aggregate Liquidation Amount) held by
the Holders of Capital Securities of record present, either in person or by
proxy, at such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.
SECTION 604. VOTING RIGHTS.
Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.
SECTION 605. PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Administrative
Trustees, or with such other officer or agent of the Trust as the
Administrative Trustees may direct, for verification prior to the time at
which such vote shall be taken. When Trust Securities are held jointly by
several persons, any one of them may vote at any meeting in person or by
proxy in respect of such Trust Securities, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or
their proxies so present disagree as to any vote to be cast, such vote shall
not be received in respect of such Trust Securities. A proxy purporting to be
executed by or on behalf of a Securityholder shall be deemed valid unless
challenged at or prior to its exercise, and, the burden of proving invalidity
shall rest on the challenger. No proxy shall be valid more than three years
after its date of execution.
SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding more than a majority of
all Outstanding Trust Securities (based upon their aggregate Liquidation
Amount) entitled to vote in respect of such action (or such larger proportion
thereof as shall be required by any express provision of this Trust
Agreement) shall consent to the action in writing (based upon their aggregate
Liquidation Amount).
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SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate
in any Distribution on the Trust Securities in respect of which a record date
is not otherwise provided for in this Trust Agreement, or for the purpose of
any other action, the Administrative Trustees may from time to time fix a
date, not more than 90 days prior to the date of any meeting of
Securityholders or the payment of Distribution or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
SECTION 608. ACTS OF SECURITYHOLDERS.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders or Owners may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such
Securityholders or Owners in person or by an agent duly appointed in writing;
and, except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Securityholders or Owners signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Trust
Agreement and (subject to Section 801) conclusive in favor of the Trustees,
if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or
by a certificate of a notary public or other officer authorized by law to
take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of
the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which any
Trustee receiving the same deems sufficient.
The ownership of Capital Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every
Trust Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustees or the Trust in reliance thereon, whether
or not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the
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Liquidation Amount of such Trust Security or by one or more duly appointed
agents each of which may do so pursuant to such appointment with regard to
all or any part of such Liquidation Amount.
A Holder of Capital Securities may institute a legal proceeding directly
against the Depositor under the Guarantee to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee (as defined in the Guarantee), the Trust or any Person.
SECTION 609. INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by
Securityholders during normal business hours for any purpose reasonably
related to such Securityholder's interest as a Securityholder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
SECTION 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE PROPERTY
TRUSTEE.
The Bank and the Property Trustee, each severally on behalf of and as to
itself, as of the date hereof, and each Successor Property Trustee at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (the term "Bank" being used to refer to such
Successor Property Trustee in its separate corporate capacity), hereby
represents and warrants (as applicable) for the benefit of the Depositor and
the Securityholders that:
(a) the Bank is a Delaware banking corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) each of the Property Trustee and the Bank has full corporate power,
authority and legal right to execute, deliver and perform its obligations
under this Trust Agreement and has taken all necessary action to authorize
the execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by each of the Property Trustee and the Bank and constitutes the
valid and legally binding agreement of each of the Property Trustee and the
Bank enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(d) the execution, delivery and performance by each of the Property
Trustee and the Bank of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Property Trustee and the
Bank and does not require any approval of the stockholders of the Property
Trustee or the Bank and such execution, delivery and performance will not (i)
violate
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the Property Trustee's or the Bank's charter or by-laws, (ii) violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of, any Lien on any
properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or
instrument to which the Property Trustee or the Bank is a party or by which
it is bound, or (iii) violate any law, governmental rule or regulation of the
United States or the State of Delaware, as the case may be, governing the
banking or trust powers of the Bank or the Property Trustee, as the case may
be, or any order, judgment or decree applicable to the Property Trustee or
the Bank;
(e) neither the authorization, execution or delivery by the Property
Trustee or the Bank of this Trust Agreement nor the consummation of any of
the transactions by the Property Trustee or the Bank contemplated herein or
therein requires the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect to, any
governmental authority or agency under any existing law of the State of
Delaware governing the banking or trust powers of the Bank or the Property
Trustee, as the case may be; and
(f) there are no proceedings pending or, to the best of the Bank's or
the Property Trustee's knowledge, threatened against or affecting the Bank or
the Property Trustee, as the case may be, in any court or before any
governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Bank or the
Property Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 702. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK AND THE
DELAWARE TRUSTEE.
The Delaware Bank and the Delaware Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each Successor Delaware Trustee
at the time of the Successor Delaware Trustee's acceptance of its appointment
as Delaware Trustee hereunder (the term "Delaware Bank" being used to refer
to such Successor Delaware Trustee in its separate corporate capacity),
hereby represents and warrants (as applicable) for the benefit of the
Depositor and the Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) each of the Delaware Trustee and the Delaware Bank has full
corporate power, authority and legal right to execute, deliver and perform
its obligations under this Trust Agreement and has taken all necessary action
to authorize the execution, delivery and performance by it of this Trust
Agreement;
(c) this Trust Agreement has been duly authorized, executed and delivered
by each of the Delaware Trustee and the Delaware Bank and constitutes the valid
and legally binding agreement of each of the Delaware Trustee and the Delaware
Bank enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles;
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(d) the execution, delivery and performance by each of the Delaware
Trustee and the Delaware Bank of this Trust Agreement has been duly
authorized by all necessary corporate or other action on the part of the
Delaware Trustee and the Delaware Bank and does not require any approval of
the stockholders of the Delaware Trustee or the Delaware Bank and such
execution, delivery and performance will not (i) violate the Delaware
Trustee's or the Delaware Bank's charter or by-laws, (ii) violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of, any Lien on any
properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or
instrument to which the Delaware Bank or the Delaware Trustee is a party or
by which it is bound, or (iii) violate any law, governmental rule or
regulation of the United States or the State of Delaware, as the case may be,
governing the banking or trust powers of the Delaware Bank or the Delaware
Trustee, as the case may be, or any order, judgment or decree applicable to
the Delaware Bank or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the Delaware
Trustee or the Delaware Bank of this Trust Agreement nor the consummation of
any of the transactions by the Delaware Trustee or the Delaware Bank
contemplated herein or therein requires the consent or approval of, the
giving of notice to, the registration with or the taking of any other action
with respect to, any governmental authority or agency under any existing law
of the State of Delaware governing the banking or trust powers of the
Delaware Bank or the Delaware Trustee, as the case may be; and
(f) there are no proceedings pending or, to the best of the Delaware
Bank's or the Delaware Trustee's knowledge, threatened against or affecting
the Delaware Bank or the Delaware Trustee, as the case may be, in any court
or before any governmental authority, agency or arbitration board or tribunal
which, individually or in the aggregate, would materially and adversely
affect the Trust or would question the right, power and authority of the
Delaware Bank or the Delaware Trustee, as the case may be, to enter into or
perform its obligations as one of the Trustees under this Trust Agreement.
SECTION 703. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Administrative Trustees
pursuant to the terms and provisions of, and in accordance with the
requirements of, this Trust Agreement and the Securityholders will be, as of
such date, entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State of
Delaware or any political subdivision thereof in connection with the execution,
delivery and performance by the Bank, the Property Trustee, the Delaware Bank or
the Delaware Trustee, as the case may be, of this Trust Agreement.
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ARTICLE VIII.
THE TRUSTEES
SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as provided
by this Trust Agreement and, in the case of the Property Trustee, by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own funds
or otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if
they shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it. No Administrative Trustee nor the Delaware Trustee shall be
liable for such Trustee's acts or omissions hereunder except as a result of
such Trustee's own gross negligence or willful misconduct. The Property
Trustee's liability shall be determined under the Trust Indenture Act.
Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this
Section. To the extent that, at law or in equity, the Delaware Trustee or an
Administrative Trustee has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to the Securityholders, the
Delaware Trustee or such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement,
to the extent that they restrict the duties and liabilities of the Delaware
Trustee or the Administrative Trustees otherwise existing at law or in
equity, are agreed by the Depositor and the Securityholders to replace such
other duties and liabilities of the Delaware Trustee and the Administrative
Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms
hereof. Each Securityholder, by such Securityholder's acceptance of a Trust
Security, agrees that such Securityholder will look solely to the revenue and
proceeds from the Trust Property to the extent legally available for
distribution to such Securityholder as herein provided and that the Trustees
are not personally liable to such Securityholder for any amount distributable
in respect of any Trust Security or for any other liability in respect of any
Trust Security. This Section 801(b) does not limit the liability of the
Trustees expressly set forth elsewhere in this Trust Agreement or, in the
case of the Property Trustee, in the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
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(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Subordinated
Debentures and the Payment Account shall be to deal with such Property in a
similar manner as the Property Trustee deals with similar property for its
own account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and the Trust
Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Depositor
and money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 301 and except to the extent
otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the negligence, default or misconduct of the
Administrative Trustees or the Depositor.
SECTION 802. CERTAIN NOTICES.
(a) Within 5 Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 1008, notice of such Event of
Default to the Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived. For purposes of
this Section the term "Event of Default" means any event that is, or after
notice or lapse of time or both would become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the Securityholders in
the manner and to the extent provided in Section 1008, notice of the Depositor's
election to begin or further extend an Extension Period on the Junior
Subordinated Debentures (unless such election shall have been revoked) within
the time specified for transmitting such notice to the holders of the Junior
Subordinated Debentures pursuant to the Indenture as originally executed.
SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 801:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder
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or transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action
or (ii) in construing any of the provisions of this Trust Agreement the
Property Trustee finds the same ambiguous or inconsistent with other
provisions contained herein or (iii) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then, except as to any
matter as to which the Preferred Securityholders are entitled to vote under
the terms of this Trust Agreement, the Property Trustee shall deliver a
notice to the Depositor requesting written instructions of the Depositor as
to the course of action to be taken and the Property Trustee shall take such
action, or refrain from taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking, by the Depositor;
provided, however, that if the Property Trustee does not receive such
instructions of the Depositor within ten Business Days after it has delivered
such notice, or such reasonably shorter period of time set forth in such
notice (which to the extent practicable shall not be less than two Business
Days), it may, but shall be under no duty to, take or refrain from taking
such action not inconsistent with this Trust Agreement as it shall deem
advisable and in the best interests of the Securityholders, in which event
the Property Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative Trustees
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the Property
Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly delivered
by the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel of its choice and the
advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon and in accordance with such
advice (such counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees); the Property Trustee shall
have the right at any time to seek instructions concerning the administration
of this Trust Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders
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pursuant to this Trust Agreement, unless such Securityholders shall have
offered to the Property Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or recklessness with respect to selection
of any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the Trust
Securities which instructions may only be given by the Holders of the same
proportion in Liquidation Amount of the Trust Securities as would be entitled
to direct the Property Trustee under the terms of the Trust Securities in
respect of such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in acting in accordance with such
instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement. No provision of
this Trust Agreement shall be deemed to impose any duty or obligation on the
Property Trustee to perform any act or acts or exercise any right, power,
duty or obligation conferred or imposed on it, in any jurisdiction in which
it shall be illegal, or in which the Property Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or
acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of
the Junior Subordinated Debentures.
SECTION 805. MAY HOLD SECURITIES.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 808 and 813
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and except as provided in the definition of the term "Outstanding" in Article
I, may otherwise deal with the Trust with the same rights it would have if it
were not a Trustee or such other agent.
SECTION 806. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation for
all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this
Trust Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to such Trustee's negligence,
bad faith or willful misconduct (or, in the case of the Administrative
Trustees or the Delaware Trustee, any such expense, disbursement or advance
as may be attributable to its, his or her gross negligence, bad faith or
willful misconduct); and
(c) to indemnify each of the Trustees or any predecessor Trustee for,
and to hold the Trustees harmless against, any loss, damage, claim,
liability, penalty or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this Trust Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder, except any such cost or expense as
may be attributable to such Trustee's negligence, bad faith or willful
misconduct (or, in the case of the Administrative Trustees or the Delaware
Trustee, any such cost or expense as may be attributable to its, his or her
gross negligence, bad faith or willful misconduct).
No Trustee may claim any Lien on any Trust Property as a result of any
amount due pursuant to this Section 806.
SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that
is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Property Trustee with
respect to the Trust Securities shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
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(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person
who is at least 21 years of age and a resident of the State of Delaware or
(ii) a legal entity with its principal place of business in the State of
Delaware and that otherwise meets the requirements of applicable Delaware law
that shall act through one or more persons authorized to bind such entity.
SECTION 808. CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and
this Trust Agreement.
SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property
may at the time be located, the Depositor and the Administrative Trustees
shall have power to appoint, and upon the written request of the Property
Trustee, the Depositor and the Administrative Trustees shall for such purpose
join with the Property Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Property Trustee either to act as co-trustee, jointly
with the Property Trustee, of all or any part of such Trust Property, or to
the extent required by law to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Depositor and the Administrative
Trustees do not join in such appointment within 15 days after the receipt by
them of a request so to do, or in case a Debenture Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to
make such appointment. Any co-trustee or separate trustee appointed pursuant
to this Section shall either be (i) a natural person who is at least 21 years
of age and a resident of the United States or (ii) a legal entity with its
principal place of business in the United States that shall act through one
or more persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
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Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms, namely:
(a) The Trust Securities shall be executed and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be exercised,
solely by such Trustees and not by such co-trustee or separate trustee.
(b) The rights, powers, duties and obligations hereby conferred or imposed
upon the Property Trustee in respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or performed by the Property
Trustee or by the Property Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property Trustee shall be
incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing executed
by it, with the written concurrence of the Depositor, may accept the resignation
of or remove any co-trustee or separate trustee appointed under this Section,
and, in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the Depositor.
Upon the written request of the Property Trustee, the Depositor shall join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such resignation or
removal. A successor to any co-trustee or separate trustee so resigned or
removed may be appointed in the manner provided in this Section 809.
(d) No co-trustee or separate trustee hereunder shall be personally liable
by reason of any act or omission of the Property Trustee or any other trustee
hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be deemed
to have been delivered to each such co-trustee and separate trustee.
SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 811.
Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time with respect to the Trust Securities by giving written notice
thereof to the Securityholders. If the instrument of acceptance by the
successor Trustee required by Section 811 shall not have been
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delivered to the Relevant Trustee within 30 days after the giving of such
notice of resignation, the Relevant Trustee may petition, at the expense of
the Depositor, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee with respect to the Trust Securities.
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Common Securityholder. If
a Debenture Event of Default shall have occurred and be continuing, the Property
Trustee or the Delaware Trustee, or both of them, may be removed at such time by
Act of the Holders of a majority in Liquidation Amount of the Capital
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time. In no event will the Holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and the successor
Trustee shall comply with the applicable requirements of Section 811. If the
Property Trustee or the Delaware Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee or the Delaware Trustee,
as the case may be, at a time when a Debenture Event of Default shall have
occurred and is continuing, the Preferred Securityholders, by Act of the
Securityholders of a majority in Liquidation Amount of the Capital Securities
then Outstanding delivered to the retiring Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with the
applicable requirements of Section 811. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, at a
time when a Debenture Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder delivered to an
Administrative Trustee, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 811. If no successor
Relevant Trustee with respect to the Trust Securities shall have been so
appointed by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 811, any Securityholder
who has been a Securityholder of Trust Securities on behalf of such
Securityholder and all others similarly situated may petition a court of
competent jurisdiction for the appointment Trustee with respect to the Trust
Securities.
The Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 1008 and shall give notice to the Depositor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death,
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incompetence or incapacity may be filled by (a) the unanimous act of
remaining Administrative Trustees if there are at least two of them or (b)
otherwise by the Depositor (with the successor in each case being a Person
who satisfies the eligibility requirement for Administrative Trustees set
forth in Section 807).
SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant Trustee with
respect to the Trust Securities and the Trust, the retiring Relevant Trustee and
each successor Relevant Trustee with respect to the Trust Securities shall
execute and deliver an instrument hereto wherein each successor Relevant Trustee
shall accept such appointment and which shall contain such provisions as shall
be necessary or desirable to transfer and confirm to, and to vest in, each
successor Relevant Trustee all the rights, powers, trusts and duties of the
retiring Relevant Trustee with respect to the Trust Securities and the Trust and
upon the execution and delivery of such instrument the resignation or removal of
the retiring Relevant Trustee shall become effective to the extent provided
therein and each such successor Relevant Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Trust; but, on request of the Trust or any successor Relevant Trustee such
retiring Relevant Trustee shall duly assign, transfer and deliver to such
successor Relevant Trustee all Trust Property, all proceeds thereof and money
held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the immediately preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at the
time of such acceptance such successor Relevant Trustee shall be qualified and
eligible under this Article.
SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
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 Relevant Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.
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If and when the Property Trustee or the Delaware Trustee shall be or become
a creditor of the Depositor or the Trust (or any other obligor upon the Junior
Subordinated Debentures or the Trust Securities), the Property Trustee or the
Delaware Trustee, as the case may be, shall be subject to and shall take all
actions necessary in order to comply with the provisions of the Trust Indenture
Act regarding the collection of claims against the Depositor or Trust (or any
such other obligor).
SECTION 814. REPORTS BY PROPERTY TRUSTEE.
(a) Not later than ________ of each year commencing with _____________,
1997, the Property Trustee shall transmit to all Securityholders in accordance
with Section 1008, and to the Depositor, a brief report dated as of the
preceding _________ with respect to:
(i) its eligibility under Section 807 or, in lieu thereof, if to the
best of its knowledge it has continued to be eligible under said Section, a
written statement to such effect; and
(ii) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action taken by
the Property Trustee in the performance of its duties hereunder which it
has not previously reported and which in its opinion materially affects the
Trust Securities.
(b) In addition the Property Trustee shall transmit to Securityholders
such reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each national securities exchange
or other organization upon which the Trust Securities may be listed, with the
Commission and with the Depositor.
SECTION 815. REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with the
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
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SECTION 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be _______, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware
Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 817(a), or if the
number of Trustees is increased pursuant to Section 817(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 810.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence
or incapacity to perform the duties of a Trustee shall not operate to annul the
Trust. Whenever a vacancy in the number of Administrative Trustees shall occur,
until such vacancy is filled by the appointment of an Administrative Trustee in
accordance with Section 810, the Administrative Trustees in office, regardless
of their number (and notwithstanding any other provision of this Agreement),
shall have all the powers granted to the Administrative Trustees and shall
discharge all the duties imposed upon the Administrative Trustees by this Trust
Agreement.
SECTION 818. DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
207(a); and
(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
SECTION 819. VOTING.
Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by not
less than a majority of the Administrative Trustees, unless there are only two,
in which case both must consent.
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ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 901. TERMINATION UPON EXPIRATION DATE.
Unless earlier dissolved, the Trust shall automatically dissolve on
_____________ (the "Expiration Date") subject to distribution of the Trust
Property in accordance with Section 904.
SECTION 902. EARLY TERMINATION.
The first to occur of any of the following events is an "Early Termination
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee by the Depositor
at any time (which direction is wholly optional and within the discretion of the
Depositor) to dissolve the Trust and distribute the Junior Subordinated
Debentures to Securityholders in exchange for the Capital Securities in
accordance with Section 904;
(c) the redemption of all of the Capital Securities in connection with the
redemption of all of the Junior Subordinated Debentures; and
(d) an order for dissolution of the Trust shall have been entered by a
court of competent jurisdiction.
SECTION 903. TERMINATION.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 904, or upon the
redemption of all of the Trust Securities pursuant to Section 402, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; (c) the discharge
of all administrative duties of the Administrative Trustees, including the
performance of any tax reporting obligations with respect to the Trust or the
Securityholders, and (d) the filing of a Certificate of cancellation by the
Administrative Trustee under the Business Trust Act.
SECTION 904. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b), or (d) of
Section 902 occurs or upon the Expiration Date, the Trust shall be liquidated by
the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Junior
Subordinated
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Debentures, subject to Section 904(d). Notice of liquidation shall be given
by the Property Trustee by first-class mail, postage prepaid, mailed not
later than 30 nor more than 60 days prior to the Liquidation Date to each
Holder of Trust Securities at such Holder's address appearing in the
Securities Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Junior Subordinated Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities certificates for Junior
Subordinated Debentures, or if Section 904(d) applies receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee shall
deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order to effect the
liquidation of the Trust and distribution of the Junior Subordinated Debentures
to Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Junior Subordinated Debentures in
exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 902(c) or 904(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates (or, at the election of the Depositor a Global Subordinated
Debenture, subject to the provisions of the Indenture) representing a Like
Amount of Junior Subordinated Debentures will be issued to holders of Trust
Securities Certificates upon surrender of such certificates to the
Administrative Trustees or their agent for exchange, (iii) the Depositor shall
use its reasonable efforts to have the Junior Subordinated Debentures listed on
the Nasdaq National Market or on such other securities exchange or other
organization as the Capital Securities may then be listed or traded, (iv) any
Trust Securities Certificates not so surrendered for exchange will be deemed to
represent a Like Amount of Junior Subordinated Debentures, accruing interest at
the rate provided for in the Junior Subordinated Debentures from the last
Distribution Date on which a Distribution was made on such Trust Securities
Certificates until such certificates are so surrendered (and until such
certificates are so surrendered, no payments of interest or principal will be
made to holders of Trust Securities Certificates with respect to such Junior
Subordinated Debentures) and (v) all rights of Securityholders holding Trust
Securities will cease, except the right of such Securityholders to receive
Junior Subordinated Debentures upon surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 904, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Junior Subordinated
Debentures in the manner provided herein is determined by the Property Trustee
not to be practical, the Trust Property shall be liquidated, and the Trust shall
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be dissolved, wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any such
dissolution, winding-up or termination, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The holder of the Common
Securities will be entitled to receive Liquidation Distributions upon any such
dissolution, winding-up or termination pro rata (determined as aforesaid) with
Holders of Capital Securities, except that, if a Debenture Event of Default has
occurred and is continuing, the Capital Securities shall have a priority over
the Common Securities.
SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 905. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the holders of the Capital
Securities, the Property Trustee or the Delaware Trustee, the Trust may merge
with or into, consolidate, amalgamate, be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any state; provided, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Trust with
respect to the Capital Securities or (b) substitutes for the Capital Securities
other securities having substantially the same terms as the Capital Securities
(the "Successor Securities") so long as the Successor Securities rank the same
as the Capital Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) the Depositor
expressly appoints a trustee of such successor entity possessing substantially
the same powers and duties as the Property Trustee as the holder of the Junior
Subordinated Debentures, (iii) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital Securities (including
any Successor Securities) in any material respect, (iv) such successor entity
has a purpose identical to that of the Trust, (v) the Successor Securities will
be listed or traded on any national securities exchange or other organization on
which the Capital Securities may then be listed, (vi) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an Opinion of Counsel experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Capital Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
"investment company" under the Investment Company Act and (vii) the Depositor
owns all of the Common Securities of such successor entity and guarantees the
obligations of such successor entity under the Successor
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Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, the Trust shall not, except with the consent of holders of
100% in Liquidation Amount of the Capital Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to any other
Person or permit any other Person to consolidate, amalgamate, merge with or
into, or replace it, if such consolidation, amalgamation, merger or
replacement would cause the Trust or the successor entity to be classified as
other than a grantor trust for United States federal income tax purposes.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person, to
claim an accounting, take any action or bring any proceeding in any court for a
partition or winding-up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
SECTION 1002. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the Trustees
and the Depositor, without the consent of any Securityholders, (i) as provided
in Section 811 with respect to acceptance of appointment by a successor Trustee,
(ii) to cure any ambiguity, correct or supplement any provision herein or
therein which may be inconsistent with any other provision herein or therein, or
to make any other provisions with respect to matters or questions arising under
this Trust Agreement, that shall not be inconsistent with the other provisions
of this Trust Agreement, or (iii) to modify, eliminate or add to any provisions
of this Trust Agreement to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes as a
grantor trust at all times that any Trust Securities are Outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act; provided, however, that in the case
of clause (ii), such action shall not adversely affect in any material respect
the interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 601(c) or Section 1002(c) hereof, any
provision of this Trust Agreement may be amended by the Trustees and the
Depositor (i) with the consent of Trust Securityholders representing not less
than a majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) upon receipt by the Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment 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 of an "investment company" under the Investment Company
Act.
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(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 603 or 606 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 603 or 606 hereof), this
paragraph (c) of this Section 1002 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an "investment company" under the Investment Company Act or to fail or
cease to be classified as a grantor trust for United States federal income tax
purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 1003. SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 1004. GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
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SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day which is a Business Day (except as otherwise
provided in Sections 401(a) and 402(d)), with the same force and effect as
though made on the date fixed for such payment, and no distribution shall
accumulate thereon for the period after such date.
SECTION 1006. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or the Relevant Trustee(s),
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Twelve of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 1007. HEADINGS.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 1008. REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (a) in the case of a
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Community First
Bankshares, Inc., 520 Main Avenue, Fargo, North Dakota 58124-0001; Attention:
Chief Financial Officer; Facsimile No.: (701) ___-____. Any notice to Preferred
Securityholders shall also be given to such owners as have, within two years
preceding the giving of such notice, filed their names and addresses with the
Property Trustee for that purpose. Such notice, demand or other communication
to or upon a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee to Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration; (b) with respect to the Delaware
Trustee, to Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration; and (c) with respect to the Administrative Trustees, to them at
the
49
<PAGE>
address above for notices to the Depositor, marked "Attention:
Administrative Trustees of United Capital Trust." Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust or the Property Trustee.
SECTION 1009. AGREEMENT NOT TO PETITION.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 1009, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor (which expense shall be paid prior to the filing), it shall
file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by the Depositor against the Trust or the commencement
of such action and raise the defense that the Depositor has agreed in writing
not to take such action and should be stopped and precluded therefrom. The
provisions of this Section 1009 shall survive the termination of this Trust
Agreement.
SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
50
<PAGE>
SECTION 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
COMMUNITY FIRST BANKSHARES, INC.,
as Depositor
By:
---------------------------------------------------
Name: Donald R. Mengedoth
Title: President
WILMINGTON TRUST COMPANY,
as Property Trustee
By:
---------------------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
---------------------------------------------------
Name:
Title:
-------------------------------------------------------
Donald R. Mengedoth, As Administrative Trustee
-------------------------------------------------------
Mark A. Anderson, As Administrative Trustee
-------------------------------------------------------
Ronald K. Strand, As Administrative Trustee
51
<PAGE>
Exhibit D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of __________, 1997, between Community First Bankshares,
Inc., a Delaware corporation ("CFB"), and CFB Capital I, a Delaware business
trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to, and receive ___% Junior Subordinated Debentures (the "Junior
Subordinated Debentures") from, CFB and to issue and sell __% Cumulative Capital
Securities (the "Capital Securities") with such powers, preferences and special
rights and restrictions as are set forth in the Trust Agreement of the Trust
dated as of __________, 1997, as the same may be amended from time to time (the
"Trust Agreement"); and
WHEREAS, CFB will directly or indirectly own all of the Common Securities
of the Trust and will issue the Junior Subordinated Debentures.
NOW, THEREFORE, in consideration of the purchase by each holder of the
Capital Securities, which purchase CFB hereby agrees shall benefit CFB and which
purchase CFB acknowledges will be made in reliance upon the execution and
delivery of this Agreement, CFB, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
SECTION 1.1. GUARANTEE BY CFB.
Subject to the terms and conditions hereof, CFB, including in its capacity
as holder of the Common Securities, hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as
due, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any costs, expenses or liabilities of the
Trust other than obligations of the Trust to pay to holders of any Capital
Securities or other similar interests in the Trust the amounts due such holders
pursuant to the terms of the Capital Securities or such other similar interests,
as the case may be. This Agreement is intended to be for the benefit of, and to
be enforceable by, all such Beneficiaries, whether or not such Beneficiaries
have received notice hereof.
SECTION 1.2. TERM OF AGREEMENT.
This Agreement shall terminate and be of no further force and effect upon
the later of (a) the date on which full payment has been made of all amounts
payable to all holders of all the Capital Securities (whether upon redemption,
liquidation, exchange or otherwise) and (b) the date on which there are no
Beneficiaries remaining; provided, however, that this Agreement shall continue
to be effective or shall be reinstated, as the case may be, if at any time any
holder of Capital Securities or any Beneficiary must restore payment of any sums
paid under the Capital Securities, under any
<PAGE>
Obligation, under the Capital Securities Guarantee Agreement dated the date
hereof by CFB and Wilmington Trust Company as guaranty trustee or under this
Agreement, for any reason whatsoever. This Agreement is continuing,
irrevocable, unconditional and absolute.
SECTION 1.3. WAIVER OF NOTICE.
CFB hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and CFB hereby waives presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 1.4. NO IMPAIRMENT.
The obligations, covenants, agreements and duties of CFB under this
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other
obligation under, arising out of, or in connection with, the
Obligations;
(b) any failure, omission, delay or lack of diligence on the part of the
Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the
Obligations or any action on the part of the Trust granting indulgence
or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Trust or any of the assets of the Trust.
The Beneficiaries shall not be obligated to give notice to, or obtain the
consent of, CFB with respect to the happening of any of the foregoing.
SECTION 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against CFB, and CFB
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against CFB.
2
<PAGE>
ARTICLE II
SECTION 2.1. BINDING EFFECT.
All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of CFB and shall
inure to the benefit of the Beneficiaries.
SECTION 2.2. AMENDMENT.
So long as there remains any Beneficiary or any Capital Securities are
outstanding, this Agreement shall not be modified or amended in any manner
adverse to such Beneficiary or to the holders of the Capital Securities.
SECTION 2.3. NOTICES.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same by facsimile
transmission (confirmed by mail), telex, or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed or upon
receipt of an answer back, if sent by telex):
CFB Capital I
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Facsimile No.: (302) 651-1576
Attention: Corporate Trust Administration
CFB Community First Bankshares, Inc.
520 Main Avenue
Fargo, ND 58124-0001
Facsimile No.: (701) 235-6019
Attention: Mark A. Anderson, Chief Financial Officer
SECTION 2.4. GOVERNING LAW.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Minnesota (without regard to conflict
of laws principles).
3
<PAGE>
THIS AGREEMENT is executed as of the day and year first above written.
COMMUNITY FIRST BANKSHARES, INC.
By:
---------------------------------------------
Name: Donald R. Mengedoth
Title: President Chief Executive Officer
CFB CAPITAL I
By:
---------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
4
<PAGE>
Exhibit E
This Capital Security is a Global Certificate within the meaning of the
Trust Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Capital Security is exchangeable for Capital Securities registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Trust Agreement (as defined below) and no
transfer of this Capital Security (other than a transfer of this Capital
Security 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) may be registered except in limited circumstances.
Unless this Capital Security is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("Depository Trust
Company"), to CFB Capital I 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
Depository Trust Company (and any payment hereon is made to Cede & Co. or to
such other entity as is requested by an authorized representative of Depository
Trust Company), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co. has an interest herein.
Certificate Number Number of Capital Securities
C-
CUSIP NO.
Certificate Evidencing Capital Securities
of
CFB Capital I
___% Cumulative Capital Securities
(liquidation amount $25 per Capital Security)
CFB CAPITAL I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _________________________
(the "Holder") is the registered owner of ______________ (______) preferred
securities of the Trust representing undivided beneficial interests in the
assets of the Trust and designated the ____ % Cumulative Capital Securities
(liquidation amount $25 per Capital Security) (the "Capital Securities"). 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 as provided in Section 504 of the Trust
Agreement (as defined below). The designations, rights, privileges,
<PAGE>
restrictions, preferences, and other terms and provisions of the Capital
Securities are set forth in, and this certificate and the Capital Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of __________, 1997, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of Capital Securities as set
forth therein. The Holder is entitled to the benefits of the Capital Securities
Guarantee Agreement entered into by Community First Bankshares, Inc., a Delaware
corporation, and Wilmington Trust Company, as guarantee trustee, dated as of
__________, 1997 (the "Guaranty"), to the extent provided therein. The Trust
will furnish a copy of the Trust Agreement and the Guaranty to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office. Upon receipt of this certificate, the Holder is
bound by the Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ____ day of ____________, 1997.
CFB CAPITAL I
By___________________________
Name:
Title:
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
COMMUNITY FIRST BANKSHARES, INC.
AND
WILMINGTON TRUST COMPANY
DATED: ____________, 1997
<PAGE>
TABLE OF CONTENTS
Page No.
--------
ARTICLE I - DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . 1
SECTION 1.1 Definitions and Interpretation. . . . . . . . . . . . 1
ARTICLE II - TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . 4
SECTION 2.1 Trust Indenture Act; Application. . . . . . . . . . . 4
SECTION 2.2 Lists of Holders of Securities. . . . . . . . . . . . 4
SECTION 2.3 Reports by the Capital Guarantee Trustee. . . . . . . 4
SECTION 2.4 Periodic Reports to Capital Guarantee Trustee . . . . 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent. . . 5
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . 5
SECTION 2.7 Event of Default; Notice. . . . . . . . . . . . . . . 5
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . 5
ARTICLE III - POWERS, DUTIES AND RIGHTS OF CAPITAL
GUARANTEE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.1 Powers and Duties of the Capital Guarantee Trustee. . 6
SECTION 3.2 Certain Rights of Capital Guarantee Trustee . . . . . 7
SECTION 3.3 Not Responsible for Recitals or
Issuance of Guarantee. . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV - CAPITAL GUARANTEE TRUSTEE . . . . . . . . . . . . . . . 9
SECTION 4.1 Capital Guarantee Trustee; Eligibility. . . . . . . . 9
SECTION 4.2 Appointment, Removal and Resignation of Capital
Guarantee Trustees . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V - Guarantee. . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . 10
i
<PAGE>
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . 10
SECTION 5.3 Obligations Not Affected. . . . . . . . . . . . . . . 10
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . 11
SECTION 5.5 Guarantee of Payment. . . . . . . . . . . . . . . . . 11
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . 11
ARTICLE VI - LIMITATION OF TRANSACTIONS; SUBORDINATION . . . . . . . 12
SECTION 6.1 Limitation of Transactions. . . . . . . . . . . . . . 12
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VII - TERMINATION. . . . . . . . . . . . . . . . . . . . . . 12
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII - INDEMNIFICATION . . . . . . . . . . . . . . . . . . . 12
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . 12
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . 13
ARTICLE IX - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.1 Successors and Assigns. . . . . . . . . . . . . . . . 13
SECTION 9.2 Amendments. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . . . 14
ii
<PAGE>
CROSS REFERENCE TABLE
Section of Trust Section of
Indenture Act of Guarantee
1939, as Amended Agreement
---------------- ---------
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
316(a) 1.1, 3.6, 5.4
316(b) 5.3
316(c) 8.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.1(b)
318(b) 2.1
318(c) 2.1(a)
iii
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Capital Securities Guarantee"), dated as of
______, 1997, is executed and delivered by Community First Bankshares, Inc., a
Delaware corporation (the "Guarantor"), and Wilmington Trust Company, as trustee
(the "Capital Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined herein) of CFB
Capital I, a Delaware statutory business trust ("CFB Capital").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement") dated as of _________, 1997 among the trustees of CFB Capital named
therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of CFB Capital, CFB Capital is
issuing on the date hereof 2,400,000 preferred securities, having an aggregate
liquidation amount of $60,000,000, designated the _____% Cumulative Capital
Securities (the "Capital Securities"); and
WHEREAS, as incentive for the Holders to purchase the Capital Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Capital Securities Guarantee, to pay to the Holders of the
Capital Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Capital Securities Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Capital Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Capital Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Capital Securities Guarantee has the
same meaning throughout;
(c) all references to "the Capital Securities Guarantee" or "this Capital
Securities Guarantee" are to this Capital Securities Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this Capital Securities Guarantee to Articles and
Sections are to Articles and Sections of this Capital Securities Guarantee,
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Capital Securities Guarantee, unless otherwise defined in this
Capital Securities Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
1
<PAGE>
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in the State of Minnesota are authorized or
required by law or executive order to remain closed, or (c) a day on which the
Capital Guarantee Trustee's Corporate Trust Office is closed for business.
"Corporate Trust Office" means the office of the Capital Guarantee Trustee
at which the corporate trust business of the Capital Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Agreement is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, Attn: Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of Capital
Securities.
"Debt" means with respect to any person, whether recourse is to all or a
portion of the assets of such person and whether or not contingent: (i) every
obligation of such person for money borrowed; (ii) every obligation of such
person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such person; (iv) every obligation of such person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another person
and all dividends of another person the payment of which, in either case, such
person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Capital Securities Guarantee.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Capital Securities, to the extent not paid or
made by CFB Capital: (i) any accrued and unpaid Distributions (as defined in
the Trust Agreement) that are required to be paid on such Capital Securities to
the extent CFB Capital shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent CFB Capital has funds available therefor,
with respect to any Capital Securities called for redemption by CFB Capital, and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
CFB Capital (other than in connection with the distribution of Junior
Subordinated Debentures to the Holders in exchange for Capital Securities as
provided in the Trust Agreement), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Capital
Securities to the date of payment, to the extent CFB Capital shall have funds
available therefor, and (b) the amount of assets of CFB Capital remaining
available for distribution to Holders in liquidation of CFB Capital (in either
case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records of
CFB Capital of any Capital Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Capital Guarantee Trustee, any Affiliate of
the Capital Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Capital Guarantee Trustee.
2
<PAGE>
"Indenture" means the Subordinated Indenture dated as of _______________,
1997, among the Guarantor (the "Debenture Issuer") and Wilmington Trust Company,
as trustee, and any indenture supplemental thereto pursuant to which the Junior
Subordinated Debentures are to be issued to the Property Trustee of CFB Capital.
"Junior Subordinated Debentures" means the series of junior subordinated
deferrable interest debt securities of the Guarantor designated the ___% Junior
Subordinated Debentures due 2027 held by the Property Trustee (as defined in the
Trust Agreement) of CFB Capital.
"Majority in liquidation amount of the Capital Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Capital Securities,
voting separately as a class, of more than 50% of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Capital Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Capital Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Capital Guarantee Trustee" means Wilmington Trust Company, until a
Successor Capital Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Capital Securities Guarantee and
thereafter means each such Successor Capital Guarantee Trustee.
"Responsible Officer" means, with respect to the Capital Guarantee Trustee,
any officer within the Corporate Trust Office of the Capital Guarantee Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Capital Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Successor Capital Guarantee Trustee" means a successor Capital Guarantee
Trustee possessing the qualifications to act as Capital Guarantee Trustee under
Section 4.1.
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"Senior and Subordinated Debt" means the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Guarantor whether
or not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Capital Securities Guarantee or to other
Debt which is pari passu with, or subordinated to, the Capital Securities
Guarantee; provided, however, that Senior Debt shall not be deemed to include
(i) any Debt of the Guarantor which when incurred and without respect to any
election under section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Guarantor, (ii) any Debt of the Guarantor
to any of its subsidiaries, (iii) any Debt to any employee of the Guarantor,
(iv) any Debt which by its terms is subordinated to trade accounts payable or
accrued liabilities arising in the ordinary course of business to the extent
that payments made to the holders of such Debt by the holders of the Junior
Subordinated Debentures as a result of the subordination provisions of the
Indenture would be greater than they otherwise would have been as a result of
any obligation of such holders to pay amounts over to the obligees on such trade
accounts payable or accrued liabilities arising in the ordinary course of
business as a result of subordination provisions to which such Debt is subject,
(v) the Junior Subordinated Debentures, and (vi) any other debt securities
issued pursuant to the Indenture.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Capital Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Capital Securities
Guarantee and shall, to the extent applicable, be governed by such provisions;
and
(b) If and to the extent that any provision of this 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 Guarantee Trustee with a
list, in such form as the Capital Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Capital Securities ("List of
Holders") (i) on or before January 1 and July 1 of each year, and (ii) at any
other time within 30 days of receipt by the Guarantor of a written request for a
List of Holders, as of a date no more than 14 days before such List of Holders
is given to the Capital 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
Guarantee Trustee by the Guarantor. The Capital Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The Capital 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 Guarantee Trustee
On or before July 15 of each year, the Capital Guarantee Trustee shall
provide to the Holders of the Capital Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and
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in the manner provided by Section 313 of the Trust Indenture Act. The Capital
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Guarantee Trustee
The Guarantor shall provide to the Capital Guarantee Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act, if any, and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Guarantee Trustee such evidence
of compliance with the conditions precedent, if any, provided for in this
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 Capital Securities may,
by vote, on behalf of the Holders of all of the Capital Securities, waive any
past Event of Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this 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 Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Capital Securities, notices of all Events of
Default actually known to a Responsible Officer of the Capital Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Capital Guarantee Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Capital Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Capital Securities.
(b) The Capital Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Capital Guarantee Trustee shall have received
a properly addressed written notice, or of which a Responsible Officer of the
Capital Guarantee Trustee charged with the administration of the Trust Agreement
shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Trust Agreement shall be deemed to be specifically described in this
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 GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Guarantee Trustee
(a) This Capital Securities Guarantee shall be held by the Capital
Guarantee Trustee for the benefit of the Holders of the Capital Securities, and
the Capital Guarantee Trustee shall not transfer this Capital Securities
Guarantee to any Person except a Holder of Capital Securities exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Capital Guarantee
Trustee on acceptance by such Successor Capital Guarantee Trustee of its
appointment to act as Successor Capital Guarantee Trustee. The right, title and
interest of the Capital Guarantee Trustee shall automatically vest in any
Successor Capital Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Capital Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Capital Guarantee Trustee has occurred and is continuing, the Capital
Guarantee Trustee shall enforce this Capital Securities Guarantee for the
benefit of the Holders of the Capital Securities.
(c) The Capital 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 Capital Securities Guarantee, and no implied covenants shall be read into
this Capital Securities Guarantee against the Capital Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Capital Guarantee Trustee, the Capital Guarantee Trustee shall exercise such of
the rights and powers vested in it by this 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 Capital Securities Guarantee shall be
construed to relieve the Capital 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 Guarantee
Trustee shall be determined solely by the express provisions of
this Capital Securities Guarantee, and the Capital Guarantee
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Capital Securities Guarantee, and no implied covenants or
obligations shall be read into this Capital Securities Guarantee
against the Capital Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Capital
Guarantee Trustee, the Capital 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 Guarantee Trustee and conforming to the
requirements of this 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 Guarantee
Trustee, the Capital Guarantee
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Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Capital
Securities Guarantee;
(ii) the Capital Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Capital Guarantee Trustee, unless it shall be proved that the Capital
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Capital Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Capital Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Capital Guarantee Trustee, or exercising any trust or power conferred upon
the Capital Guarantee Trustee under this Capital Securities Guarantee; and
(iv) no provision of this Capital Securities Guarantee shall
require the Capital 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 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 Capital Securities Guarantee or indemnity,
reasonably satisfactory to the Capital Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Capital Guarantee Trustee may conclusively rely upon,
and shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Capital Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Capital Securities
Guarantee, the Capital Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Capital 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 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 Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.
The Capital Guarantee Trustee shall have the right at
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any time to seek instructions concerning the administration of this Capital
Securities Guarantee from any court of competent jurisdiction.
(vi) The Capital Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Capital
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Capital Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Capital Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Capital 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 Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Capital Guarantee Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Capital Securities Guarantee.
(vii) The Capital 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 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 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
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 Guarantee Trustee or its
agents hereunder shall bind the Holders of the Capital Securities, and the
signature of the Capital 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 Guarantee Trustee
to so act or as to its compliance with any of the terms and provisions of
this Capital Securities Guarantee, both of which shall be conclusively
evidenced by the Capital Guarantee Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Capital Securities
Guarantee the Capital 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 Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
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.
(b) No provision of this Capital Securities Guarantee shall be deemed
to impose any duty or obligation on the Capital 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 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 Guarantee Trustee shall be construed to be a duty.
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SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Capital Securities Guarantee shall be taken
as the statements of the Guarantor, and the Capital Guarantee Trustee does not
assume any responsibility for their correctness. The Capital Guarantee Trustee
makes no representation as to the validity or sufficiency of this Capital
Securities Guarantee.
ARTICLE IV
CAPITAL GUARANTEE TRUSTEE
SECTION 4.1 Capital Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
$50,000,000, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then, for the purposes 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 Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Capital Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Capital Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Capital Guarantee Trustees
(a) Subject to Section 4.2(b), the Capital Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Capital Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Capital Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Capital Guarantee Trustee and delivered to the Guarantor.
(c) The Capital Guarantee Trustee appointed to office shall hold office
until a Successor Capital Guarantee Trustee shall have been appointed or until
its removal or resignation. The Capital Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Capital Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Capital
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in
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writing executed by such Successor Capital Guarantee Trustee and delivered to
the Guarantor and the resigning Capital Guarantee Trustee.
(d) If no Successor Capital Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning Capital
Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Capital Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Capital Guarantee Trustee.
(e) No Capital Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Capital Guarantee Trustee.
(f) Upon termination of this Capital Securities Guarantee or removal or
resignation of the Capital Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Capital Guarantee Trustee all amounts 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 CFB Capital), as and when due, regardless of any defense, right of set-off or
counterclaim that CFB Capital 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 CFB Capital to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Capital Securities
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against CFB Capital
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 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 CFB Capital of any express or implied agreement,
covenant, term or condition relating to the Capital Securities to be performed
or observed by CFB Capital;
(b) the extension of time for the payment by CFB Capital of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Capital Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Capital Securities (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
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the Subordinated Debentures or any extension of the maturity date of the
Subordinated 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 Capital Securities, or any
action on the part of CFB Capital 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, CFB Capital or any of the assets of CFB
Capital;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guarantied hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Capital Guarantee Trustee in
respect of this Capital Securities Guarantee or exercising any trust or power
conferred upon the Capital Guarantee Trustee under this Capital Securities
Guarantee.
(b) Any Holder of Capital Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Capital
Securities Guarantee, without first instituting a legal proceeding against CFB
Capital, the Capital Guarantee Trustee or any other Person.
SECTION 5.5 Guarantee of Payment
This 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 of
Capital Securities against CFB Capital in respect of any amounts paid to such
Holders by the Guarantor under this 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 Capital Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this 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.
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SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of CFB Capital with respect to the Capital Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Capital Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Capital Securities remain outstanding, if there shall have
occurred an Event of Default or an event of default under the Trust Agreement,
then (a) the Guarantor shall not declare or pay any dividend or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of its capital stock, (b) the Guarantor shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Guarantor (including other Junior Subordinated
Debentures) which rank pari passu with or junior in interest to the Junior
Subordinated Debentures or (c) the Guarantor shall not make any guarantee
payments with respect to any guarantee by the guarantor of the debt securities
of any subsidiary of the Guarantor if such guarantee ranks pari passu or junior
in interest to the Junior Subordinated Debentures (other than (a) dividends or
distributions in common stock, (b) any declaration of a dividend in connection
with the implementation of a shareholders' rights plan, or the issuance of stock
under any such plan in the future or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under this Capital Securities Guarantee
and (d) purchases of common stock related to the issuances of common stock or
rights under any of the Guarantor's benefit plans for its directors, officers or
employees).
SECTION 6.2 Ranking
This Capital Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment to
all Senior and Subordinated Debt of the Guarantor.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Capital Securities Guarantee shall terminate upon (i) full payment of
the Redemption Price of all Capital Securities, (ii) upon full payment of the
amounts payable in accordance with the Trust Agreement upon liquidation of CFB
Capital or (iii) upon distribution of the Junior Subordinated Debentures to the
holders of the Capital Securities. Notwithstanding the foregoing, this Capital
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Capital Securities must restore
payment of any sums paid under the Capital Securities or under this Capital
Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this 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 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 of Capital Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Capital Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guaranties and agreements contained in this Capital Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Capital Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all the outstanding Capital Securities. The provisions of Article
VI of the Trust Agreement with respect to meetings of Holders of the Securities
apply to the giving of such approval.
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SECTION 9.3 Notices
All notices provided for in this Capital Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Capital Guarantee Trustee, at the Capital Guarantee
Trustee's mailing address set forth below (or such other address as the Capital
Guarantee Trustee may give notice of to the Holders of the Capital Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Capital Securities):
Community First Bankshares, Inc.
520 Main Avenue
Fargo, ND 58124-0001
Attention: Mark A. Anderson, Chief Financial Officer
(c) If given to any Holder of Capital Securities, at the address set
forth on the books and records of CFB Capital.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Capital Securities Guarantee is solely for the benefit of the Holders
of the Capital Securities and, subject to Section 3.1(a), is not separately
transferable from the Capital Securities.
SECTION 9.5 Governing Law
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MINNESOTA; PROVIDED
THAT THE IMMUNITIES AND THE STANDARD OF CARE OF THE TRUSTEE SHALL BE GOVERNED BY
DELAWARE LAW.
14
<PAGE>
THIS CAPITAL SECURITIES GUARANTEE is executed as of the day and year first
above written.
COMMUNITY FIRST BANKSHARES, INC.,
as Guarantor
By:
------------------------------------------
Name: Donald R. Mengedoth
Title: President and Chief Executive
Officer
WILMINGTON TRUST COMPANY,
As Capital Guarantee Trustee
By:
------------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
15
<PAGE>
[LETTERHEAD]
Exhibit 5.1
January 16, 1997
Community First Bankshares
520 Main Avenue
Fargo, ND 58124-0001
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 filed by
Community First Bankshares, Inc. (the "Company") and CFB Capital I ("CFB
Capital") with the Securities and Exchange Commission on January 16, 1997
relating to a public offering by CFB Capital of up to 2,400,000 __% Cumulative
Capital Securities (the "Capital Securities"), please be advised that as counsel
to the Company, upon examination of such corporate documents and records as we
have deemed necessary or advisable for the purposes of this opinion, it is our
opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Guarantee, when executed and delivered as contemplated by the
Registration Statement, and the Junior Subordinated Debentures, when
issued and paid for as contemplated by the Registration Statement,
will be validly issued obligations of the Company enforceable in
accordance with their terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity.
Capitalized terms used herein shall have the definitions given to such terms in
the Registration Statement. We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement, and to the reference to our firm under
the heading "Legal Matters" in the Prospectus comprising a part of the
Registration Statement.
Very truly yours,
LINDQUIST & VENNUM P.L.L.P.
<PAGE>
Exhibit 5.2
January 16, 1997
CFB Capital I
c/o Community First Bankshares, Inc.
520 Main Avenue
Fargo, North Dakota 58124
Re: CFB CAPITAL I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Community First Bankshares,
Inc., a Delaware corporation (the "Company"), and CFB Capital 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 January 14, 1997, as
filed with the office of the Secretary of State of the State of Delaware (the
"Secretary of State") on January __, 1997;
(b) The Trust Agreement of the Trust, dated as of January 14, 1997
between the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus with respect to the Trust (the "Prospectus"),
relating to the Capital Securities of the Trust representing preferred undivided
beneficial interests in the assets of the Trust (each, a "Capital Security" and
collectively, the "Capital Securities"), filed by the Company and the Trust with
the Securities and Exchange Commission on or about January 16, 1997;
(d) A form of Amended and Restated Trust Agreement for the Trust, to be
entered into between the Company, the trustees of the Trust named therein, and
the holders, from time to time, of the undivided beneficial interests in the
assets of the Trust (including Exhibits C and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated January 16, 1997,
obtained from the Secretary of State.
<PAGE>
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust Agreement
and the Certificate of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Capital Security is to be issued by the Trust (collectively, the "Capital
Security Holders") of a Capital Security Certificate for such Capital Security
and the payment for such Capital Security, in accordance with the Trust
Agreement and the Registration Statement, and (vii) that the Capital Securities
are issued and sold to the Capital Security Holders in accordance with the Trust
Agreement 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 a business
<PAGE>
trust under the Delaware Business Trust Act.
2. The Capital Securities of the Trust 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 the Capital Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. We hereby consent to
the use of our name under the heading "Legal Matters" in the Prospectus. In
giving the foregoing consents, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. Except as stated above, without our prior
written consent, this opinion may not be furnished or quoted to, or relied upon
by, any other person for any purpose.
Very truly yours,
Richards, Layton & Finger
CDK
<PAGE>
Exhibit 12.1
COMMUNITY FIRST BANKSHARES, INC.
CALCULATION OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Nine Months Ended Year ended December 31,
September 30,
----------------- --------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income before taxes & extraordinary
item and cumulative effect of
accounting change. . . . . . . . . . . . . $40,457 $33,627 $47,161 $36,681 $29,030 $23,654 $18,567
Add: fixed charges . . . . . . . . . . . . . 71,371 61,630 85,426 55,229 47,271 50,870 65,512
------- ------- ------- ------- ------- ------- -------
Earnings including interest
expense - deposits . . . . . . . . . . (a) 111,828 95,257 132,587 91,910 76,301 74,524 84,079
Less: interest expense - deposits. . . . . . (60,074) (51,411) (71,780) (46,560) (42,873) (47,727) (59,883)
------- ------- ------- ------- ------- ------- -------
Earnings excluding interest
expense - deposits . . . . . . . . . . (b) $51,754 $43,846 $60,807 $45,350 $33,428 $26,797 $24,196
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Fixed charges:
Interest expense - deposits. . . . . . . . $60,074 $51,411 $71,780 $46,560 $42,873 $47,727 $59,883
Interest expense - borrowings. . . . . . . 9,450 8,314 11,111 6,908 4,398 3,143 4,639
Interest expense on capital leases . . . . 0 0 0 0 0 0 0
Dividends on preferred stock (gross) . . . 1,847 1,905 2,535 1,761 0 0 990
------- ------- ------- ------- ------- ------- -------
Fixed charges including interest
expense - deposits . . . . . . . . . . (c) 71,371 61,630 85,426 55,229 47,271 50,870 65,512
Less: interest expense - deposits. . . . . . (60,074) (51,411) (71,780) (46,560) (42,873) (47,727) (59,883)
------- ------- ------- ------- ------- ------- -------
Fixed charges excluding interest
expense - deposits . . . . . . . . . . (d) $11,297 $10,219 $13,646 $8,669 $4,398 $3,143 $5,629
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Preferred dividends. . . . . . . . . . . . . $1,208 $1,208 $1,610 $1,091 $0 $0 $655
Effective tax rate . . . . . . . . . . . . . 34.59% 36.57% 36.49% 38.04% 37.12% 36.13% 33.85%
Preferred dividends - grossed
up (1 - tax rate). . . . . . . . . . . . . $1,847 $1,905 $2,535 $1,761 $0 $0 $990
Earnings to combined fixed charges
and preferred stock dividends:
Excluding interest on deposits ((b)/(d)) . 4.58x 4.29x 4.46x 5.23x 7.60x 8.53x 4.30x
Including interest on deposits ((a)/(c)) . 1.57x 1.55x 1.55x 1.66x 1.61x 1.46x 1.28x
CALCULATION OF FULLY DILUTED
EARNINGS WITH REGARD TO
CONVERTIBIEL DEBENTURES
Nine Months Ended Year ended December 31,
September 30,
----------------- --------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
Income before taxes. . . . . . . . . . . . . $40,457 $33,627 $47,161 $36,681 $29,030 $23,654 $18,567
Interest expense on convertible
debentures . . . . . . . . . . . . . . . . 0 86 137 415 126 0 0
------- ------- ------- ------- ------- ------- -------
Adjusted income before interest
on convertible debentures . . . . . . . . 40,457 33,713 47,298 37,096 29,156 23,654 18,567
Adjusted income tax provision. . . . . . . . 13,995 12,298 17,259 14,106 10,822 8,546 6,285
------- ------- ------- ------- ------- ------- -------
Adjusted net income. . . . . . . . . . . . . $26,462 $21,415 $30,039 $22,990 $18,334 $15,108 $12,282
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
</TABLE>
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Community First
Bankshares, Inc. for the registration of $60,000,000 of Capital Securities and
to the incorporation by reference therein of our report dated January 25, 1996,
with respect to the consolidated financial statements of Community First
Bankshares, Inc. incorporated by reference in its Annual Report (Form 10-K) for
the year ended December 31, 1995, and our report dated January 25, 1996, except
for Note 3, as to which the date is December 18, 1996, with respect to the
supplemental consolidated financial statements of Community First Bankshares,
Inc. included in its Current Report on Form 8-K/A dated January 16, 1997, both
filed with the Securities and Exchange Commission.
Minneapolis, Minnesota
January 16, 1997
Ernst & Young LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS' OF
MINOWA BANCSHARES, INC. AND SUBSIDIARIES
To the Board of Directors
Minowa Bancshares, Inc. and Subsidiaries
Decorah, Iowa
We consent to the reference to our firm under the caption "Experts" and to
the inclusion of our audit report dated February 1, 1995, with respect to the
audit of the consolidated financial statements of Minowa Bancshares, Inc. and
Subsidiaries included in the Registration Statement (Form S-3) and related
Prospectus of Community First Bankshares, Inc. for the registration of
$60,000,000 of Capital Securities.
Decorah, Iowa
January 13, 1997
Hacker, Nelson & Co., P.C.
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to
the use of our audit report dated January 26, 1995, with respect to the
consolidated financial statements of First Community Bankshares, Inc. and
subsidiaries incorporated by reference in the Registration Statement (Form S-3)
and related Prospectus of Community First Bankshares, Inc. for the registration
of $60,000,000 of capital securities.
Fortner, Bayens, Levkulich and Co., P.C.
Denver, Colorado
January 13, 1997
<PAGE>
Exhibit 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
and to all references to our firm included in or made a part of this
registration statement.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
January 16, 1997
<PAGE>
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
COMMUNITY FIRST BANKSHARES, INC.
(Exact name of obligor as specified in its charter)
Delaware 46-0391436
(State of incorporation) (I.R.S. employer identification no.)
520 Main Avenue
Fargo, North Dakota 58124-0001
(Address of principal executive offices) (Zip Code)
___% Junior Subordinated Debentures
of Community First Bankshares, Inc.
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 14th day
of January, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest:/s/ W. Chris Sponenberg By: /s/ Norma P. Closs
------------------------------ ------------------------------
Assistant Secretary Name: Norma P. Closs
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is WILMINGTON TRUST COMPANY whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
<PAGE>
Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
2
<PAGE>
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual
3
<PAGE>
owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and from
time to time to vary or realize such investments; to issue bonds and
secure the same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when the Board
of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and
convey real and personal property of any name and nature and any
estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
4
<PAGE>
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article FOURTH, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of
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<PAGE>
stock and whether such dividends shall be cumulative or non-
cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article FOURTH), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article FOURTH), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to
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<PAGE>
receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article FOURTH and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article FOURTH that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
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(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number of directors constituting the whole Board
shall be twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the
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Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
9
<PAGE>
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from time
to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
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<PAGE>
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on
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<PAGE>
such business combination, or immediately prior to the consummation of any
such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
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(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON DECEMBER 21, 1995
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held on the
third Thursday of each month at the principal office of the Company, or at such
other place and
<PAGE>
time as may be designated by the Board of Directors, the Chairman of the Board,
or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine
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members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall
be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
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Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over
the Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at least once a month. A majority of
its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over
the Audit Division in all matters however subject to the approval of the Board
of Directors; it shall consider all matters brought to its attention by the
officer in charge of the Audit Division, review all reports of examination of
the Company made by any governmental agency or such independent auditor employed
for that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than
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<PAGE>
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon
all matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at
any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board of Directors shall preside at
all
5
<PAGE>
meetings of the Board of Directors at which the Chairman of the Board shall not
be present and shall have such further authority and powers and shall perform
such duties as the Board of Directors or the Chairman of the Board may from time
to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
6
<PAGE>
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of
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<PAGE>
any dividend, or to any allotment or rights, or to exercise any rights in
respect of any change, conversion or exchange of capital stock, or in connection
with obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, 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, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, PROVIDED, HOWEVER,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In
any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses
9
<PAGE>
under applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 14, 1997 By: /s/ Norma P. Closs
------------------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------------------------------------- ------------------
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1996.
------------
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . . . . . . . 198,288
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . . . . . . . . . 489,428
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . . 783,718
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . .19,000
Securities purchased under agreements to resell. . . . . . . . . . . . . 48,500
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,620,289
LESS: Allowance for loan and lease losses. . . . . . 49,721
LESS: Allocated transfer risk reserve. . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve. 3,570,568
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . . . .83,675
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . 4,607
Investments in unconsolidated subsidiaries and associated companies. . . . . 85
Customers' liability to this bank on acceptances outstanding . . . . . . . . . 0
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,131
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,592
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,303,592
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . 3,457,641
Noninterest-bearing . . . . . . . . 740,731
Interest-bearing. . . . . . . . . 2,716,910
Federal funds purchased. . . . . . . . . . . . . . . . . . . . . . . . . 135,889
Securities sold under agreements to repurchase . . . . . . . . . . . . . 213,617
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . .94,999
Trading liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money:. . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less. . . . . . . . . . . . . 844,000
With original maturity of more than one year. . . . . . . . . . . . .28,000
Mortgage indebtedness and obligations under capitalized leases . . . . . . 0
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . 0
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . 0
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,818
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . 4,877,964
Limited-life preferred stock and related surplus . . . . . . . . . . . . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62,119
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . 363,705
Net unrealized holding gains (losses) on available-for-sale securities . (696)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . 425,628
Total liabilities, limited-life preferred stock, and equity capital. . 5,303,592
2
<PAGE>
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
COMMUNITY FIRST BANKSHARES, INC.
CFB CAPITAL I
(Exact name of obligor as specified in its charter)
Delaware 46-0391436
Delaware
(State of incorporation) (I.R.S. employer identification no.)
520 Main Avenue
Fargo, North Dakota 58124-0001
(Address of principal executive offices) (Zip Code)
___% Cummulative Capital Securities of
CFB Capital I
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor
is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b)
of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 14th day
of January, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ W. Chris Sponenberg By:/s/ Norma P. Closs
------------------------- -----------------------
Assistant Secretary Name: Norma P. Closs
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is WILMINGTON TRUST COMPANY whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
<PAGE>
Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
2
<PAGE>
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual
3
<PAGE>
owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and from
time to time to vary or realize such investments; to issue bonds and
secure the same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when the Board
of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and
convey real and personal property of any name and nature and any
estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
4
<PAGE>
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article FOURTH, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of
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<PAGE>
stock and whether such dividends shall be cumulative or non-
cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article FOURTH), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article FOURTH), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to
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receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article FOURTH and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article FOURTH that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
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(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number of directors constituting the whole Board
shall be twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the
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Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
9
<PAGE>
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from time
to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
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(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on
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such business combination, or immediately prior to the consummation of any
such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
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(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON DECEMBER 21, 1995
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held on the
third Thursday of each month at the principal office of the Company, or at such
other place and
<PAGE>
time as may be designated by the Board of Directors, the Chairman of the Board,
or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine
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members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall
be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
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Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over
the Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at least once a month. A majority of
its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over
the Audit Division in all matters however subject to the approval of the Board
of Directors; it shall consider all matters brought to its attention by the
officer in charge of the Audit Division, review all reports of examination of
the Company made by any governmental agency or such independent auditor employed
for that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than
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five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon
all matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at
any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board of Directors shall preside at
all
5
<PAGE>
meetings of the Board of Directors at which the Chairman of the Board shall not
be present and shall have such further authority and powers and shall perform
such duties as the Board of Directors or the Chairman of the Board may from time
to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
6
<PAGE>
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of
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any dividend, or to any allotment or rights, or to exercise any rights in
respect of any change, conversion or exchange of capital stock, or in connection
with obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, 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, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, PROVIDED, HOWEVER,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In
any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses
9
<PAGE>
under applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
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<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 14, 1997 By: /s/ Norma P. Closs
-----------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember
banks and savings banks with state publication
requirements. It has not been approved by any
state banking authorities. Refer to your
appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
---------------------------------------------------------- ----------------
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1996.
------------
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . . . . . . 198,288
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . . . . . . . . 489,428
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . 783,718
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000
Securities purchased under agreements to resell. . . . . . . . . . . . . 48,500
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,620,289
LESS: Allowance for loan and lease losses. . . . . . 49,721
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve. 3,570,568
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . . . 83,675
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . 4,607
Investments in unconsolidated subsidiaries and associated companies. . . . 85
Customers' liability to this bank on acceptances outstanding . . . . . . . . 0
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,131
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,592
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,303,592
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . 3,457,641
Noninterest-bearing . . . . . . . . 740,731
Interest-bearing. . . . . . . . . . 2,716,910
Federal funds purchased. . . . . . . . . . . . . . . . . . . . . . . . . 135,889
Securities sold under agreements to repurchase . . . . . . . . . . . . . 213,617
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . .94,999
Trading liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money:. . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less. . . . . . . . . . . . . 844,000
With original maturity of more than one year. . . . . . . . . . . . 28,000
Mortgage indebtedness and obligations under capitalized leases . . . . . . 0
Bank's liability on acceptances executed and outstanding . . . . . . . . . . 0
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . 0
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . 103,818
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . 4,877,964
Limited-life preferred stock and related surplus . . . . . . . . . . . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62,119
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . 363,705
Net unrealized holding gains (losses) on available-for-sale securities . . (696)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . 425,628
Total liabilities, limited-life preferred stock, and equity capital. . 5,303,592
2
<PAGE>
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
COMMUNITY FIRST BANKSHARES, INC.
(Exact name of obligor as specified in its charter)
Delaware 46-0391436
(State of incorporation) (I.R.S. employer identification no.)
520 Main Avenue
Fargo, North Dakota 58124-0001
(Address of principal executive offices) (Zip Code)
Guarantee of Community First Bankshares, Inc. with respect to
the ___% Cummulative Capital Securities
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 14th day
of January, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ W. Chris Sponenberg By: /s/ Norma P. Closs
------------------------------ ------------------------------
Assistant Secretary Name: Norma P. Closs
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is WILMINGTON TRUST COMPANY whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
<PAGE>
Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
2
<PAGE>
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual
3
<PAGE>
owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and from
time to time to vary or realize such investments; to issue bonds and
secure the same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when the Board
of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and
convey real and personal property of any name and nature and any
estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
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(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article FOURTH, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of
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<PAGE>
stock and whether such dividends shall be cumulative or non-
cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article FOURTH), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article FOURTH), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to
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receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article FOURTH and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article FOURTH that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
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(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number of directors constituting the whole Board
shall be twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the
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Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
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NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from time
to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
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(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on
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such business combination, or immediately prior to the consummation of any
such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
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(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON DECEMBER 21, 1995
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held on the
third Thursday of each month at the principal office of the Company, or at such
other place and
<PAGE>
time as may be designated by the Board of Directors, the Chairman of the Board,
or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine
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members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall
be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
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Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over
the Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at least once a month. A majority of
its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over
the Audit Division in all matters however subject to the approval of the Board
of Directors; it shall consider all matters brought to its attention by the
officer in charge of the Audit Division, review all reports of examination of
the Company made by any governmental agency or such independent auditor employed
for that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than
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five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon
all matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at
any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board of Directors shall preside at
all
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meetings of the Board of Directors at which the Chairman of the Board shall not
be present and shall have such further authority and powers and shall perform
such duties as the Board of Directors or the Chairman of the Board may from time
to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
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There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of
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any dividend, or to any allotment or rights, or to exercise any rights in
respect of any change, conversion or exchange of capital stock, or in connection
with obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, 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, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, PROVIDED, HOWEVER,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In
any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses
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<PAGE>
under applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
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EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 14, 1997 By: /s/ Norma P. Closs
------------------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------------------------------------- ------------------
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1996.
------------
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . . . . . . . 198,288
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . . . . . . . . . 489,428
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . . 783,718
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . .19,000
Securities purchased under agreements to resell. . . . . . . . . . . . . 48,500
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,620,289
LESS: Allowance for loan and lease losses. . . . . . 49,721
LESS: Allocated transfer risk reserve. . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve. 3,570,568
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . . . .83,675
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . 4,607
Investments in unconsolidated subsidiaries and associated companies. . . . . 85
Customers' liability to this bank on acceptances outstanding . . . . . . . . . 0
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,131
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,592
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,303,592
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . 3,457,641
Noninterest-bearing . . . . . . . . 740,731
Interest-bearing. . . . . . . . . 2,716,910
Federal funds purchased. . . . . . . . . . . . . . . . . . . . . . . . . 135,889
Securities sold under agreements to repurchase . . . . . . . . . . . . . 213,617
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . .94,999
Trading liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money:. . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less. . . . . . . . . . . . . 844,000
With original maturity of more than one year. . . . . . . . . . . . .28,000
Mortgage indebtedness and obligations under capitalized leases . . . . . . 0
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . 0
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . 0
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,818
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . 4,877,964
Limited-life preferred stock and related surplus . . . . . . . . . . . . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62,119
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . 363,705
Net unrealized holding gains (losses) on available-for-sale securities . (696)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . 425,628
Total liabilities, limited-life preferred stock, and equity capital. . 5,303,592
2
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Exhibit 99.1
REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
To: Mountain Parks Financial Corp.:
We have audited the consolidated statements of financial condition of
Mountain Parks Financial Corp. (a Delaware corporation) and subsidiaries as of
December 31, 1995 and 1994, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995, not presented separately herein. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, not presented
separately herein, present fairly, in all material aspects, the financial
position of Mountain Parks Financial Corp. and subsidiaries as of December 31,
1995 and 1994, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.
As explained in Note 1 to the financial statements, effective January 1,
1994, the Company changed its method of accounting for securities to comply with
Statement of Financial Accounting Standards No. 115 "ACCOUNTING FOR CERTAIN
INVESTMENTS IN DEBT AND EQUITY SECURITIES."
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota
March 1, 1996
