<PAGE>
As filed with the Securities and Exchange Commission on October 9, 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
----------------------
COMMUNITY FIRST BANKSHARES, INC. CFB CAPITAL II
(Exact name of registrant as (Exact name of co-registrant as
specified in its charter) specified in its charter)
DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
46-0391436 Applied For
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
520 Main Avenue c/o Community First Bankshares, Inc.
Fargo, North Dakota 58124-0001 520 Main Avenue
(701) 298-5600 Fargo, North Dakota 58124-0001
(Address including zip code, (701) 298-5600
and telephone number,including (Address including zip code,
area code, of registrant's principal and telephone number, including
executive office) area code, of co-registrant's
principal executive office)
______________________________________________________________________
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:
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
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. / /
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Amount to be Offering Aggregate Registration
Securities to be Registered Registered(1) Price Offering Fee
Per Unit(1) Price
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<S> <C> <C> <C> <C>
___% Cumulative Capital Securities of
CFB Capital II........................ 1,600,000 $25.00 $40,000,000 $12,121
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___% Junior Subordinated Debentures of
Community First Bankshares, Inc. (2) (2) -- -- --
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Guarantee of Community First Bank-
shares, Inc. with respect to the ___%
Cumulative Capital Securities (3)..... (3) -- -- --
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Total Registration Fee ................. -- -- -- $12,121
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</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 II, with the proceeds of
the sale of the ____% Cumulative Capital Securities (the "Capital
Securities"). No separate consideration will be received for the
Junior Subordinated Debentures. The Junior Subordinated Debentures
may later be distributed for no additional consideration to the
holders of the Capital Securities upon CFB Capital II'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 Amended and Restated 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.
<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>
Subject to completion, dated October __, 1997
PROSPECTUS
DATED _____________, 1997
1,600,000 CAPITAL SECURITIES
CFB Capital II
____% Cumulative Capital Securities
(Liquidation Amount $25 per Capital Security)
Fully and Unconditionally Guaranteed, as Described Herein, by
[CFB LOGO]
The _____% Cumulative Capital Securities (the "Capital Securities") offered
hereby represent undivided beneficial interests in the assets of CFB Capital
II, a statutory business trust formed under the laws of the State of Delaware
("CFB Capital II"). 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 II (the "Common Securities"
and, collectively with the Capital Securities, the "Trust Securities"). CFB
Capital II 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 December 15, 2027, which date may be
shortened (such date, as it may be shortened, the "Stated Maturity") to a
date not earlier than December 15, 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 II Held by the Company."
(CONTINUED ON NEXT PAGE)
SEE "RISK FACTORS" COMMENCING ON PAGE __ 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.
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Price to Underwriting Proceeds to
Public Commission (1) CFB Capital II (2)(3)
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Per Capital Security... $25.00 (2)
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Total.................. (2)
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(1) The Company and CFB Capital II have agreed to indemnify the Underwriters
named herein 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
$__________.
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.
<PAGE>
PIPER JAFFRAY INC. DAIN BOSWORTH
INCORPORATED
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(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 March, June, September and
December of each year (subject to possible deferral as described below),
commencing March 15, 1998, 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, Amended and Restated 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 II'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
II 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 II.
The Guarantee does not cover payment of Distributions when CFB Capital II
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 II, CFB Capital II 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 obligations of the Company under the
Guarantee, the Junior Subordinated Debentures and other documents described
herein will rank PARI PASSU with the Company's current and future obligations
under debt securities (and guarantees in respect of those debt securities)
initially issued to any trust, or a trustee of a trust, partnership or other
entity affiliated with the Company that is, directly or indirectly, a
financing vehicle of the Company ("Trust Related Securities") in connection
with the issuance by that entity of preferred securities or other securities.
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 December 15, 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, an
Investment Company Event or a Capital Treatment 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)
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<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
The Company will have the right at any time to terminate CFB Capital II and
cause the Junior Subordinated Debentures to be distributed to the holders of
the Trust Securities in liquidation of CFB Capital II, 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. On a pro forma basis, reflecting the subsequent issuance
of additional long-term debt incurred in connection with the acquisition of
KeyBank National Association, Cheyenne, Wyoming ("KeyBank Wyoming"), at June
30, 1997 Senior and Subordinated Debt would have been approximately $109
million. 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 II, after satisfaction of
liabilities to creditors of CFB Capital II 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 DECEMBER __, 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," "continue," "believe," "plan" and "pro forma" or the negative
thereof or other variations thereon or comparable terminology. The statements
in "Risk Factors" beginning on page 16 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.
4
<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 have been filed by the Company with the Commission
and are incorporated herein by reference: (i) the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996, as amended on Form 10-K/A
filed on May 8, 1997; (ii) the Company's Form 10-Q for the quarters ended March
31 and June 30, 1997; and (iii) the Company's Form 8-K report filed on July 29,
1997, as amended on Form 8-K/A filed on September 22, 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.
___________
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE CAPITAL
SECURITIES, INCLUDING OVER-ALLOTMENT AND STABILIZING TRANSACTIONS IN SUCH
SECURITIES. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
5
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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, REFERENCES TO THE COMPANY INCLUDE
THE COMPANY AND ITS SUBSIDIARIES.
THE COMPANY
Community First Bankshares, Inc., a Delaware corporation (the "Company"),
is a multi-bank holding company that as of August 31, 1997 operated banks and
bank branches (the "Banks") in 103 communities in Colorado, Iowa, Minnesota,
Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming and had total assets
of approximately $4.2 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
investment services.
The Company's strategy is to operate and continue to acquire banks and
bank branches in communities which generally have populations between 3,000
and 50,000 and are located in the Company's key target acquisition states of
Arizona, 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 seventeen
state area is collectively referred to as the "Acquisition Area"). Such
communities are believed to provide the Company with the opportunity for a
stable, relatively low-cost deposit base. The individual banks and bank
branches sought to be acquired by the Company generally have approximately
$20 million to $150 million in assets.
On September 10, 1997, the Company entered into an Office Purchase and
Assumption Agreement (the "Branch Purchase Agreement") to acquire 37 branch
banks located in Arizona, Colorado and Utah (the "Bank One Branches") from
three subsidiary banks of Banc One Corporation. At June 30, 1997, the Bank One
Branches had total deposits of $639 million and loans of $70 million. Under the
terms of the Branch Purchase Agreement, the Company will pay a purchase price
premium equal to 6% of the deposits of the Bank One Branches at closing. This
premium is estimated to be $38.3 million based upon deposit levels at June 30,
1997. Consummation of the Branch Purchase Agreement is contingent upon
regulatory approval, among other things, and is anticipated to occur during the
fourth quarter of 1997. The acquisition will be accounted for as an acquisition
of assets and assumption of liabilities and will result in the recognition by
the Company of approximately $38.3 million in deposit-based intangibles. See
"Recent Developments - Pending Acquisitions."
On August 22 and August 28, 1997, respectively, the Company entered into
separate merger agreements to acquire First National Summit Bankshares, Inc.,
Gunnison, Colorado ("Summit") and Republic National Bancorp, Inc., Phoenix,
Arizona ("Republic"). As of June 30, 1997, Summit had total assets of
approximately $86 million and banking offices in five Colorado communities, and
Republic had total assets of approximately $53 million and one banking office
in Phoenix, Arizona. On completion of the Republic and Summit mergers, and
subject to adjustments set forth in the respective merger agreements, the
Company expects to issue approximately 368,500 shares of its common stock to the
holders of Republic common stock and approximately 400,000 shares of its common
stock to the holders of Summit common stock, respectively. In addition, the
holders of Summit preferred stock will receive $100 per share surrendered plus
accrued but unpaid dividends to the effective time of the merger. Consummation
of the Summit and Republic transactions is contingent upon regulatory approval,
among other things, and is anticipated to occur during the fourth quarter of
1997. Each of these business combinations is expected to be accounted for as a
pooling of interests. See "Recent Developments - Pending Acquisitions."
On July 14, 1997, the Company acquired KeyBank National Association,
Cheyenne, Wyoming ("KeyBank Wyoming"), a subsidiary of KeyCorp, for a cash
purchase price of approximately $135 million. As of June 30, 1997, KeyBank
Wyoming had total assets of approximately $1.1 billion and banking offices in 24
communities in Wyoming. The transaction was accounted for as a business
combination using the purchase method of accounting and resulted in the
recognition of goodwill by the Company of approximately $60 million. See
"Recent Developments - Significant Acquisitions."
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
6
<PAGE>
communities. The facilities in two of these communities were sold following
the acquisition. At September 30, 1996, Mountain Parks had total assets of
approximately $581.8 million. The Company issued approximately 5.2 million
shares of stock for a total transaction value of approximately $142.2
million, based upon the market value of the shares as of the date of closing.
The transaction was a business combination accounted for as a pooling of
interests. See "Recent Developments - Significant Acquisitions."
The Company provides the Banks with the advantages of affiliation with a
multi-bank holding company, such as access to its lines of financial services,
including trust products and administration, insurance and investment services,
data processing services, credit policy formulation and review, investment
management and specialized staff support, while granting substantial autonomy to
managers of the Banks with respect to day-to-day operations, customer service
decisions and marketing. The 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.
CFB CAPITAL II
CFB Capital II 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 October 8, 1997. CFB Capital
II'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 II 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 II, and payments by the Company under the Junior Subordinated Debentures
and the Expense Agreement will be the sole revenues of CFB Capital II. 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 II 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 II. CFB Capital II has a term of 31 years, but may
terminate earlier as provided in the Trust Agreement.
CFB Capital II'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
Capital Securities issuer . . . . . CFB Capital II
Securities offered . . . . . . . . 1,600,000 Capital Securities. The Capital
Securities represent undivided beneficial
interests in CFB Capital II'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 March, June, September and
December of each year, commencing on
March 15, 1998 (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
7
<PAGE>
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 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 December 15, 2027, which date
may be shortened (such date, as it may
be shortened, the "Stated Maturity") to a
date not earlier than December 15, 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 December 15, 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, an
Investment Company Event or a Capital
Treatment 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 II and cause
the Junior Subordinated Debentures to
be distributed to holders of Capital
Securities in liquidation of CFB
Capital II, subject to 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. See "Description of the
Capital Securities - Distribution of
Junior Subordinated Debentures."
8
<PAGE>
Guarantee . . . . . . . . . . . . . Taken together, the Company's
obligations under various documents
described herein, including the
Guarantee, provide a full guarantee of
payments by CFB the Guarantee, the
Company guarantees the payment of
Distributions by CFB Capital II 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 Capital II of
distributions and other amounts due
on the Capital Securities. Under
defined herein) to the extent of
funds held by CFB Capital II. If
CFB Capital II 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 II held by
the Company, except as described under
"Description of the Capital
Securities - Subordination of Common
Securities of CFB Capital II 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 and
will rank PARI PASSU with all current
and future Trust Related Securities.
On a pro forma basis, reflecting the
subsequent issuance of additional
long-term debt incurred in connection
with the acquisition of KeyBank Wyoming,
at June 30, 1997 Senior and Subordinated
Debt would have been approximately
$109 million. At June 30, 1997,
$60 million in Trust Related Securities
were outstanding. There is no
limit on the amount of Senior and
Subordinated Debt or Trust Related
Securities that may be issued in the
future. 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 Banks.
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 Capital II and certain other
matters described herein. See
"Description of the Capital
Securities - Voting Rights; Amendment
of Trust Agreement."
Proposed Nasdaq
National Market Symbol . . . . . . CFBXZ.
Use of Proceeds;
Purpose of Offering . . . . . . . The proceeds to CFB Capital II from the
sale of the Capital Securities offered
hereby will be invested by CFB Capital II
in the unior Subordinated Debentures of
the Company. The Company intends to use
the net proceeds from the issuance of
the Junior Subordinated Debentures, along
with the proceeds of a proposed Common
Stock offering, to capitalize its bank
subsidiaries that are acquiring the Bank
One Branches. The principal purpose of
the offering is to increase the
Company's Tier 1 capital under the
capital guidelines of the Federal
Reserve in connection with the
acquisition of the Bank One
Branches. See "Use of Proceeds;
Purpose of Offering."
9
<PAGE>
SUMMARY 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, 1996 is derived from the audited consolidated
financial statements of the Company, and related notes thereto, incorporated
herein by reference. The summary financial data as of and for the six months
ended June 30, 1997 and 1996 have been derived from the Company's unaudited
consolidated financial statements. The unaudited consolidated 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 six months ended June 30, 1997
are not necessarily indicative of the results to be expected for the entire
year. The summary financial data should be read in conjunction with the
consolidated financial statements of the Company, and the related notes
thereto, and Management's Discussion and Analysis of Financial Condition and
Results of Operations incorporated by reference in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996, which report is
incorporated herein by reference.
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended December 31,
------------------- ---------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
HISTORICAL OPERATING DATA:
Interest income . . . . . . $126,903 $109,201 $229,426 $192,868 $143,237 $121,146 $115,309
Interest expense . . . . . 51,089 45,522 95,234 82,891 53,468 47,271 50,870
-------- -------- -------- -------- -------- -------- --------
Net interest income . . . . 75,814 63,679 134,192 109,977 89,769 73,875 64,439
Provision for loan losses . 5,032 2,331 6,757 2,711 1,839 2,149 2,433
-------- -------- -------- -------- -------- -------- --------
Net interest income after
provision for loan losses 70,782 61,348 127,435 107,266 87,930 71,726 62,006
Noninterest income . . . . . 19,968 12,617 27,370 22,488 18,992 18,158 14,640
Noninterest expense . . . . 57,716 46,657 104,288 82,593 70,241 60,854 52,992
-------- -------- -------- -------- -------- -------- --------
Income before income taxes,
extraordinary item and
cumulative effect of
accounting change . . . . 33,034 27,308 50,517 47,161 36,681 29,030 23,654
Provision for income taxes . 11,102 9,439 18,007 17,208 13,952 10,775 8,546
-------- -------- -------- -------- -------- -------- --------
Income before extraordinary
item and cumulative effect
of accounting change . . . 21,932 17,869 32,510 29,953 22,729 18,255 15,108
Extraordinary item, net of
tax (1) . . . . . . . . . . (265) -- -- -- -- -- --
Cumulative effect of accounting
change . . . . . . . . . . -- -- -- -- -- 359 --
-------- -------- -------- -------- -------- -------- --------
Net income . . . . . . . . . 21,667 17,869 32,510 29,953 22,729 18,614 15,108
Dividends on preferred
stock (2) . . . . . . . . -- 805 1,610 1,610 1,091 -- --
-------- -------- -------- -------- -------- -------- --------
Net income applicable to
common equity . . . . . . $21,667 $17,064 $30,900 $28,343 $21,638 $18,614 $15,108
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Earnings per common and
common equivalent share:
Primary earnings per
share before
extraordinary item and
cumulative effect of
accounting change . . . $1.20 $1.04 $1.85 $1.82 $1.48 $1.29 $1.07
Extraordinary item, net of
tax (1) . . . . . . . . . (0.02) -- -- -- -- -- --
Cumulative effect of
accounting change . . . . -- -- -- -- -- 0.03 --
Primary earnings per share $1.18 $1.04 $1.85 $1.82 $1.48 $1.32 $1.07
Fully diluted earnings per
share before extraordinary
item and cumulative
effect of accounting
change . . . . . . . . . . $1.17 $1.00 $1.79 $1.74 $1.42 $1.27 $1.07
Extraordinary item, net of
tax (1) . . . . . . . . . (0.02) -- -- -- -- -- --
Cumulative effect of
accounting change . . . . -- -- -- -- -- 0.03
Fully diluted earnings
per share . . . . . . . . $1.15 $1.00 $1.79 $1.74 $1.42 $1.30 $1.07
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended December 31,
---------------------- ----------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Average common shares
outstanding:
Primary . . . . . . . . 18,343,078 16,451,408 16,699,021 15,543,129 14,580,309 14,098,585 14,080,526
Fully diluted . . . . . 18,773,723 17,923,147 18,154,966 17,276,050 16,136,433 14,396,532 14,087,606
HISTORICAL OPERATING RATIOS
AND OTHER DATA:
Return on average assets (3) 1.41% 1.30% 1.13% 1.24% 1.13% 1.10% 1.04%
Return on average common
stockholders' equity (3) 18.22% 18.27% 15.69% 18.19% 16.77% 16.64% 15.10%
Net interest margin (3) . . 5.53% 5.24% 5.32% 5.06% 4.95% 4.74% 4.85%
Net charge-offs to average
loans (3) . . . . . . . . 0.21% 0.12% 0.22% 0.17% 0.00% 0.08% 0.33%
Ratio of earnings to fixed
charges (4):
Excluding interest on
deposits . . . . . . 4.86x 4.96x 4.14x 4.46x 5.23x 7.60x 8.53x
Including interest on
deposits . . . . . . 1.65x 1.58x 1.52x 1.55x 1.66x 1.61x 1.46x
HISTORICAL FINANCIAL
CONDITION DATA (END
OF PERIOD):
Assets . . . . . . . . . . $3,164,899 $2,818,818 $3,116,398 $2,769,976 $2,130,619 $1,883,794 $1,576,275
Loans . . . . . . . . . . 2,175,593 1,851,429 2,064,108 1,767,193 1,330,146 1,037,666 813,550
Investment securities (5) . 711,357 723,213 729,236 717,342 613,239 653,722 579,078
Deposits . . . . . . . . . 2,470,691 2,322,394 2,537,440 2,359,716 1,794,565 1,627,989 1,374,859
Long-term debt . . . . . . 78,566 39,086 46,750 81,288 38,092 48,354 18,015
Preferred securities of
subsidiary (6) . . . . . 60,000 -- -- -- -- -- --
Preferred stockholders'
equity (2) . . . . . . -- 23,000 22,988 23,000 23,000 -- --
Common stockholders' equity 261,385 190,999 221,583 181,004 134,701 125,071 103,911
Book value per common share 14.00 11.80 12.92 11.25 9.23 8.78 7.64
Tangible book value per
common share . . . . . . 11.88 9.64 10.63 9.08 8.09 7.93 7.01
HISTORICAL FINANCIAL CONDITION
RATIOS (END OF PERIOD):
Nonperforming assets to total
loans and OREO . . . . . . 0.77% 0.38% 0.70% 0.31% 0.34% 0.62% 1.13%
Allowance for loan losses to
total loans . . . . . . . 1.39% 1.30% 1.27% 1.29% 1.30% 1.38% 1.38%
Allowance for loan losses to
nonperforming loans . . . 203% 479% 201% 608% 537% 296% 224%
REGULATORY CAPITAL RATIOS
(END OF PERIOD):
Tier 1 capital . . . . . . . 11.26% 8.82% 8.88% 8.51% 10.64% 10.16% 10.97%
Total capital . . . . . . . 15.34% 11.19% 11.10% 11.18% 13.46% 13.44% 12.47%
Leverage ratio . . . . . . . 8.89% 6.53% 6.62% 6.10% 7.12% 6.12% 6.40%
NET INCOME AND RATIOS EXCLUDING
GOODWILL AND OTHER INTANGIBLE
ASSETS AMORTIZATION AND
BALANCES:
Net income applicable to common
equity . . . . . . . . . . $23,336 $18,365 $33,714 $30,522 $23,194 $19,948 $15,896
Fully diluted earnings per
share . . . . . . . . . . $1.24 $1.07 $1.95 $1.86 $1.50 $1.39 $1.13
Return on average assets (3) 1.53% 1.41% 1.25% 1.34% 1.22% 1.18% 1.10%
Return on average common
stockholders' equity (3) . 19.62% 19.67% 17.12% 19.58% 17.98% 17.83% 15.89%
____________
</TABLE>
(1) Represents the loss from early extinguishment of debt, less
applicable income taxes of $159,000.
(2) The Company called its 7% Cumulative Convertible Preferred
Stock for redemption in March 1997.
(3) Annualized based on results for the six months ended June 30,
1997 and 1996.
(4) 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.
(5) Includes available-for-sale securities and held-to-maturity securities.
11
<PAGE>
(6) Consists of company-obligated mandatorily redeemable preferred
securities of CFB Capital I, a wholly-owned business trust, which
holds solely junior subordinated debentures of the Company.
12
<PAGE>
SUMMARY PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following unaudited pro forma condensed combined financial data is
presented to show the impact on the Company's historical financial position
and results of operations of the acquisition of KeyBank Wyoming in July 1997,
which was accounted for as a business combination using the purchase method of
accounting. See "Recent Developments -- Significant Acquisitions." The
unaudited pro forma condensed combined financial condition data assumes that
the acquisition was consummated on the last day of each period presented, and
the unaudited pro forma condensed combined operating data assumes that the
acquisition was consummated at the beginning of each period presented. The
unaudited pro forma condensed combined operating data also assumes that the
following events occurred at the beginning of each period presented: (i) the
$60 million offering of 8 7/8% Cumulative Capital Securities completed in
February 1997, (ii) the redemption on March 31, 1997 of the Company's 7.75%
Subordinated Notes due 2000 in the principal amount of $23 million, and (iii)
the conversion during March 1997 of substantially all of the Company's 7%
Cumulative Convertible Preferred Stock. The pro forma information should be
read in conjunction with the pro forma condensed combined financial
statements and the historical consolidated financial statements (including
the related notes thereto) of the Company incorporated herein by reference.
The pro forma information is not necessarily indicative of the financial
condition of the Company that would have resulted had the acquisition been
consummated on the last day of each period presented, or of the results of
operations that would have resulted had the acquisition and other assumed
events been consummated at the beginning of the periods for which data is
presented, nor is it necessarily indicative of the results of operations of
future periods or future combined financial position.
<TABLE>
<CAPTION>
Six Months Year Ended
Ended June 30, 1997 December 31, 1996
------------------- -----------------
(Dollars in thousands, except per share data)
<S> <C> <C>
PRO FORMA OPERATING DATA:
Interest income........................................... $161,598 $306,507
Interest expense.......................................... 68,114 137,760
-------- --------
Net interest income....................................... 93,484 168,747
Provision for loan losses................................. 5,008 9,015
-------- --------
Net interest income after provision for
loan losses............................................. 88,476 159,732
Noninterest income........................................ 25,261 38,188
Noninterest expense....................................... 77,873 147,354
-------- --------
Income before income taxes, extraordinary
item and cumulative effect of accounting
change.................................................. 35,864 50,566
Provision for income taxes................................ 11,417 16,780
-------- --------
Income before extraordinary item and
cumulative effect of accounting change.................. 24,447 33,786
Extraordinary item, net of tax (1)........................ (265) --
Cumulative effect of accounting change.................... -- --
-------- --------
Net income................................................ 24,182 33,786
Earnings per common and common equivalent share:
Primary earnings per share before extraordinary
item and cumulative effect of accounting
change................................................ $ 1.30 $ 1.86
Extraordinary item, net of tax (1)...................... (0.01) --
Cumulative effect of accounting change.................. -- --
Primary earnings per share.............................. $ 1.29 $ 1.86
Fully diluted earnings per share before extraordinary
item and cumulative effect of accounting change....... $ 1.30 $ 1.86
Extraordinary item, net of tax (1)...................... (0.01) --
Cumulative effect of accounting change.................. -- --
Fully diluted earnings per share........................ $ 1.29 $ 1.86
Average common shares outstanding:
Primary................................................. 18,701,137 8,141,716
Fully diluted........................................... 18,773,723 18,154,966
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Six Months Year Ended
Ended June 30, 1997 December 31, 1996
------------------- -----------------
(Dollars in thousands, except per share data)
<S> <C> <C>
PRO FORMA OPERATING RATIOS AND OTHER DATA:
Return on average assets (2).............................. 1.16% 0.85%
Return on average common stockholders' equity (2)......... 19.50% 15.29%
Net interest margin (2)................................... 5.13% 5.04%
Net charge-offs to average loans (2)...................... 0.18% 0.17%
Ratio of earnings to fixed charges (3):
Excluding interest on deposits.......................... 4.91x 3.47x
Including interest on deposits.......................... 1.53x 1.37x
PRO FORMA FINANCIAL CONDITION DATA (END OF PERIOD):
Assets.................................................... $4,149,465 $4,182,295
Loans..................................................... 2,613,973 2,561,930
Investment securities (4)................................. 1,000,186 993,741
Deposits.................................................. 3,402,566 3,532,928
Preferred securities of subsidiary (5).................... 60,000 60,000
Long-term debt............................................ 109,171 123,750
Common stockholders' equity............................... 261,385 245,636
Book value per common share............................... 14.00 13.21
Tangible book value per common share...................... 8.57 7.76
PRO FORMA FINANCIAL CONDITION RATIOS (END OF PERIOD):
Nonperforming assets to total loans and OREO (6).......... 1.05% 0.84%
Allowance for loan losses to total loans.................. 1.44% 1.33%
Allowance for loan losses to nonperforming loans (6)...... 157% 187%
REGULATORY CAPITAL RATIOS (END OF PERIOD):
Tier 1 capital............................................ 7.19% 6.71%
Total capital............................................. 10.52% 10.21%
Leverage ratio............................................ 5.25% 4.97%
NET INCOME AND RATIOS EXCLUDING GOODWILL AND OTHER
INTANGIBLE ASSETS AMORTIZATION AND BALANCES:
Net income applicable to common equity.................... $ 27,517 $ 39,703
Fully diluted earnings per share.......................... $ 1.47 $ 2.19
Return on average assets (2).............................. 1.35% 1.03%
Return on average common stockholders' equity (2)......... 22.19% 17.97%
</TABLE>
____________________________________
(1) Represents loss from early extinguishment of debt, less applicable income
taxes of $159,000.
(2) Annualized based on results for the six months ended June 30, 1997.
(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.
(5) Consists of company-obligated mandatorily redeemable preferred securities
of CFB Capital I, a wholly-owned business trust, which holds solely
junior subordinated debentures of the Company.
(6) Adjusted to reflect nonperforming assets (consisting entirely of
nonperforming loans) of KeyBank Wyoming retained by KeyCorp at closing.
14
<PAGE>
[COMMUNITY FIRST LOGO AND MAP]
Community Banking Locations
Map of the United States indicating the Company's banking locations, the
locations of offices proposed to be acquired and the locations of the Company's
key acquisition states and acquisition prospect states.
15
<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 II 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, and will rank PARI PASSU with all current and
future Trust Related Securities. On a pro forma basis, reflecting the
subsequent issuance of additional long-term debt incurred in connection with
the acquisition of KeyBank Wyoming, at June 30, 1997 Senior and Subordinated
Debt would have been approximately $109 million. At June 30, 1997, $60
million in Trust Related Securities were outstanding. 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 Trust Related
Securities. 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 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.
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 II
(and consequently CFB Capital II'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 subsidiary banks'
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
II 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
16
<PAGE>
Extension Period, the Company will be prohibited from making certain
payments or distributions with respect to the Company's capital stock
(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, INVESTMENT COMPANY ACT REDEMPTION OR CAPITAL TREATMENT
EVENT REDEMPTION
Upon the occurrence and during the continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event (whether occurring before
or after December 15, 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, Investment
Company Event or Capital Treatment 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 II 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 II 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
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II is, or will be within 90 days of the date of the opinion, subject to more
than a DE MINIMIS amount of other taxes, duties or other governmental charges.
An "Investment Company Event" means the receipt by the Company and CFB
Capital II 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 II 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.
A "Capital Treatment Event" means the reasonable determination by the
Company that, as a result of any amendment to, or change (including any proposed
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such proposed change, pronouncement or decision is announced on or after the
date of issuance of the Capital Securities under the Trust Agreement, there is
more than an insubstantial risk of impairment of the Company's ability to treat
the Capital Securities (or any substantial portion thereof) as "Tier I Capital"
(or the then equivalent thereof) for purposes of the capital adequacy guidelines
of the Federal Reserve, as then in effect and applicable to the Company.
POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES
Congress and the Clinton Administration have recently considered proposals
that would deny corporate issuers a deduction for United States income tax
purposes for the payment of interest on instruments with characteristics similar
to the Junior Subordinated Debentures. While no such proposals are currently
pending in Congress, there can be no assurance that similar legislation will not
be enacted in the future or that other legislation enacted after the date hereof
will not adversely affect the ability of the Company to deduct the interest
payable on the Junior Subordinated Debentures. Such a change would give rise to
a Tax Event which may permit the Company to cause a redemption of the Capital
Securities by electing to redeem the Junior Subordinated Debentures. See
"Description of the Capital Securities--Redemption"; "Description of the Junior
Subordinated Debentures -- Redemption"; and "Certain Federal Income Tax
Consequences."
POSSIBLE DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL
SECURITIES
The Company will have the right at any time to terminate CFB Capital II and
cause the Junior Subordinated Debentures to be distributed to the holders of the
Capital Securities in liquidation of CFB Capital II, 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 II 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 II 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 II. If CFB Capital II
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 Action").
Except as described herein, holders of the Capital Securities
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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 II, 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 Company
intends to include the Capital Securities for quotation 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 II 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 II. Accordingly, the
Capital Securities that an investor may purchase, or the Junior Subordinated
Debentures that a holder
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of the Capital Securities may receive in liquidation of CFB Capital
II, 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's acquisitions will continue to present material risks. 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 acquisition of
financial institutions, the Company may from time to time acquire new
businesses that are different from its core business of commercial banking
and which present operating and strategic risks different from those
confronted in its core business. These various acquisition risks can be
heightened by larger transactions. To date, KeyBank Wyoming and Mountain
Parks are the largest institutions acquired by the Company. The proposed
acquisition of the Bank One Branches also represents a large acquisition for
the Company, and is expected to be consummated at about the same time as the
proposed Summit and Republic acquisitions. These proposed acquisitions are
subject to various conditions, and there can be no assurance that they will
be consummated. See "Recent Developments -- Pending Acquisitions."
Managing growth through acquisitions, including absorption and training of
personnel, combination of office and operations procedures and related matters,
is a difficult process. In connection with its recent significant
acquisitions, the Company has experienced challenges with data and item
processing conversion, management training, staffing and other operational
integration areas. These issues have resulted in the need for management and
support personnel to allocate increased time to the integration process, in some
cases slowing the acquired institutions' marketing and business development
efforts. Although the Company has taken steps to address the issues resulting
from recent acquisitions, the Company may experience such issues in connection
with future acquisitions, and there can be no assurance that these problems will
not result in disruption or expense.
Management believes future growth in the assets and earnings of the
Company will depend in significant part on consummation of further
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 in some cases 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.
NEED FOR ADDITIONAL FINANCING
The Company's ability to execute its business strategy depends to a
significant degree on its ability to obtain additional indebtedness and equity
capital. Other than as described herein, the Company has no commitments for
additional borrowings or sales of equity capital and there can be no assurance
that the Company will be successful in consummating any such future financing
transactions on terms satisfactory to the Company, if at all. Factors which
could affect the Company's access to the capital markets, or the costs of such
capital, include changes in interest rates, general economic conditions and the
perception in the capital markets of the Company's business, results of
operations, leverage, financial condition and business prospects. Each of these
factors is to a large extent subject to economic, financial, competitive and
other factors beyond the Company's control. In addition, covenants under the
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Company's current and future debt securities and credit facilities may
significantly restrict the Company's ability to incur additional indebtedness.
The Company intends to complete an offering of common stock (the "Common
Stock Offering"), with estimated proceeds of $50 million, at approximately the
same time as this offering. The Company intends to use the net proceeds of
these two offerings to capitalize the Company's subsidiary banks that will
acquire the Bank One Branches. If the acquisition of the Bank One Branches does
not occur when it is anticipated, or at all, the Company will retain the net
proceeds of this offering and the Common Stock Offering for general corporate
purposes, which may include, without limitation, other possible future
acquisitions, funding investments in, or extension of credit to, the Company's
subsidiaries, repayment of maturing obligations and redemption of securities.
If the Company does not complete the Common Stock Offering, the Company may be
unable to consummate the acquisition of the Bank One Branches or to include all
of the Capital Securities as Tier 1 capital, although the Company believes it
would be able to include a substantial majority of the Capital Securities as
Tier 1 capital.
COMPETITION
Banking is a highly competitive industry. The Banks compete directly with
other banks and lending and financial institutions in their local communities.
The 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.
REGULATION
As a bank holding company, the Company is subject to extensive regulation
by the Federal Reserve Board. This regulation limits the manner in which the
Company and the Banks conduct their businesses and obtain financing and is
designed primarily to protect depositors and not to benefit holders of
securities of financial institutions. In addition, the Banks are subject to
extensive regulation by various federal and state regulatory authorities.
The banking industry is subject to changing laws and regulations. Recent
trends have steadily expanded the geographic scope of services that may be
offered by the banking industry and have allowed additional competition in
many geographic regions. In September 1994, the Interstate Banking and
Branching Efficiency Act of 1994 ("IBBEA") was enacted. The IBBEA largely
eliminated restrictions on interstate banking and since June 1, 1997 has
permitted interstate branching, subject to certain options which states may
enact by law. Certain aspects of the IBBEA were clarified and amended in
1997, with the passage of the Riegle-Neal Clarification Act. The Economics
Growth and Regulatory Paperwork Reduction Act of 1996 ("EGRPRA") streamlined
application processes and eased regulations in several areas, facilitating
acquisitions and expansion of non-banking activities. The IBBEA and EGRPRA
may increase competition by both out-of-state and in-state banking
organizations or by other financial institutions. There can be no assurance
that implementation of and changes in laws and regulations affecting banking
will not adversely affect the Company.
KEY PERSONNEL
Continued profitability of the 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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RECENT DEVELOPMENTS
PENDING ACQUISITIONS
The acquisitions described below are in process.
BANK ONE BRANCHES. On September 10, 1997, the Company entered into an
Office Purchase and Assumption Agreement (the "Branch Purchase Agreement")
with three subsidiary banks of Banc One Corporation (the "Bank One Banks").
The Branch Purchase Agreement generally provides for the conveyance of
deposits and certain assets associated with 37 branch banks (individually, a
"Bank One Branch" or, collectively, the "Bank One Branches") located in
Arizona (25 locations), Colorado (8 locations in 7 markets) and Utah (4
locations). At June 30, 1997, the Bank One Branches had total deposits of
$639 million and loans of $70 million. Under the terms of the Branch
Purchase Agreement, the Company will pay a purchase price premium equal to 6%
of the deposits of the Bank One Branches at closing. This premium is
estimated to be $38.3 million, based upon deposit levels at June 30, 1997.
Consummation of the Branch Purchase Agreement is contingent upon regulatory
approval, among other things, and is anticipated to occur during the fourth
quarter of 1997. The acquisition will be accounted for as an acquisition of
assets and assumption of liabilities and will result in the recognition by
the Company of approximately $38.3 million in deposit based intangibles.
In the Branch Purchase Agreement, the Bank One Banks made certain
representations and warranties to the Company as to matters including the
businesses, operations and financial condition of the Bank One Branches. These
representations and warranties generally terminate as of the date of closing,
except such as are contained in bills of sale or related documents. The Company
made representations and warranties to the Bank One Banks as to certain matters,
including lack of any conflicts of the Branch Purchase Agreement with certain
agreements, documents or laws relating to the Company. The Bank One Banks have
agreed (i) with specific exceptions, not to acquire or operate any building,
office or other facility or premises within a three mile radius of any Bank One
Branch office for a period of at least two years after the closing date; (ii)
with specific exceptions, not to solicit deposits or refinancing of certain
loans from customers of the Bank One Branches for a period of at least one year
after the closing date; and (iii) to indemnify the Company from losses arising
out of operations at the Bank One Branches, except that such indemnification
does not apply to any loans or assets of the Bank One Branches acquired by the
Company and is subject to certain other exceptions.
The Branch Purchase Agreement is subject to termination by each party upon
a material breach of the agreement by the other party, among other events. In
addition, the agreement may be terminated by the Bank One Banks if the closing
has not occurred on or before December 15, 1997, unless the failure to
consummate the transaction by such time is due to a breach of the agreement by
the Bank One Banks. The Company has deposited $1.5 million with the Bank One
Banks, which they may retain if the Company fails to consummate the acquisition
on or before December 15, 1997. Consummation of the Branch Purchase Agreement
is contingent upon regulatory approval and other customary conditions to
closing. Because the Company does not currently have an Arizona chartered bank,
the regulatory approval of the purchase of the Arizona branches will depend on
either completing the Republic acquisition, described below, on or before
December 15, 1997 or obtaining a new banking charter in Arizona on or before
that date. Also, in order to meet the regulatory capital requirements for
completion of the Bank One Branches acquisition, the Company intends to increase
its level of Tier 1 capital by at least $75 million through the completion of
this offering and an anticipated public offering of common stock for
approximately $50 million in proceeds on or before December 15, 1997. See "Use
of Proceeds; Purpose of Offering." The Company believes that it will be able to
consummate the acquisition of the Bank One Branches on or before December 15,
1997; however, no assurance can be given that the Company will be able to meet
this timetable. If the acquisition is not completed by that date, the Company
may be required to forfeit the deposit paid to the Bank One Banks.
REPUBLIC NATIONAL BANCORP, INC. On August 28, 1997, the Company executed
an Agreement and Plan of Merger (the "Republic Merger Agreement") with Republic
National Bancorp, Inc., Phoenix, Arizona ("Republic") and Republic Acquisition
Corporation. At June 30, 1997, Republic had a single bank office located in
Phoenix,
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Arizona and had total assets of approximately $53 million, total deposits of
approximately $48 million and total stockholders' equity of approximately $5
million. On completion of the merger, and subject to adjustments set forth
in the Republic Merger Agreement, the Company expects to issue approximately
368,500 shares of common stock to the former holders of Republic common
stock. The Company expects to complete the acquisition of Republic, subject
to regulatory approval, during the fourth quarter of 1997. The acquisition
is expected to be accounted for as a pooling of interests.
FIRST NATIONAL SUMMIT BANKSHARES, INC. On August 22, 1997, the Company
executed an Agreement and Plan of Merger, including a First Amendment to the
Agreement and Plan of Merger (the "Summit Merger Agreement"), with First
National Summit Bankshares, Inc., Gunnison, Colorado ("Summit") and Summit
Acquisition Corporation. At June 30, 1997, Summit had offices in five locations
in Colorado and had total assets of approximately $86 million, total deposits of
approximately $77 million and total stockholders' equity of approximately $7
million. Pursuant to the Summit Merger Agreement, holders of Summit common
stock will receive shares of common stock of the Company in exchange for their
shares and holders of Summit preferred stock will receive $100 per share
surrendered plus accrued but unpaid dividends to the effective time of the
merger. On completion of the merger, and subject to adjustments as set forth in
the Summit Merger Agreement, the Company expects to issue approximately 400,000
shares of common stock to the former holders of Summit common stock. The
Company expects to complete the acquisition of Summit, subject to regulatory
approval, during the fourth quarter of 1997. The acquisition is expected to be
accounted for as a pooling of interests.
SIGNIFICANT ACQUISITIONS
In 1997 and 1996, the Company completed the significant acquisitions
described below.
KEYBANK WYOMING. On July 14, 1997, the Company purchased KeyBank National
Association, Cheyenne, Wyoming ("KeyBank Wyoming"), from KeyCorp, its parent
corporation, ("KeyCorp"), for a purchase price of $135 million. KeyBank Wyoming
has been renamed "Community First National Bank." As of June 30, 1997, KeyBank
Wyoming had total assets of approximately $1.1 billion and 28 banking offices
located in 24 communities in Wyoming, including Cheyenne, Laramie, Casper,
Sheridan and Jackson. The Company believes its Wyoming banking network is the
largest in Wyoming, providing a full range of commercial and consumer banking
services throughout the state. The transaction was accounted for as a business
combination using the purchase method of accounting and resulted in the
recognition of goodwill by the Company of approximately $60 million.
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 the Company's common stock on the Nasdaq National Market on December
18, 1996. The Mountain Parks banking offices are located in winter ski and
summer recreational areas in the Colorado mountains and in the greater
Denver/Boulder metropolitan area. Pursuant to commitments made with the Federal
Reserve to address resulting concentrations in certain Colorado banking markets,
the Company sold Mountain Parks banking offices in two Colorado communities.
The Mountain Parks banking offices' primary lending focus is on commercial
loans, real estate mortgage loans, residential real estate construction loans
and, to a lesser extent, consumer loans.
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USE OF PROCEEDS; PURPOSE OF OFFERING
All of the proceeds from the sale of Capital Securities will be invested by
CFB Capital II 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 also intends to complete the Common
Stock Offering, with estimated proceeds of $50 million, at approximately the
same time as this offering. The Company intends to use the net proceeds of these
two offerings to capitalize the Company's subsidiary banks that will acquire the
Bank One Branches. See "Recent Developments -- Pending Acquisitions."
The primary purpose of this offering of Capital Securities and the Common
Stock Offering is to provide additional Tier 1 capital to satisfy regulatory
capital requirements in connection with the proposed acquisition of the Bank One
Branches. See "Recent Developments -- Pending Acquisitions." 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, subject to certain limitations. 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.
If the acquisition of the Bank One Branches does not occur when it is
anticipated, or at all, the Company will retain the net proceeds of this
offering and the Common Stock Offering for general corporate purposes, which may
include, without limitation, other acquisitions, funding investments in, or
extension of credit to, the Company's subsidiaries, repayment of maturing
obligations and redemption of securities. If the Company does not complete
the Common Stock Offering, the Company may be unable to consummate the Bank One
Branches acquisition or to include all of the Capital Securities as Tier 1
capital, although the Company believes it would be able to include a substantial
majority of the Capital Securities in Tier 1 capital.
Pending their ultimate application, the net proceeds may be invested in
short term investment grade financial instruments.
ACCOUNTING TREATMENT
For financial reporting purposes, CFB Capital II will be treated as a
subsidiary of the Company and, accordingly, the accounts of CFB Capital II
will be included in the consolidated statement of financial condition 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 CFB Capital I and
CFB Capital II," 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 present
information regarding CFB Capital II and CFB Capital I and will include a
footnote to the financial statements stating that (i) each trust is
wholly-owned, (ii) the sole assets of each trust 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 each trust with respect to the preferred securities issued by
such trust. Neither CFB Capital I nor CFB Capital II will provide separate
reports under the Exchange Act.
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CAPITALIZATION
The following table sets forth the capitalization of the Company at June
30, 1997 and as adjusted to give effect to the acquisition of KeyBank Wyoming
in July 1997, the proposed issuance of the Capital Securities, the proposed
Common Stock Offering and the pending acquisitions of Summit and Republic.
There can be no assurance that such offering or acquisitions will be
consummated. See "Recent Developments - Pending Acquisitions" and "Use of
Proceeds; Purpose of Offering." The pending acquisition of the Bank One
Branches will be accounted for as an acquisition of assets and assumption of
liabilities, and therefore no adjustments are necessary to reflect this
acquisition.
June 30, 1997
-----------------------
Actual As Adjusted
-------- -----------
(Dollars in thousands)
Long-term debt:
Capital leases........................................ $ 3,052 $ 3,052
Long-term bank debt................................... 7,066(1) 37,066
7.30% Subordinated Notes due 2004..................... 60,000 60,000
9.00% Exchangeable Subordinated Notes due 2005........ 11,500 11,500
-------- ----------
Total long-term debt ......................... 81,618 111,618
Company-obligated mandatorily redeemable
preferred securities of CFB Capital I and CFB
Capital II (2)(3) .................................... 60,000 100,000
Stockholders' equity:
Preferred stock, $.01 par value, 2,000,000 shares
authorized; no shares issued....................... -- --
Common stock, $.01 par value,
30,000,000 shares authorized;
18,676,448 shares issued and outstanding;
_________shares issued and outstanding as
adjusted (4)(5).................................... 187 --
Capital surplus.................................. 101,017 ----------
Retained earnings.................................... 160,304 160,304
Treasury stock, 3,534 shares......................... (123) (123)
-------- ----------
Total stockholders' equity....................... 261,385 ----------
-------- ----------
Total capitalization......................... $ 403,003 $
-------- ----------
-------- ----------
________________________
(1) Long term bank debt at June 30, 1997 was $37,066,000 on a pro forma basis
as adjusted for $30,000,000 in bank debt incurred in July 1997 in
connection with the acquisition of KeyBank Wyoming.
(2) The Company formed CFB Capital I, a wholly-owned business trust subsidiary
of the Company, to issue $60 million in stated value of 8 7/8%
Cumulative Capital Securities in February 1997. The sole assets of
CFB Capital I consist of approximately $61.8 million principal amount
of 8 7/8% Junior Subordinated Debentures due 2027 issued by the Company
to CFB Capital I. Such debentures will mature on February 1, 2027,
which date may be shortened to a date not earlier than February 1,
2002 if certain conditions are met. CFB Capital II, a separate
wholly-owned business subsidiary of the Company, will issue the
Capital Securities hereunder and will hold the Junior Subordinated
Debentures described herein as its sole asset. The sole assets of CFB
Capital II will consist of approximately $41.2 million principal
amount of ___% Junior Subordinated Debentures due 2027 to be issued by
the Company to CFB Capital II. Such Junior Subordinated Debentures
will mature on
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<PAGE>
December 15, 2027, which date may be shortened to a date not earlier
than December 15, 2002 if certain conditions are met. The Company owns
all of the Common Securities of CFB Capital I and CFB Capital II.
(3) The junior subordinated debentures issued or to be issued by the Company to
CFB Capital I and CFB Capital II 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 1, 2002 or December 15,
2002, respectively, 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, Capital Treatment Event or an
Investment Company Event (each as defined in the relevant indenture).
(4) Reflects the adjustment in the number of shares of Common issued and
outstanding assuming the issuance of (i) approximately ---------
shares in the proposed Common Stock Offering (assuming an offering at
the closing price of $------------- per share on -------------,
1997), (ii) 400,000 shares in the proposed acquisition of Summit, and
(iii) 368,500 shares in the proposed acquisition of Republic. See
"Recent Developments - Pending Acquisitions" and "Use of Proceeds;
Purpose of Offering."
(5) Excludes (i) 690,257 shares of common stock issuable pursuant to
outstanding stock options and (ii) 1,793,305 shares of
common stock issuable pursuant to options which may be
granted under the Company's stock option plans.(1)
<PAGE>
MANAGEMENT
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Donald R. Mengedoth 53 President, Chief Executive Officer and Chairman of the Board
Mark A. Anderson, CFA 40 Executive Vice President, Chief Financial Officer, Secretary and Treasurer
Ronald K. Strand 51 Executive Vice President - Banking Group
David E. Groshong 49 Executive Vice President - Financial Services
Thomas E. Hansen 45 Senior Vice President and Central Region Manager
Bruce A. Heysse 46 Senior Vice President - Acquisitions
Thomas A. Hilt 55 Senior Vice President - Operations and Administration
Gary A. Knutson 50 Senior Vice President and Integration Manager
David A. Lee 53 Senior Vice President and Eastern Region Manager
Patricia J. Staples 41 Senior Vice President - Marketing
Harriette S. McCaul 46 Senior Vice President - Human Resources
James R. Krumm 49 Senior Vice President and Colorado Region Manager
Randall L. Dancliff 50 Senior Vice President and Wyoming Region Manager
Patricia A. Adam 61 Director
James T. Anderson 58 Director
Patrick E. Benedict 63 Director
Patrick Delaney 55 Director
John H. Flittie 61 Director
Dennis M. Mathisen 58 Director
Dean E. Smith 65 Director
Thomas C. Wold 60 Director
Harvey L. Wollman 62 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 and has been
designated as Certified in Financial Management.
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<PAGE>
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 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, National Association,
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 Company's affiliate bank in
Fargo, North Dakota since 1985. He was employed by Norwest Bank of
Minnesota, National Association 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 July
1996. He was Senior Vice President and Integration Manager of the Company
from November 1995 to June 1996. 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 Integration Manager of
the Company since July 1996 and previously was Senior Vice President and
Western Region Manager since 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.
Harriette S. McCaul, Ph.D., has been Senior Vice President - Human
Resources since February 1997. Previously, she was the Dean of the College
of Business Administration at North Dakota State University ("NDSU") in
Fargo, North Dakota. She joined NDSU in 1983 and held various teaching and
administrative positions in the Business Department and human resources area.
Prior to that time, she was an instructor at Moorhead State University,
Moorhead, Minnesota, and the director of faculty and staff benefits at the
University of Kansas.
28
<PAGE>
James R. Krumm has been Senior Vice President since December 1996 and
Colorado Region Manager since May 1997. He was Executive Vice President,
Director and Chief Operating Officer of Mountain Parks Financial Corp. from
January 1995 until the acquisition of Mountain Parks by the Company in
December of 1996. He had also served as Vice President and Chief Credit
Officer since 1991. Mr. Krumm has worked in the banking business since 1970,
holding various senior management positions with banks in Iowa and Colorado.
Randall L. Dancliff has been Senior Vice President and Wyoming Region
Manager since July 1997. He was President and Chief Executive Officer of
KeyBank Wyoming from April 1995 until the acquisition of KeyBank Wyoming by
the company in July 1997. Prior to that, he served as President, Chief
Operating Officer and Chief Financial Officer of KeyBank Wyoming from 1992 to
April 1995, and as Regional Vice President of KeyBank Cheyenne from 1985 to
1991. From 1973 through 1985, he served in a variety of capacities with
First Wyoming Bank, the predecessor to KeyBank Wyoming.
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.
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 the 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.
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
29
<PAGE>
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 was a managing partner of R. & D. Investors Co. from 1968 to 1983 and
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.
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 II 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 II 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 II (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 II except as
described under "Subordination of Common Securities of CFB Capital II 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
30
<PAGE>
Distributions or amounts payable on redemption of the Capital Securities or
on liquidation of the Capital Securities if CFB Capital II 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 March, June, September, and
December in each year, commencing March 15, 1998 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 II 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 March 15, 1998.
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 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 II 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 II 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 II
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 II 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
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<PAGE>
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 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 December 15, 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, an Investment Company Event or a Capital Treatment 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, CAPITAL
TREATMENT EVENT REDEMPTION OR DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES.
If a Tax Event, an Investment Company Event or a Capital Treatment 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, Investment Company Event or Capital Treatment
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, an Investment Company Event or
Capital Treatment 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 II
and cause the Junior Subordinated Debentures to be distributed to holders of
the Trust Securities in liquidation of CFB Capital II 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 II
on the outstanding Trust Securities of CFB Capital II shall not be reduced as
a result of any additional taxes, duties and other governmental charges to
which CFB Capital II 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
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<PAGE>
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 II, 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 II and, after satisfaction of the liabilities of creditors of CFB
Capital II as provided by applicable law, cause the Junior Subordinated
Debentures to be distributed to the holders of Trust Securities in
liquidation of CFB Capital II. 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 II 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 II, 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 II has funds on hand
available for the payment of such Redemption Price. See "- Subordination of
Common Securities of CFB Capital II Held by the Company" and "- Guarantee."
If CFB Capital II 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
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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 II 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 II 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.
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 II 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 II 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 II 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
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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.
LIQUIDATION DISTRIBUTION UPON TERMINATION
The Company will have the right at any time to terminate CFB Capital II
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 II 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 II (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 II by a court of
competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, CFB Capital II 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 II 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 II available for distribution to holders,
after satisfaction of liabilities to creditors of CFB Capital II 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 II has insufficient
assets available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by CFB Capital II 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 II 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 II 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 II and thereby causes the
Junior Subordinated Debentures to be distributed to holders of the Capital
Securities in liquidation of CFB Capital II, 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 II 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,
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the Property Trustee and the Delaware Trustee may be removed at such time by
the holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees,
which voting rights are vested exclusively in the 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 II
CFB Capital II 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 II 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 II 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 II, (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 II
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 II 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
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obligations of such successor entity under the Successor Securities at least
to the extent provided by the Guarantee. Notwithstanding the foregoing, CFB
Capital II 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 II 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 II 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 II
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 II's status as a grantor
trust for United States federal income tax purposes or CFB Capital II'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 foregoing actions, the
Trustees shall obtain an opinion of counsel experienced in such matters to
the effect that CFB Capital II will not be classified as an association
taxable as a corporation for United States federal income tax purposes on
account of such action.
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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 II 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 payment of Distributions will be the 1st 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
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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 II will issue
individual Capital Securities in exchange for the Global Capital Security. In
addition, CFB Capital II 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 II 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 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 II, 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
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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 II, but upon payment of
any tax or other governmental charges that may be imposed in connection with any
transfer or exchange. CFB Capital II 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 Property 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 II in such a way that CFB Capital II 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 II 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 II may not borrow money or issue debt or mortgage or pledge any
of its assets.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures will be issued under the Subordinated
Indenture, dated as of December __, 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
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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 II
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 March, June, September and December of each year (each, an "Interest
Payment Date"), commencing March 15, 1998, 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 II, 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 December 15, 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 December 15, 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 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.
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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.
ADDITIONAL SUMS
If CFB Capital II 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 II 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 December 15, 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, an Investment Company Event or a Capital Treatment 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.
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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 II, the Junior Subordinated Debentures may be
distributed to the holders of the Capital Securities in liquidation of CFB
Capital II after satisfaction of liabilities to creditors of CFB Capital II 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 II, 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 II, 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, 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. The Junior Subordinated Debentures will rank PARI PASSU with
Trust Related Securities, if any, of the Company. 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.
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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 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 or Trust Related Securities that may be issued by the Company.
The Company expects from time to time to incur additional indebtedness
constituting Senior and Subordinated Debt and may issue additional Trust Related
Securities.
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."
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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
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
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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 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.
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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 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
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(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 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 II 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
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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.
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 II is the holder of all such
Junior Subordinated Debentures, (ii) a Tax Event in respect of CFB Capital II
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 II 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 II 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 II, 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 II 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 II to remain classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes.
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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 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
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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 II
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
II and the Company believe to be accurate, but CFB Capital II and the Company
assume no responsibility for the accuracy thereof. Neither CFB Capital II 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.
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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 II's obligations under the Capital Securities, but will apply only
to the extent that CFB Capital II 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 II 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 II (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 II 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 II has funds on hand available
therefor at such time, and (iii) upon a voluntary or involuntary dissolution,
winding up or liquidation of CFB Capital II (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 II
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 II to pay such amounts to such holders.
If the Company does not make interest payments on the Junior Subordinated
Debentures held by CFB Capital II, CFB Capital II 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 and PARI PASSU
with all current and future Trust Related Securities. 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.
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
II'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 II's obligations under the Capital Securities. See "Relationship
Among the Capital Securities, the Junior Subordinated Debentures and the
Guarantee."
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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 and
PARI PASSU with all Trust Related Securities.
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 II 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 or Trust Related
Securities that may be incurred by the Company. The Company expects from time to
time to incur additional indebtedness constituting Senior and Subordinated Debt
and may issue additional Trust Related Securities.
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 II, 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, 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.
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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 II 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 II becomes indebted or liable, the full payment of any costs,
expenses or liabilities of CFB Capital II, other than obligations of CFB Capital
II to pay to the holders of the Capital Securities or other similar interests in
CFB Capital II 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 II 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 II'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 II will not pay Distributions or other amounts due on
the Capital Securities. The Guarantee does not cover payment of Distributions
when CFB Capital II 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 and PARI PASSU with all current and future Trust Related Securities.
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 shall pay for all and any costs, expenses and
liabilities of CFB Capital II except CFB Capital II's obligations to holders of
Capital Securities; and (iv) the Trust Agreement further provides that CFB
Capital II will not engage in any activity that is not consistent with the
limited purposes of CFB Capital II.
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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
II 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 II
The Capital Securities evidence a beneficial interest in CFB Capital II,
and CFB Capital II 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 II (or
from the Company under the Guarantee) if and to the extent CFB Capital II 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 II 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 II, 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 II (other than CFB Capital II'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 "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
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<PAGE>
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 II
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 II 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.
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
57
<PAGE>
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 II 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 II, 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 II were to
occur because CFB Capital II 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 II could be a taxable event to CFB
Capital II 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
II. A Securityholder would recognize interest income in respect of Junior
Subordinated Debentures received from CFB Capital II in the manner described
above under "-- Interest Income and Original Issue Discount."
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
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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
Congress and the Clinton Administration have recently considered proposals
that would deny corporate issuers a deduction for United States income tax
purposes for the payment of interest on instruments with characteristics similar
to the Junior Subordinated Debentures. While no such proposals are currently
pending in Congress, there can be no assurance that similar legislation will not
be enacted in the future or that other legislation enacted after the date hereof
will not adversely affect the ability of the Company to deduct the interest
payable on the Junior Subordinated Debentures. Such a change would give rise to
a Tax Event which may permit the Company to cause a redemption of the Capital
Securities by electing to redeem the Junior Subordinated Debentures. See
"Description of the Capital Securities--Redemption" and "Description of the
Junior Subordinated Debentures -- Redemption."
UNDERWRITING
The Underwriters named below have agreed, subject to the terms and
conditions of a Purchase Agreement to purchase from CFB Capital II the
respective number of Capital Securities set forth opposite their names in the
table below.
NUMBER OF
---------
CAPITAL
-------
UNDERWRITER SECURITIES
----------- ----------
Piper Jaffray Inc......................
Dain Bosworth Incorporated............. ----------
1,600,000
----------
----------
The Underwriters have advised the Company and CFB Capital II 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.
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Each of the Company and CFB Capital II 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 they do not intend to confirm sales
to any account over which either Underwriter exercises discretionary authority
in excess of 5% of the number of Capital Securities offered hereby. In
connection with the Offer and Sale of the Capital Securities, the Underwriters
will comply with Rule 2810 under the NASD Conduct Rules.
Piper Jaffray Inc. and Dain Bosworth Incorporated have periodically
provided investment banking services to the Company.
In connection with this offering and in compliance with applicable law and
industry practice, the Underwriters may over allot or effect transactions which
stabilize, maintain or otherwise affect the market price of the Capital
Securities at levels above those which might otherwise prevail in the open
market, including by entering stabilizing bids. A stabilizing bid means the
placing of any bid, or the effecting of any purchase, for the purpose of
pegging, fixing or maintaining the price of a security.
In general, purchases of a security for the purpose of stabilization could
cause the price of the security to be higher than it might be in the absence of
such purchases.
Neither the Company, the Trust nor any of the Underwriters makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Capital
Securities. In addition, neither the Company, the Trust nor any of the
Underwriters makes any representation that the Underwriters will engage in such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
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 II will be passed upon by Richards, Layton & Finger, P.A., Wilmington,
Delaware, special Delaware counsel to the Company and CFB Capital II. 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 consolidated financial statements of the Company incorporated by
reference herein have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference, which (i) as to the years 1995 and 1994, are based in part on the
reports of Arthur Andersen LLP, formerly independent auditors for Mountain
Parks, and (ii) as to the year 1994, are 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
60
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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
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.
The financial statements of KeyBank Wyoming as of and for the year ended
December 31, 1996 appearing in Community First Bankshares, Inc.'s Current Report
on Form 8-K/A filed on September 22, 1997 with the Securities and Exchange
Commission have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance on such report given upon the authority of such firm as experts in
accounting and auditing.
61
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No dealer, salesperson or other
person has been authorized to give any 1,600,000 CAPITAL SECURITIES
information or to make representations
other than those contained in this CFB CAPITAL II
Prospectus in connection with the offer
made by this Prospectus, and, if given ____% CUMULATIVE CAPITAL SECURITIES
or made, such information or (LIQUIDATION AMOUNT $25 PER
representations must not be relied upon CAPITAL SECURITY)
as having been authorized by the Company, FULLY AND UNCONDITIONALLY GUARANTEED,
CFB Capital II or either Underwriter. AS DESCRIBED HEREIN, BY
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
anytime subsequent to its date. This [CFB LOGO]
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
_______________
PAGE PROSPECTUS
Available Information . . . . . . . . . . . . _______________
Incorporation of Certain Documents
by Reference. . . . . . . . . . . . . . . .
Prospectus Summary. . . . . . . . . . . . . .
Summary Historical Consolidated PIPER JAFFRAY INC.
Financial Data. . . . . . . . . . . . . . .
Summary Pro Forma Condensed
Combined Financial Data. . . . . . . . . . .
Risk Factors. . . . . . . . . . . . . . . . .
Recent Developments . . . . . . . . . . . . . DAIN BOSWORTH
Use of Proceeds; Purpose of Offering. . . . . INCORPORATED
Accounting Treatment. . . . . . . . . . . . .
Capitalization. . . . . . . . . . . . . . . .
Management. . . . . . . . . . . . . . . . . .
Description of the Capital Securities . . . .
Description of the Junior Subordinated , 1997
Debentures. . . . . . . . . . . . . . . . .
Book-Entry Issuance . . . . . . . . . . . . .
Description of Guarantee. . . . . . . . . . .
Relationship among the Capital. . . . . . . .
Securities, the Junior Subordinated
Debentures and the Guarantee. . . . . . . .
Certain Federal Income Tax
Consequences. . . . . . . . . . . . . . . .
Underwriting. . . . . . . . . . . . . . . . .
Legal Matters . . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . . .
<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. . . . $ 12,121
NASD fee . . . . . . . . . . . . . . . . . . . . . . . . . 17,500
Nasdaq fees. . . . . . . . . . . . . . . . . . . . . . . . 8,000
Trustees' fees and expenses. . . . . . . . . . . . . . . . 12,000
Legal fees and expenses. . . . . . . . . . . . . . . . . . 100,000
Blue Sky fees and expenses . . . . . . . . . . . . . . . . 5,000
Accounting fees and expenses . . . . . . . . . . . . . . . 35,000
Printing expenses. . . . . . . . . . . . . . . . . . . . . 50,000
Miscellaneous expenses . . . . . . . . . . . . . . . . . . 15,379
--------
Total . . . . . . . . . . . . . . . . . . . . . . $255,000
--------
--------
</TABLE>
All of the above items except the registration and NASD fees 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
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ITEM 16. EXHIBITS
(a) Exhibits
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 (the
"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 Commission on August 9, 1996).
2.3 Stock Purchase Agreement dated as of February 18, 1997, among the
Registrant, KeyCorp and Key Bank of the Rocky Mountains, Inc.
(incorporated by reference to Exhibit 2.8 to the Registrant's
Amendment No. 1 to its Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, filed with the Commission as of
May 8, 1997 the "1996 10-K").
2.4 Agreement and Plan of Merger dated as of August 22, 1997, including
First Amendment to Agreement and Plan of Merger dated as of the same
date, among the Registrant, Summit Acquisition Corporation and First
National Summit Bankshares, Inc. (incorporated by reference to
Exhibit 2.4 to Registrant's Registration Statement on Form S-4 (File
No. 333-36091), as filed with the Commission on September 22, 1997
(the "1997 S-4")).
2.5 Agreement and Plan of Merger dated as of August 28, 1997 among the
Registrant, Republic Acquisition Corporation and Republic National
Bancorp, Inc. (incorporated by reference to Exhibit 2.5 to the 1997
S-4).
2.6 Office Purchase and Assumption Agreement by and between Bank One,
Arizona, National Association, Bank One, Colorado, National
Association, Bank One, Utah, National Association and the Registrant
dated as of the 10th day of September, 1997 (incorporated by
reference to Exhibit 2.6 to the 1997 S-4).
4.1 Form of Subordinated Indenture dated December __, 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 II.
4.4 Trust Agreement of CFB Capital II dated as of October 6, 1997.
4.5 Form of Amended and Restated Trust Agreement of CFB Capital II, to be
dated December __, 1997.
4.6 Form of Capital Security Certificate of CFB Capital II (included as
an exhibit to Exhibit 4.5).
II-2
<PAGE>
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 and Consent 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 Amended and Restated Trust Agreement.
25.2 Form T-1 Statement of Eligibility of Wilmington Trust Company to act
as trustee under the Subordinated Indenture.
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. (incorporated by reference to the
1997 S-4).
- --------------
* To be filed by amendment.
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)
II-3
<PAGE>
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-4
<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 9th day of October, 1997.
COMMUNITY FIRST BANKSHARES, INC.
By /s/ Donald R. Mengedoth
--------------------------------------------
Donald R. Mengedoth
President, Chief Executive Officer
and Chairman of the Board of Directors
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 9th day of October, 1997.
CFB CAPITAL II
By /s/ DONALD R. MENGEDOTH
--------------------------------------------
Donald R. Mengedoth,
TRUSTEE
By /s/ MARK A. ANDERSON
--------------------------------------------
Mark A. Anderson,
TRUSTEE
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 9th day of October, 1997,
by the following persons in the capacities indicated.
Signature Title
--------- -----
/s/ Donald R. Mengedoth President, Chief Executive Officer,
- ----------------------------- Chairman of the Board of Directors and Director
Donald R. Mengedoth (principal executive officer)
/s/ Mark A. Anderson Executive Vice President, Chief
- ----------------------------- Financial Officer, Secretary and Treasurer
Mark A. Anderson (principal financial and 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
II-5
<PAGE>
/s/ Patrick Delaney Director
- -----------------------------
Patrick Delaney
/s/ John H. Flittie Director
- -----------------------------
John H. Flittie
/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
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
1.1 Purchase Agreement
4.1 Form of Subordinated Indenture
4.3 Certificate of Trust of CFB Capital II
4.4 Trust Agreement of CFB Capital II
4.5 Amended and Restated Trust Agreement
4.7 Form of Capital Securities Guarantee Agreement
5.1 Opinion and Consent of Lindquist & Vennum P.L.L.P.
12.1 Statement of 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
25.1 Form T-1 - Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Amended and Restated
Trust Agreement.
25.2 Form T-1 - Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Subordinated Indenture.
25.3 Form T-1 - Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Capital Securities
Guarantee Agreement.
</TABLE>
II-7
<PAGE>
CAPITAL SECURITIES
CFB CAPITAL II
_______ % CUMULATIVE CAPITAL SECURITIES
(LIQUIDATION PREFERENCE OF $25 PER CAPITAL SECURITY)
PURCHASE AGREEMENT
, 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 II, 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 1,600,000 of the Trust's % Cumulative
Capital Securities, with a liquidation preference of $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"), to be dated , 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, to be dated
, 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 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
<PAGE>
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.
In connection with the offer and sale of the Capital Securities, the
Underwriters will comply with Rule 2810 under the NASD Conduct Rules.
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
material 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 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
-3-
<PAGE>
"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 other than the Trust, (each a "Subsidiary" and collectively
the "Subsidiaries") 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 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 dividends or made any distribution of any kind with
respect to its capital stock (other than dividends paid in the ordinary
course with respect to shares of the Company's Common Stock or any of its
subsidiaries' common stock); and there has not been any change in the
capital stock (other than a
-4-
<PAGE>
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/or the Trust, as the case may be, and constitutes a valid, legal and
binding obligation of the Company and/or the Trust, as the case may be,
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 15,
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 Indenture Act and will
conform in all material respects to the statements relating thereto in the
Registration Statement and the Prospectus.
-5-
<PAGE>
(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 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
-6-
<PAGE>
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 and Subordinated
Debt" (as defined in the Indenture) of the Company.
(xvii) The Junior Subordinated Debentures are subordinate and
junior in right of payment to all "Senior and Subordinated Debt" 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.
(xix) 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, 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 title to all
property (and good and marketable title to all real 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 or which do not interfere in any material respect with the
use of the property on the conduct of the business of the Company and its
Subsidiaries; 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,
to the best of the Company's knowledge, no name which the Company or any of
its 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.
-7-
<PAGE>
(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 or 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 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).
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(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 1,600,000 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 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 same 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.
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
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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.
(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
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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 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
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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 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),
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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 Delaware 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, 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 its ownership or lease of real property or
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 statements in the Prospectus under the caption
"Description of the Capital Securities", "Description of Junior
Subordinated Debentures", "Description of Guarantee", and "Relationship
among the Capital Securities, the Junior Subordinated Debentures and the
Guarantee" insofar as such statements constitute matters of law
applicable to the Offerors or summaries of documents, fairly present the
information required to be included therein in all material respects.
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 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,
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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, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity.
(vii) The Junior Subordinated Debentures are subordinate and
junior in right of payment to all "Senior and Subordinated Debt" (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 beneficial owner of Capital Securities
will be treated as owning an undivided beneficial interest in the Junior
Subordinated Debentures, and stated interest on the Junior Subordinated
Debentures generally will be included in income by a holder of Capital
Securities at the time such interest income is paid or accrued in
accordance with such holder's regular method of tax accounting.
(xi) For federal income tax purposes, (a) the Junior Subordinated
Debentures 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 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.
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(xiii) The Trust Agreement has been duly authorized, executed and
delivered by the Company and the Administrative Trustees.
(xiv) To the best of such counsel's knowledge and information after
due inquiry, the Trust is not 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, and to the best of counsel's knowledge, 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 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
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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, which has been obtained, or under state securities or blue sky
laws, 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 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.
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(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.
(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
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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 LLP, 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
principles, 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 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
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<PAGE>
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 (other than dividends paid in the ordinary
course with respect to shares of the Company's Common Stock or any of its
Subsidiaries' common 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.
(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
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<PAGE>
(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.
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
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Prospectus, the Prospectus, or any such aemndment 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 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).
(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
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<PAGE>
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 Underwriters 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 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) 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
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<PAGE>
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 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 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
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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 UNDERWRITERS. 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 520 Main
Avenue, Fargo, North Dakota 58124-0001, Attention: Donald R. Mengedoth if to
the Trust, shall be mailed, telegraphed 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.
[Signature Page Follows]
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<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 II
By______________________________
Its___________________________
Confirmed as of the date first
above mentioned.
PIPER JAFFRAY INC.
By____________________________
Managing Director
DAIN BOSWORTH INCORPORATED
By____________________________
Managing Director
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SCHEDULE I
Number of
Underwriter Capital Securities
- ----------- ------------------
Piper Jaffray Inc.
Dain Bosworth Incorporated
Total............................................ 1,600,000
---------
---------
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EXHIBIT A
COMMUNITY FIRST BANKSHARES, INC.
SUBSIDIARIES
OWNERSHIP
SUBSIDIARY BANK: LOCATION: PERCENTAGE
Community First National Bank Fergus Falls, MN 100.000%
Community First National Bank Fargo, ND 100.000%
Community First State Bank Vermillion, ND 100.000%
Community First State Bank Redfield, SD 100.000%
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 Springs, CO 100.000%
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%
Mountain Parks Data Corporation 100.000%
OTHER AFFILIATES:
Vail Banks Inc. Vail, CO 24.690%
SUBSIDIARIES OF SUBSIDIARIES (100% OWNED):
Community First Insurance Agencies, Inc. Fargo, ND (Subsidiary of
Community First State
Bank [Vermillion,
SD])
CFIN, Inc. Las Vegas, NV (Subsidiary of
Community First State
Bank [Spooner])
Equity Lending, Inc. Edina, MN (Subsidiary of
Colorado Community
First State Bank - CO
[Denver, CO])
Mountain Parks Financial Services, Inc. Denver, CO (Subsidiary of
Colorado Community
First State Bank - CO
[Denver, CO])
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<PAGE>
OWNERSHIP
SUBSIDIARIES OF SUBSIDIARIES: LOCATION: PERCENTAGE
(CONTINUED)
Community First Minnesota Georgetown, British (Subsidiary of
Holdings, Inc. Cayman Islands Community First
National Bank [Fergus
Falls])
CFIRE, Inc. Fargo, ND (Subsidiary of
Community First
Minnesota Holdings,
Inc.)
Community First Colorado Georgetown, British (Subsidiary of
Holdings, Inc. Cayman Islands Community Colorado
Community First
National Bank [Ft.
Morgan])
Colorado CFIRE, Inc. Fargo, ND (Subsidiary of
Community First
Colorado Holdings,
Inc.)
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<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXHIBIT 4.1
COMMUNITY FIRST BANKSHARES, INC.,
AS ISSUER
TO
WILMINGTON TRUST COMPANY,
AS TRUSTEE
---------------------------------------------------
SUBORDINATED INDENTURE
---------------------------------------------------
Dated as of December __, 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Form and Payment . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 Global Subordinated Debenture . . . . . . . . . . . . . . . . 8
2.5 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 Execution, Authentication, Delivery and Dating . . . . . . . . 10
2.7 Registration and Transfer . . . . . . . . . . . . . . . . . . 11
2.8 Mutilated, Destroyed, Lost and Stolen Junior Subordinated
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III
REDEMPTION OF JUNIOR SUBORDINATED DEBENTURES . . . . . . . . . . . . . 12
3.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.2 Special Event Redemption . . . . . . . . . . . . . . . . . . . 12
3.3 Optional Redemption by Company . . . . . . . . . . . . . . . . 12
3.4 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . 13
3.5 Payment upon Redemption . . . . . . . . . . . . . . . . . . . 14
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 . . . . . . . . . . . . . . . . . . . . . 15
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 . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Appointment to Fill Vacancy in Office of Trustee . . . . . . . 17
5.5 Compliance with Consolidation Provisions . . . . . . . . . . . 17
5.6 Restrictions on Certain Payments . . . . . . . . . . . . . . . 17
5.7 Covenants as to the Trust . . . . . . . . . . . . . . . . . . 17
ARTICLE VI
SECURITYHOLDERS' LISTS AND REPORTS . . . . . . . . . . . . . . . . . . 18
6.1 Company to Furnish Trustee Names and Addresses of
Securityholders . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Preservation of Information; Communications with
Securityholders . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Reports by the Company . . . . . . . . . . . . . . . . . . . . 18
6.4 Reports by the Trustee . . . . . . . . . . . . . . . . . . . . 19
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ARTICLE VII
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT . . . . 19
7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . 19
7.2 Collection of Indebtedness and Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.3 Application of Moneys Collected . . . . . . . . . . . . . . . 22
7.4 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . 22
7.5 Rights and Remedies Cumulative; Delay or Omission Not
Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.6 Control by Securityholders . . . . . . . . . . . . . . . . . . 23
7.7 Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . 23
ARTICLE VIII
FORM OF JUNIOR SUBORDINATED DEBENTURE AND ORIGINAL ISSUE . . . . . . . 24
8.1 Form of Junior Subordinated Debenture . . . . . . . . . . . . 24
8.2 Original Issue of Junior Subordinated Debentures . . . . . . . 24
ARTICLE IX
CONCERNING THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 24
9.1 Certain Duties and Responsibilities of the Trustee . . . . . . 24
9.2 Certain Rights of Trustee . . . . . . . . . . . . . . . . . . 25
9.3 Trustee Not Responsible for Recitals or Issuance of the
Junior Subordinated Debentures . . . . . . . . . . . . . . . 26
9.4 May Hold Junior Subordinated Debentures . . . . . . . . . . . 26
9.5 Moneys Held in Trust . . . . . . . . . . . . . . . . . . . . . 26
9.6 Compensation and Reimbursement . . . . . . . . . . . . . . . . 26
9.7 Reliance on Officers' Certificate . . . . . . . . . . . . . . 27
9.8 Disqualification; Conflicting Interests . . . . . . . . . . . 27
9.9 Corporate Trustee Required; Eligibility . . . . . . . . . . . 27
9.10 Resignation and Removal; Appointment of Successor . . . . . . 27
9.11 Acceptance of Appointment by Successor . . . . . . . . . . . . 28
9.12 Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.13 Preferential Collection of Claims Against the Company . . . . 29
9.14 Appointment of Authenticating Agent . . . . . . . . . . . . . 29
ARTICLE X
CONCERNING THE SECURITYHOLDERS . . . . . . . . . . . . . . . . . . . . 30
10.1 Evidence of Action by Securityholders . . . . . . . . . . . . 30
10.2 Proof of Execution by Securityholders . . . . . . . . . . . . 31
10.3 Who May Be Deemed Owners . . . . . . . . . . . . . . . . . . . 31
10.4 Certain Junior Subordinated Debentures Owned by Company
Disregarded . . . . . . . . . . . . . . . . . . . . . . . . 31
10.5 Actions Binding on Future Securityholders . . . . . . . . . . 32
ARTICLE XI
SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . 32
11.1 Supplemental Indentures Without the Consent of
Securityholders . . . . . . . . . . . . . . . . . . . . . . 32
11.2 Supplemental Indentures with Consent of Securityholders . . . 33
11.3 Effect of Supplemental Indentures . . . . . . . . . . . . . . 33
11.4 Junior Subordinated Debentures Affected by Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.5 Execution of Supplemental Indentures . . . . . . . . . . . . . 33
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ARTICLE XII
SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . 34
12.1 Company May Consolidate, Etc. . . . . . . . . . . . . . . . . 34
12.2 Successor Substituted . . . . . . . . . . . . . . . . . . . . 34
12.3 Evidence of Consolidation, Etc., to Trustee . . . . . . . . . 34
ARTICLE XIII
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . 35
13.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . 35
13.2 Discharge of Obligations . . . . . . . . . . . . . . . . . . 35
13.3 Deposited Moneys to Be Held in Trust . . . . . . . . . . . . 35
13.4 Payment of Monies Held by Paying Agents . . . . . . . . . . . 35
13.5 Repayment to Company . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . 36
14.1 No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XV
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 36
15.1 Effect on Successors and Assigns . . . . . . . . . . . . . . 36
15.2 Actions by Successor . . . . . . . . . . . . . . . . . . . . 36
15.3 Surrender of Company Powers . . . . . . . . . . . . . . . . . 36
15.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
15.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 37
15.6 Treatment of Junior Subordinated Debentures as Debt . . . . . 37
15.7 Compliance Certificates and Opinions . . . . . . . . . . . . 37
15.8 Payments on Business Days . . . . . . . . . . . . . . . . . . 37
15.9 Conflict with Trust Indenture Act . . . . . . . . . . . . . . 38
15.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 38
15.11 Separability . . . . . . . . . . . . . . . . . . . . . . . . 38
15.12 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 38
15.13 Acknowledgment of Rights . . . . . . . . . . . . . . . . . . 38
ARTICLE XVI
SUBORDINATION OF JUNIOR SUBORDINATED DEBENTURES . . . . . . . . . . . . 38
16.1 Agreement to Subordinate . . . . . . . . . . . . . . . . . . 38
16.2 Default on Senior and Subordinated Debt . . . . . . . . . . . 39
16.3 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . 39
16.4 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . 40
16.5 Trustee to Effectuate Subordination . . . . . . . . . . . . . 41
16.6 Notice by the Company . . . . . . . . . . . . . . . . . . . . 41
16.7 Rights of the Trustee; Holders of Senior and Subordinated
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
16.8 Subordination May Not Be Impaired . . . . . . . . . . . . . . 42
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<PAGE>
COMMUNITY FIRST BANKSHARES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, AS AMENDED
AND SUBORDINATED INDENTURE, DATED AS OF DECEMBER ___, 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.
<PAGE>
SUBORDINATED INDENTURE (the "Indenture"), dated as of December ___,
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 II, a Delaware statutory business trust (the
"Trust"), has offered to the public $40,000,000 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 $___________
aggregate liquidation amount of its ___% Trust Common Securities, in
$_____________ 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 December
15, 2002.
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<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.
"Capital Treatment Event" means the reasonable determination by the
Company that, as a result of any amendment to, or change (including any
proposed change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change
is effective or such proposed change, pronouncement or decision is announced
on or after the date of issuance of the Capital Securities under the Trust
Agreement, there is more than an insubstantial risk of impairment of the
Company's ability to treat the Capital Securities (or any substantial portion
thereof) as "Tier I Capital" (or the then equivalent thereof) for purposes of
the capital adequacy guidelines of the Federal Reserve, as then in effect and
applicable to the Company.
2
<PAGE>
"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.
"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.
3
<PAGE>
"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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"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
4
<PAGE>
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.
"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.
5
<PAGE>
"Responsible Officer" when used with respect to the Trustee means the
Chairman of the Board of Directors, the President, any Vice President, the
Secretary, the Treasurer, any trust officer, any corporate trust officer or
any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the
particular subject.
"Scheduled Maturity Date" means December 15, 2027.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 2.7.
"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, an Investment Company Event or a
Capital Treatment 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
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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 II, 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 December ___, 1997, of the Trust.
"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
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.
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(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, 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.
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(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 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
8 7/8% 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 March, June, September, and December
in each year (each, an "Interest Payment Date"), commencing on March 15,
1998, 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
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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 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 December , 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
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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.
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.
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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 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 December 15, 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
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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.
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
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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 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.
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(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.
(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;
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(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.
(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
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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; 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.
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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 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 January 31 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 December 31, 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
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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 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
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(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.
(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
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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 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
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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 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
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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.
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.
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(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
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;
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(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 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.
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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 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.
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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 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
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effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor trustee all
the rights, powers, and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor trustee all property and money held by
such retiring Trustee hereunder.
(b) Upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all 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
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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.
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
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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.
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
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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 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;
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(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.
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
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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 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.
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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
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
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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 February 1 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the paying agent and the Trustee
shall be released from all further liability with respect to such moneys or
Governmental Obligations, and the Holder of any of the 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.
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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, 58124-0001, 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.
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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.
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.
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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 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.
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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, 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,
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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 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
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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 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.
41
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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 NORTH DAKOTA )
) ss:
COUNTY OF___________ )
On the _______ day of December, 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 December, 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
42
<PAGE>
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. _______________________ $________________________
CUSIP No.______________________________
1
<PAGE>
COMMUNITY FIRST BANKSHARES, INC.
___% JUNIOR SUBORDINATED DEBENTURE
DUE DECEMBER____, 2027
Community First Bankshares, Inc., a Delaware corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ______________ or
registered assigns, the principal sum of _____________ Dollars ($___________)
on December 15, 2027, which date may be shortened as provided in the
Indenture (such date, as it may be shortened, the "Stated Maturity"), and to
pay interest on said principal sum from March 15, 1998, 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 March, June,
September, and December in each year commencing March 15, 1998, 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 December 15, 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.
2
<PAGE>
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 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: Mark A. Anderson
Title: Secretary
3
<PAGE>
[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
1
<PAGE>
[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 December _______, 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 December 15, 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
2
<PAGE>
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 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
3
<PAGE>
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 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.
4
<PAGE>
EXHIBIT 4.3
CERTIFICATE OF TRUST
OF
CFB CAPITAL II
This Certificate of Trust of CFB CAPITAL II (the "Trust"), dated October 6,
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 II.
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: /s/ W. Chris Sponenberg
-------------------------------
Name: W. Chris Sponenberg
Title: Senior Financial Services
Officer
/s/ Donald R. Mengedoth
----------------------------------
Donald R. Mengedoth, as Trustee
/s/ Mark A. Anderson
----------------------------------
Mark A. Anderson, as Trustee
/s/ Ronald K. Strand
----------------------------------
Ronald K. Strand, as Trustee
<PAGE>
EXHIBIT 4.4
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of October 6, 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 II" 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
<PAGE>
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 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: /s/ Donald R. Mengedoth
---------------------------------------
Name: Donald R. Mengedoth
Title: President
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ W. Chris Sponenberg
---------------------------------------
Name: W. Chris Sponenberg
Title: Senior Financial Services Officer
By: /s/ Donald R. Mengedoth
---------------------------------------
Donald R. Mengedoth, as Trustee
By: /s/ Mark A. Anderson
---------------------------------------
Mark A. Anderson, as Trustee
By: /s/ Ronald K. Strand
---------------------------------------
Ronald K. Strand, as Trustee
3
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXHIBIT 4.5
CFB CAPITAL II
--------------------------------------
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 DECEMBER __, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
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.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
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.. . . . . . . . . . . . . . . . . . . .12
SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN
TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 208. ASSETS OF TRUST. . . . . . . . . . . . . . . . . . . . . . .15
SECTION 209. TITLE TO TRUST PROPERTY. . . . . . . . . . . . . . . . . . .16
ARTICLE III. - PAYMENT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 301. PAYMENT ACCOUNT. . . . . . . . . . . . . . . . . . . . . . .16
ARTICLE IV. - DISTRIBUTIONS; REDEMPTION. . . . . . . . . . . . . . . . . . . .16
SECTION 401. DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 402. REDEMPTION.. . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 403. SUBORDINATION OF COMMON SECURITIES.. . . . . . . . . . . . .19
SECTION 404. PAYMENT PROCEDURES.. . . . . . . . . . . . . . . . . . . . .20
SECTION 405. TAX RETURNS AND REPORTS. . . . . . . . . . . . . . . . . . .20
SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST. . . . . . . . .20
SECTION 407. PAYMENTS UNDER INDENTURE.. . . . . . . . . . . . . . . . . .20
ARTICLE V. - TRUST SECURITIES CERTIFICATES . . . . . . . . . . . . . . . . . .21
SECTION 501. INITIAL OWNERSHIP. . . . . . . . . . . . . . . . . . . . . .21
SECTION 502. THE TRUST SECURITIES CERTIFICATES. . . . . . . . . . . . . .21
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.. . . . . . . . . . . . . . .23
i
<PAGE>
SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.. . .23
SECTION 508. MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . . .23
SECTION 509. APPOINTMENT OF PAYING AGENT. . . . . . . . . . . . . . . . .24
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. . . . . . . . . . . . . . . . . .26
ARTICLE VI. - ACTS OF SECURITYHOLDERS; MEETINGS; VOTING. . . . . . . . . . . .27
SECTION 601. LIMITATIONS ON VOTING RIGHTS.. . . . . . . . . . . . . . . .27
SECTION 602. NOTICE OF MEETINGS.. . . . . . . . . . . . . . . . . . . . .28
SECTION 603. MEETINGS OF HOLDERS OF CAPITAL SECURITIES. . . . . . . . . .28
SECTION 604. VOTING RIGHTS. . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 605. PROXIES, ETC.. . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT.. . . . . . . . . .29
SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES. . . . . . . . . .29
SECTION 608. ACTS OF SECURITYHOLDERS. . . . . . . . . . . . . . . . . . .30
SECTION 609. INSPECTION OF RECORDS. . . . . . . . . . . . . . . . . . . .31
ARTICLE VII. - REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . .31
SECTION 701. REPRESENTATIONS AND WARRANTIES OF THE BANK
AND THE PROPERTY TRUSTEE. . . . . . . . . . . . . . . . . . . . . . .31
SECTION 702. REPRESENTATIONS AND WARRANTIES OF THE
DELAWARE BANK AND THE DELAWARE TRUSTEE. . . . . . . . . . . . . . . .32
SECTION 703. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR. . . . . . . . .33
ARTICLE VIII. - THE TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES. . . . . . . . . . . . .34
SECTION 802. CERTAIN NOTICES. . . . . . . . . . . . . . . . . . . . . . .35
SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.. . . . . . . . . . . . .36
SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.. . .38
SECTION 805. MAY HOLD SECURITIES. . . . . . . . . . . . . . . . . . . . .38
SECTION 806. COMPENSATION; INDEMNITY; FEES. . . . . . . . . . . . . . . .38
SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED;
ELIGIBILITY OF TRUSTEES.. . . . . . . . . . . . . . . . . . . . . . .39
SECTION 808. CONFLICTING INTERESTS. . . . . . . . . . . . . . . . . . . .39
SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE.. . . . . . . . . . . . . .39
SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. . . . . .41
SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.. . . . . . . . . . .42
ii
<PAGE>
SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS. . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR
TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 814. REPORTS BY PROPERTY TRUSTEE. . . . . . . . . . . . . . . . .43
SECTION 815. REPORTS TO THE PROPERTY TRUSTEE. . . . . . . . . . . . . . .44
SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 817. NUMBER OF TRUSTEES.. . . . . . . . . . . . . . . . . . . . .44
SECTION 818. DELEGATION OF POWER. . . . . . . . . . . . . . . . . . . . .44
SECTION 819. VOTING.. . . . . . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE IX. - TERMINATION, LIQUIDATION AND MERGER. . . . . . . . . . . . . . .45
SECTION 901. TERMINATION UPON EXPIRATION DATE.. . . . . . . . . . . . . .45
SECTION 902. EARLY TERMINATION. . . . . . . . . . . . . . . . . . . . . .45
SECTION 903. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 904. LIQUIDATION. . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF
THE TRUST.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
ARTICLE X. - MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . .48
SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.. . . . . . . . . .48
SECTION 1002. AMENDMENT.. . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 1003. SEPARABILITY. . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 1004. GOVERNING LAW.. . . . . . . . . . . . . . . . . . . . . . .50
SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY. . . . . . . . . . . . . .50
SECTION 1006. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 1007. HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 1008. REPORTS, NOTICES AND DEMANDS. . . . . . . . . . . . . . . .51
SECTION 1009. AGREEMENT NOT TO PETITION.. . . . . . . . . . . . . . . . .51
SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT. . .52
SECTION 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
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
iii
<PAGE>
CROSS-REFERENCE TABLE
SECTION OF SECTION OF AMENDED
TRUST INDENTURE ACT AND RESTATED TRUST
OF 1939, AS AMENDED AGREEMENT
- --------------------------------------------------------------------------------
310(a)(1) 807
310(a)(2) 807
310(a)(3) 807
310(a)(4) 207(a)(ii)
310(b) 808
311(a) 813
311(b) 813
312(a) 507
312(b) 507
312(c) 507
313(a) 814(a)
313(a)(4) 814(b)
313(b) 814(b)
313(c) 108
313(d) 814(c)
314(a) 815
314(b) Not Applicable
314(c)(1) 816
314(c)(2) 816
314(c)(3) Not Applicable
314(d) Not Applicable
314(e) 101, 816
315(a) 801(a), 803(a)
315(b) 802, 108
315(c) 801(a)
315(d) 801, 803
315(e) Not Applicable
316(a) Not Applicable
316(a)(1)(A) Not Applicable
316(a)(1)(B) Not Applicable
316(a)(2) Not Applicable
316(b) Not Applicable
316(c) 607
317(a)(1) Not Applicable
317(a)(2) Not Applicable
317(b) 509
318(a) 1010
iv
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of December __, 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 October 6, 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 October __, 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 Purchase 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,
3
<PAGE>
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.
"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.
4
<PAGE>
"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.
"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
5
<PAGE>
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property
Trustee within 60 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
EXHIBIT D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 901.
"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 December __,
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.
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"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
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 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.
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"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;
(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.
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"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 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.
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"Trust" means the Delaware business trust created and continued hereby
and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for
all purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment
or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as 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.
"Purchase Agreement" means the Purchase Agreement, dated as of
____________, 1997, among the Trust, the Depositor and Piper Jaffray and Dain
Bosworth Incorporated.
ARTICLE II.
ESTABLISHMENT OF THE TRUST
SECTION 201. NAME.
The Trust created and continued hereby shall be known as "CFB Capital
II," 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.
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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
19890-0001, 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.
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 Purchase 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 Purchase 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 $40,000,000 against receipt of the aggregate purchase price of such
Capital Securities of $40,000,000, 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 delivery by the Depositor of $ in principal amount of
Junior Subordinated Debentures. 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 $40,000,000, 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 $40,000,000.
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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 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
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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;
(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;
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(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 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
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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 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 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 Purchase 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.
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Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered
by the Property Trustee for the benefit of the Securityholders in accordance
with this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT
SECTION 301. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal
with respect to the Payment Account for the purpose of making deposits and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the
Payment Account shall be held by the Property Trustee in the Payment Account
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 December , 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 March,
June, September, December, 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
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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 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;
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(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 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.
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(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,
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
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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 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.
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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 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
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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 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
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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 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.
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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 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
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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 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
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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 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
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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.
(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
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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.
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
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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).
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.
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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 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.
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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 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
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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;
(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
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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:
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(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;
(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.
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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 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,
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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 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.
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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 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.
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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.
(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
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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.
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.
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(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 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
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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, 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.
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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.
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 January 31 of each year commencing with January 31,
1998, 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 December 31 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.
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(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.
SECTION 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be five, provided that the Holder of all
of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee 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
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(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
SECTION 819. VOTING.
Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by not
less than a majority of the Administrative Trustees, unless there are only two,
in which case both must consent.
ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 901. TERMINATION UPON EXPIRATION DATE.
Unless earlier dissolved, the Trust shall automatically dissolve on October
6, 2028 (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.
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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 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.
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(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
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,
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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 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.
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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.
(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.
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(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 1003. SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 1004. GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day which is a Business Day (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.
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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) 235-6019. 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 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.
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SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
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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
53
<PAGE>
Exhibit A
CERTIFICATE OF TRUST
OF
CFB CAPITAL I
This Certificate of Trust of CFB CAPITAL II (the "Trust"), dated October 6,
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 II.
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
A-1
<PAGE>
Exhibit C
[FORM OF COMMON SECURITIES CERTIFICATE]
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE
DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE
WITH APPLICABLE LAW AND SECTION 510 OF THE TRUST
AGREEMENT AND ONLY IN CONNECTION WITH A
SIMULTANEOUS DELEGATION AND ASSIGNMENT OF
THE EXPENSE AGREEMENT REFERRED TO THEREIN
Certificate Number Number of Common Securities
C-
Certificate Evidencing Common Securities
of
CFB Capital II
_______ Common Securities
(liquidation amount $25 per Common Security)
CFB Capital II, a statutory business trust formed under the laws of the State
of Delaware (the "Issuer Trust"), hereby certifies that [NAME OF HOLDER] (the
"Holder") is the registered owner of ____________ common securities of the
Issuer Trust representing common undivided beneficial interests in the assets
of the __________ Trust and designated the CFB Capital % Common
Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). Except in accordance with Section 510 of the Trust Agreement
(as defined below) the Common Securities are not transferable and any
attempted transfer hereof other than in accordance therewith shall be void.
The designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Issuer Trust, dated as of December
, 1997 as the same may be amended from time to time (the "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 therein, including the designation of
the terms of the Common Securities as set forth therein. The Issuer Trust
will furnish a copy of the Trust Agreement to the holder without charge upon
written request to the Issuer Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement and
is entitled to the benefits thereunder.
Terms used but not defined herein have the meanings set forth in the Trust
Agreement.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer Trust has
executed this certificate this th day of December, 1997.
CFB CAPITAL II
By:
------------------------
Mark A. Anderson
ADMINISTRATIVE TRUSTEE
C-2
<PAGE>
Exhibit D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of December , 1997, between Community First
Bankshares, Inc., a Delaware corporation ("CFB"), and CFB Capital II, 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 October 6, 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
D-1
<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.
D-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 II
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).
D-3
<PAGE>
THIS AGREEMENT is executed as of the day and year first above written.
COMMUNITY FIRST BANKSHARES, INC.
By:
-----------------------------------
Name: Mark A. Anderson
Title: Chief Financial Officer
CFB CAPITAL II
By:
-----------------------------------
Name: Mark A. Anderson
Title: Administrative Trustee
D-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 II 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-001 1,600,000
CUSIP NO.
Certificate Evidencing Capital Securities
of
CFB Capital II
% Cumulative Capital Securities
(liquidation amount $25 per Capital Security)
CFB CAPITAL II, a statutory business trust created under the laws of the State
of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder") is
the registered owner of One Million Six Hundred Thousand (1,600,000) 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,
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
E-1
<PAGE>
to the terms and provisions of, the Amended and Restated Trust Agreement of
the Trust dated as of December , 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 December , 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 th day of December, 1997.
CFB CAPITAL II
By
-----------------------------
Name: Mark A. Anderson
Title: Administrative Trustee
E-2
<PAGE>
EXHIBIT 4.7
CAPITAL SECURITIES GUARANTEE AGREEMENT
COMMUNITY FIRST BANKSHARES, INC.
AND
WILMINGTON TRUST COMPANY
DATED: December , 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
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
</TABLE>
ii
<PAGE>
CROSS REFERENCE TABLE
<TABLE>
Section of Trust Section of
Indenture Act of Guarantee
1939, as Amended Agreement
---------------- ----------
<S> <C>
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)
</TABLE>
iii
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Capital Securities Guarantee"), dated as of
December , 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 II, a Delaware statutory business trust ("CFB Capital").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement") dated as of December , 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 1,600,000 preferred securities, having an aggregate
liquidation amount of $40,000,000, 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 December ,
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.
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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 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
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Trustee, the Capital Guarantee 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
October 9, 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 II ("CFB
Capital II") with the Securities and Exchange Commission relating to a public
offering by CFB Capital II of up to 1,600,000 __% 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 12.1
COMMUNITY FIRST BANKSHARES, INC.
STATEMENT REGARDING COMPUTATION OF RATIOS
<TABLE>
<CAPTION>
Six Months Ended June 30, Year ended December 31,
------------------------- --------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Income before taxes & extraordinary
item and cumulative effect of
accounting change......................... $ 33,034 $ 27,308 $ 50,517 $ 47,161 $ 36,681 $ 29,030 $ 23,654
Add: fixed charges.......................... 51,089 46,752 97,736 85,426 55,229 47,271 50,870
-------- -------- -------- -------- -------- -------- --------
Earnings including interest
expense - deposits.......................(a) 84,123 74,060 148,253 132,587 91,910 76,301 74,524
Less: interest expense - deposits........... (42,535) (39,860) (81,655) (71,780) (46,560) (42,873) (47,727)
-------- -------- -------- -------- -------- -------- --------
Earnings excluding interest
expense - deposits.......................(b) $ 41,588 $ 34,200 $ 66,598 $ 60,807 $ 45,350 $ 33,428 $ 26,797
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Fixed charges:
Interest expense - deposits............... $ 42,535 $ 39,860 $ 81,655 $ 71,780 $ 46,560 $ 42,873 $ 47,727
Interest expense - borrowings............. 8,554 5,662 13,579 11,111 6,908 4,398 3,143
Interest expense on capital leases........ 0 0 0 0 0 0 0
Dividends on preferred stock (gross)...... 0 1,230 2,502 2,535 1,761 0 0
-------- -------- -------- -------- -------- -------- --------
Fixed charges including interest
expense - deposits.......................(c) 51,089 46,752 97,736 85,426 55,229 47,271 50,870
Less: interest expense - deposits........... (42,535) (39,860) (81,655) (71,780) (46,560) (42,873) (47,727)
-------- -------- -------- -------- -------- -------- --------
Fixed charges excluding interest
expense - deposits.......................(d) $ 8,554 $ 6,892 $ 16,081 $ 13,646 $ 8,669 $ 4,398 $ 3,143
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Preferred dividends......................... $ 0 $ 805 $ 1,610 $ 1,610 $ 1,091 $ 0 $ 0
Effective tax rate.......................... 33.61% 34.56% 35.65% 36.49% 38.04% 37.12% 36.13%
Preferred dividends - grossed
up (1 - tax rate)......................... $ 0 $ 1,230 2,502 $ 2,535 $ 1,761 $ 0 $ 0
Earnings to combined fixed charges
and preferred stock dividends:
Excluding interest on deposits ((b)/(d)).. 4.86x 4.96x 4.14x 4.46x 5.23x 7.60x 8.53x
Including interest on deposits ((a)/(c)).. 1.65x 1.58x 1.52x 1.55x 1.66x 1.61x 1.46x
CALCULATION OF FULLY DILUTED
EARNINGS WITH REGARD TO
CONVERTIBLE DEBENTURES
Six Months Ended June 30, Year ended December 31,
------------------------- --------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
Income before taxes......................... $ 33,034 $ 27,308 $ 50,517 $ 47,161 $ 36,681 $ 29,030 $ 23,654
Interest expense on convertible
debentures................................ 0 0 86 137 415 126 0
-------- -------- -------- -------- -------- -------- --------
Adjusted income before interest
on convertible debentures................ 33,034 27,308 50,603 47,298 37,096 29,156 23,654
Adjusted income tax provision............... 11,102 9,439 18,058 17,259 14,106 10,822 8,546
-------- -------- -------- -------- -------- -------- --------
Adjusted net income......................... $ 21,932 $ 17,869 $ 32,545 $ 30,039 $ 22,990 $ 18,334 $ 15,108
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
</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 $40,000,000 of Capital
Securities and to the incorporation by reference therein of our report dated
January 23, 1997 (except for Note 3, as to which the date is February 28,
1997), 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, 1996, filed with the Securities and
Exchange Commission.
We also consent to the reference to our firm under the caption "Experts"
and to the use of our report dated September 19, 1997, with respect to the
financial statements of Key Bank National Association, Cheyenne, Wyoming,
incorporated by reference in the Registration Statement (Form S-3) and
related Prospectus of Community First Bankshares, Inc. for the registration
of $40,000,000 of Capital Securities.
ERNST & YOUNG LLP
Minneapolis, Minnesota
October 9, 1997
<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 use of our audit report dated February 1, 1995, with respect to the
consolidated financial statements of Minowa Bancshares, 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 up to an aggregate $40,000,000 of cumulative Capital Securities of CFB
Capital II of together with Junior Subordinated Debentures and the
Guarantee of Community First Bankshares, Inc.
Hacker, Nelson & Co., P.C.
Decorah, Iowa
October 7, 1997
<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. (the
"Company") and CFB Capital II, for the registration of the ____% Cumulative
Capital Securities of CFB Capital II, the ____% Junior Subordinated
Debentures of the Company and the Guarantee of the Company with respect to
the ____% Cumulative Capital Securities.
Fortner, Bayens, Levkulich and Co., P.C.
Denver, Colorado
October 8, 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
October 8, 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.
CFB CAPITAL II
(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)
___% Cumulative Capital Securities of CFB Capital II
(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 1st day of October, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Patricia A. Evans By: /s/ James P. Lawler
---------------------- --------------------
Assistant Secretary Name: James P. Lawler
Title: Vice President
<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 atural 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
5
<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
6
<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
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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 JANUARY 16, 1997
<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. The Board of Directors 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
<PAGE>
members, or at the call of the Chairman of the Board of Directors 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 members who shall be selected by the Board of Directors from its
own members and who
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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 such times to be determined
by a majority of its members or at the call of its chairman. A majority of
its members shall be necessary to constitute a quorum for the transaction of
business.
(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. The Vice Chairman of the
Board of
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<PAGE>
Directors shall preside at all 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
7
<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 though 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: October 1, 1997 By: /s/ James P. Lawler
--------------------
Name: James P. Lawler
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 June 30, 1997.
-------------
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208,942
Interest-bearing balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403,700
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 905,200
Federal funds sold and securities purchased under agreements to resell . . . . . . . . . . . . . . . . . . . . . . . . 151,700
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,816,484
LESS: Allowance for loan and lease losses. . . . . . 54,535
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve . . . . . . . . . . . . . . . . . . . . . . . . . 3,761,949
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,762
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,751
Investments in unconsolidated subsidiaries and associated companies. . . . . . . . . . . . . . . . . . . . . . . . . . 42
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,572
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,295
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,640,913
CONTINUED ON NEXT PAGE
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,864,774
Noninterest-bearing . . . . . . . . 875,081
Interest-bearing. . . . . . . . . . 2,989,693
Federal funds purchased and Securities sold under agreements to repurchase . . . . . . . . . . . . . . . . . . . . . . 337,784
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,000
Trading liabilities (from Schedule RC-D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 775,000
With original maturity of more than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,000
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,197
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,199,755
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376,212
Net unrealized holding gains (losses) on available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . (2,328)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,158
Total liabilities, limited-life preferred stock, and equity capital. . . . . . . . . . . . . . . . . . . . . . . . . . 5,640,913
</TABLE>
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)
___% 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 1st day
of October, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Patricia A. Evans By: /s/ James P. Lawler
---------------------- --------------------
Assistant Secretary Name: James P. Lawler
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
5
<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
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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
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on 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 JANUARY 16, 1997
<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. The Board of Directors 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
<PAGE>
members, or at the call of the Chairman of the Board of Directors 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 members who shall be selected by the Board of Directors from its own
members and who
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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 such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(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. The Vice Chairman of the Board
of
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<PAGE>
Directors shall preside at all 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
7
<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 though
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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<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: October 1, 1997 By: /s/ James P. Lawler
---------------------
Name: James P. Lawler
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 June 30, 1997.
-----------
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins............. 208,942
Interest-bearing balances....................................... 0
Held-to-maturity securities......................................... 403,700
Available-for-sale securities....................................... 905,200
Federal funds sold and securities purchased under agreements
to resell ...................................................... 151,700
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 3,816,484
LESS: Allowance for loan and lease losses........... 54,535
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and
reserve................................................... 3,761,949
Assets held in trading accounts..................................... 0
Premises and fixed assets (including capitalized leases) ........... 95,762
Other real estate owned............................................. 1,751
Investments in unconsolidated subsidiaries and associated companies. 42
Customers' liability to this bank on acceptances outstanding ....... 0
Intangible assets................................................... 3,572
Other assets ....................................................... 108,295
Total assets ....................................................... 5,640,913
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................................. 3,864,774
Noninterest-bearing................ 875,081
Interest-bearing................... 2,989,693
Federal funds purchased and Securities sold under agreements
to repurchase .................................................. 337,784
Demand notes issued to the U.S. Treasury ........................... 95,000
Trading liabilities (from Schedule RC-D) ........................... 0
Other borrowed money:............................................... ///////
With original maturity of one year or less...................... 775,000
With original maturity of more than one year ................... 43,000
Bank's liability on acceptances executed and outstanding ........... 0
Subordinated notes and debentures................................... 0
Other liabilities (from Schedule RC-G) ............................. 84,197
Total liabilities................................................... 5,199,755
EQUITY CAPITAL
Perpetual preferred stock and related surplus....................... 0
Common Stock ....................................................... 500
Surplus (exclude all surplus related to preferred stock) ........... 62,118
Undivided profits and capital reserves ............................. 376,212
Net unrealized holding gains (losses) on available-for-sale
securities .................................................... (2,328)
Total equity capital ............................................... 441,158
Total liabilities, limited-life preferred stock, and equity capital. 5,640,913
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 1st day
of October, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Patricia A. Evans By:/s/ James P. Lawler
-------------------------- -------------------------
Assistant Secretary Name: James P. Lawler
Title: Vice President
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<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 or 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
5
<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 theron 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 stoc
(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 JANUARY 16, 1997
<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. The Board of Directors 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
<PAGE>
members, or at the call of the Chairman of the Board of Directors 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 members who shall be selected by the Board of Directors from its
own members and who
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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 is 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 such times to be determined
by a majority of its members or at the call of its chairman. A majority of
its members shall be necessary to constitute a quorum for the transaction of
business.
(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. The Vice Chairman of the
Board of
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Directors shall preside at all 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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<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 though 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
(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: October 1, 1997 By: /S/ JAMES P. LAWLER
-----------------------------
Name: James P. Lawler
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 June 30, 1997.
------------
ASSETS
<TABLE>
<CAPTION>
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins. . . . . . . . . . . . . . . . . . . 208,942
Interest-bearing balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403,700
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 905,200
Federal funds sold and securities purchased under agreements to resell . . . . . . . . . . . 151,700
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,816,484
LESS: Allowance for loan and lease losses. . . . . . 54,535
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve . . . . . . . . . . . . 3,761,949
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . . . 95,762
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,751
Investments in unconsolidated subsidiaries and associated companies. . . . . . . . . . . . . 42
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . . . 0
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,572
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,295
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,640,913
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,864,774
Noninterest-bearing . . . . . . . . 875,081
Interest-bearing. . . . . . . . . . 2,989,693
Federal funds purchased and Securities sold under agreements to repurchase . . . . . . . . . 337,784
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . 95,000
Trading liabilities (from Schedule RC-D) . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less . . . . . . . . . . . . . . . . . . . . . . . 775,000
With original maturity of more than one year . . . . . . . . . . . . . . . . . . . . . . 43,000
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . . . . 0
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,197
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,199,755
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . 376,212
Net unrealized holding gains (losses) on available-for-sale securities . . . . . . . . . . . (2,328)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,158
Total liabilities, limited-life preferred stock, and equity capital. . . . . . . . . . . . . 5,640,913
</TABLE>
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