<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 31, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
TRIANGLE BANCORP, INC.
(Exact name of registrant as specified in charter)
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NORTH CAROLINA 6022 56-1764546
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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TRIANGLE CAPITAL TRUST
(Exact name of registrant as specified in charter)
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<C> <C> <C>
DELAWARE 6719 APPLIED FOR
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. EMPLOYER
incorporation or organization) Classification Code Number) IDENTIFICATION NO.)
ALEXANDER M. DONALDSON, ESQ.
4300 GLENWOOD AVENUE 4300 GLENWOOD AVENUE
RALEIGH, NORTH CAROLINA 27612 RALEIGH, NORTH CAROLINA 27612
(919) 881-0455 (919) 881-0455
(Address, including zip code, and telephone (Name, address, including zip code, and telephone
number, number, including area code, of agent for service)
including area code, of each registrant's
principal executive offices)
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COPIES TO:
BARNEY STEWART III, ESQ.
MOORE & VAN ALLEN, PLLC
100 NORTH TRYON STREET, FLOOR 47
CHARLOTTE, NORTH CAROLINA 28202
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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<CAPTION>
=========================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- - -------------------------------------------------------------------------------------------------------------------------
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Capital Securities of Triangle Capital
Trust................................ $20,000,000 100% $20,000,000(1) $6,060.61
- - -------------------------------------------------------------------------------------------------------------------------
Junior Subordinated Debentures of
Triangle Bancorp, Inc.(2)............ -- -- -- --
- - -------------------------------------------------------------------------------------------------------------------------
Triangle Bancorp, Inc. Guarantee with
respect to Capital Securities(3)..... -- -- -- --
- - -------------------------------------------------------------------------------------------------------------------------
Total(4)..................... $20,000,000(5) 100% $20,000,000(5) $6,060.61
=========================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(a) of the Securities Act of 1933 solely for
the purpose of computing the registration fee.
(2) The Old Junior Subordinated Debentures were originally purchased by Triangle
Capital Trust with the proceeds of the sale of the Old Capital Securities by
Triangle Capital Trust. No separate consideration will be received for the
New Junior Subordinated Debentures distributed upon any liquidation of
Triangle Capital Trust.
(3) No separate consideration will be received for the Triangle Bancorp, Inc.
Guarantee.
(4) This Registration Statement is deemed to cover: the New Junior Subordinated
Debentures; the rights of holders of the New Junior Subordinated Debentures
under the Indenture; the rights of holders of the New Capital Securities
under the Trust Agreement; the rights of holders of the New Capital
Securities under the Guarantee; and certain backup undertakings as described
herein.
(5) Such amount represents the initial public offering price of the Capital
Securities to be exchanged hereunder and the principal amount of the
Subordinated Debentures that may be distributed to holders of the Capital
Securities upon any liquidation of Triangle Capital Trust.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PROSPECTUS
- - ----------
TRIANGLE CAPITAL TRUST
OFFER TO EXCHANGE 9.375% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY
AND ALL OUTSTANDING 9.375% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
TRIANGLE BANCORP, INC.
---------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 PM, NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED.
---------------------
Triangle Capital Trust (the "Issuer Trust"), a statutory business trust
created under the laws of the State of Delaware, together with Triangle Bancorp,
Inc., a North Carolina corporation (the "Company"), as sponsor of the Issuer
Trust, hereby offer upon the terms and subject to the conditions set forth in
this Prospectus (as the same may be amended or supplemented from time to time,
the "Prospectus") and in the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer"), to exchange up to $20,000,000 aggregate
liquidation amount of its 9.375% Capital Securities which have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement (as defined herein) of which this Prospectus
constitutes a part, for a like liquidation amount of its outstanding 9.375%
Capital Securities, of which $20,000,000 aggregate liquidation amount is
outstanding. Pursuant to the Exchange Offer, the Company is also exchanging (i)
the Old Guarantee for the Guarantee and (ii) $20,000,000 aggregate principal
amount of the Old Junior Subordinated Debentures for $20,000,000 aggregate
principal amount of the New Junior Subordinated Debentures. The Guarantee and
the Subordinated Debentures have also been registered under the Securities Act.
See "Certain Defined Terms," "Summary," "Description of the New Capital
Securities," "Description of the New Junior Subordinated Debentures" and
"Description of the Guarantee."
The terms of the New Capital Securities are identical in all material
respects to the respective terms of the Old Capital Securities, except that (i)
the New Capital Securities have been registered under the Securities Act and
therefore will not be subject to certain restrictions on transfer applicable to
the Old Capital Securities, (ii) the New Capital Securities will not provide for
any increase in the Distribution rate thereon and (iii) the New Junior
Subordinated Debentures will not provide for any increase in the interest rate
thereon. See "Description of the New Capital Securities" and "Description of the
New Junior Subordinated Debentures." The New Capital Securities are being
offered for exchange in order to satisfy certain obligations of the Company and
the Issuer Trust under the Registration Rights Agreement.
(continued on next page)
SEE "CERTAIN DEFINED TERMS" ON PAGE 4 FOR A GLOSSARY OF CERTAIN CAPITALIZED
TERMS USED IN THIS PROSPECTUS WITHOUT DEFINITION.
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 14 OF THIS PROSPECTUS FOR CERTAIN
INFORMATION RELEVANT TO HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE
EXCHANGE OFFER.
---------------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The New Capital Securities will be issued, and may be transferred, only in
blocks having a liquidation amount of not less than $100,000 (100 Capital
Securities). Any transfer, sale or other disposition of Capital Securities in a
block having a liquidation amount of less than $100,000 shall be deemed to be
void and of no legal effect whatsoever. Any such transferee shall be deemed not
to be the holder of such Capital Securities for any purpose, including but not
limited to the receipt of distributions on such Capital Securities, and such
transferee shall be deemed to have no interest whatsoever in such Capital
Securities.
The date of this Prospectus is , 1997.
<PAGE> 3
(cover page continued)
Based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to third
parties, the Company and the Issuer Trust believe that the New Capital
Securities issued pursuant to the Exchange Offer may be offered for resale,
resold or otherwise transferred by holders thereof (other than any holder that
is an "affiliate" of the Company or the Issuer Trust as defined under Rule 405
of the Securities Act), provided that such New Capital Securities are acquired
in the ordinary course of such holders' business and such holders are not
engaged in, and do not intend to engage in, a distribution of such New Capital
Securities and have no arrangement or understanding with any person to
participate in the distribution of such New Capital Securities. However, the
staff of the Commission has not considered the Exchange Offer in the context of
a no-action letter, and there can be no assurance that the staff of the
Commission would make a similar determination with respect to the Exchange Offer
as in such other circumstances. By tendering the Old Capital Securities in
exchange for New Capital Securities, each holder, other than a broker-dealer,
will represent to the Company and the Issuer Trust that: (i) it is not an
affiliate of the Company or the Issuer Trust (as defined under Rule 405 of the
Securities Act); (ii) any New Capital Securities to be received by it were
acquired in the course of its ordinary business; and (iii) it is not engaged in,
and does not intend to engage in, a distribution of the New Capital Securities
and has no arrangement or understanding to participate in a distribution of the
New Capital Securities. See "Risk Factors--Consequences of a Failure to Exchange
Old Capital Securities" and "The Exchange Offer--Resales of New Capital
Securities."
Each broker-dealer that receives New Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of New Capital Securities received in exchange for
Old Capital Securities where such Old Capital Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company and the Issuer Trust have agreed that, starting on the
date on which the Exchange Offer is consummated and ending on the close of
business one year after such date, they will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
In that regard, each Participating Broker-Dealer (as defined herein) who
surrenders Old Capital Securities pursuant to the Exchange Offer will be deemed
to have agreed, by execution of the Letter of Transmittal, that, upon receipt of
notice from the Company or the Issuer Trust of the occurrence of any event or
the discovery of any fact which makes any statement contained or incorporated by
reference in this Prospectus untrue in any material respect or which causes this
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference herein, in light of the
circumstances under which they were made, not misleading or of the occurrence of
certain other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of New Capital Securities (or
the Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant
to this Prospectus until the Company or the Issuer Trust has amended or
supplemented this Prospectus to correct such misstatement or omission and has
furnished copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Company or the Issuer Trust has given notice that the sale
of the New Capital Securities (or the Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The New Capital Securities
will be a new issue of securities for which there currently is no market.
Although the Initial Purchaser (as defined herein) has informed the Company and
the Issuer Trust that it currently intends to make a market in the New Capital
Securities, it is not obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, there can be no assurance
as to the development or liquidity of any market for the New Capital Securities.
Neither the Company nor the Issuer Trust currently intends to apply for listing
of the New Capital Securities on any securities exchange or for quotation
through the National Association of Securities Dealers Automated Quotation
System.
ii
<PAGE> 4
(cover page continued)
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will be
subject to the same limitations applicable thereto under the Trust Agreement
(except for those rights which terminate upon consummation of the Exchange
Offer). Any Old Capital Securities which remain outstanding after consummation
of the Exchange Offer and the New Capital Securities issued in the Exchange
Offer will vote together as a single class for purposes of determining whether
holders of the requisite percentage in outstanding liquidation amount thereof
have taken certain actions or exercised certain rights under the Trust
Agreement. Following consummation of the Exchange Offer, the holder of Old
Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Company nor the Issuer Trust
will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act of
the Old Capital Securities held by them. To the extent that Old Capital
Securities are tendered and accepted in the Exchange Offer, a holder's ability
to sell untendered Old Capital Securities could be adversely affected. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities."
The New Capital Securities offered hereby represent undivided beneficial
interests in the assets of the Issuer Trust. The Company has acquired all the
Common Securities. The Issuer Trust exists for the sole purpose of issuing the
Trust Securities, investing the proceeds thereof in the Subordinated Debentures
of the Company, effecting the Exchange Offer, and certain other limited
activities described herein.
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on , 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is extended
by the Company and the Issuer Trust (in which case the term "Expiration Date"
shall mean the latest date and time to which the Exchange Offer is extended).
Tenders of Old Capital Securities may be withdrawn at any time on or prior to
the Expiration Date. The Exchange Offer is not conditioned upon any minimum
liquidation amount of Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions which
may be waived by the Company or the Issuer Trust and to the terms and provisions
of the Registration Rights Agreement. The Company has agreed to pay all expenses
of the Exchange Offer. See "The Exchange Offer--Fees and Expenses." Each New
Capital Security will pay cumulative Distributions from the most recent
Distribution Payment Date of the Old Capital Securities surrendered in exchange
for such New Capital Securities or, if no Distributions have been paid on such
Old Capital Securities, from June 3, 1997. Holders of the Old Capital Securities
whose Old Capital Securities are accepted for exchange will not receive
accumulated Distributions on such Old Capital Securities for any period from and
after the last Distribution Payment Date on such Old Capital Securities prior to
the original issue date of the New Capital Securities or, if no such
Distributions have been paid, will not receive any accumulated Distributions on
such Old Capital Securities, and will be deemed to have waived the right to
receive any Distributions on such Old Capital Securities accumulated from and
after such Distribution Payment Date or, if no such Distributions have been paid
or duly provided for, from and after June 3, 1997. This Prospectus, together
with the Letter of Transmittal, is being sent to all registered holders of Old
Capital Securities as of , 1997.
Neither the Company nor the Issuer Trust will receive any cash proceeds
from the issuance of the New Capital Securities offered hereby. No
dealer-manager is being used in connection with this Exchange Offer.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE
SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION
WHERE SUCH OFFER WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION.
iii
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of Sections 13 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and in accordance therewith files reports and other information with the
Commission. Any reports and other information filed by the Company with the
Commission may be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional offices in
Chicago, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and in
New York, Seven World Trade Center, 13th Floor, New York, New York 10048. Copies
of such material may also be obtained by mail from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants who file electronically with the
Commission. In addition, such reports, proxy statements and other information
can be inspected at NASDAQ, 1735 K Street, N.W., Washington, D.C. 20006, on
whose National Market System the common stock, no par value per share, of the
Company is traded.
No separate financial statements of the Issuer Trust have been included
herein. The Company and the Issuer Trust do not consider that such financial
statements would be material to holders of the Capital Securities because the
Issuer Trust has no independent operations and is not engaged in and does not
propose to engage in any activity other than holding as trust assets the
Subordinated Debentures, issuing the Trust Securities, effecting the Exchange
Offer and engaging in activities necessary or incidental thereto. All of the
Common Securities of the Issuer Trust are owned by the Company and the Company's
obligations described herein under the Indenture, the Trust Agreement (including
its obligations to pay costs, expenses, debts and other obligations of the
Issuer Trust, other than with respect to the Trust Securities), the Subordinated
Debentures and the Guarantee, taken together, constitute a full and
unconditional guarantee on a subordinated basis by the Company of amounts due on
the Capital Securities. See "Triangle Capital Trust," "Description of the New
Capital Securities," "Description of the New Junior Subordinated Debentures" and
"Description of the Guarantee." In addition, the Company does not expect that
the Issuer Trust will file reports under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(together with all exhibits thereto, the "Registration Statement") filed by the
Company and the Issuer Trust with the Commission under the Securities Act. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission, and reference is hereby made to the Registration
Statement for further information with respect to the Company and the New
Capital Securities. Any statements contained herein concerning the provisions of
any document are not necessarily complete, and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
This Prospectus may contain or incorporate by reference statements which
may constitute "forward-looking statements" within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. Prospective investors
are cautioned that any such forward-looking statements are not guarantees for
future performance and involve risks and uncertainties, and that actual results
may differ materially from those contemplated by such forward-looking
statements. Important factors currently known to management that could cause
actual results to differ materially from those in forward-looking statements
include significant fluctuations in interest rates, inflation, economic
recession, significant changes in the federal and state legal and regulatory
environment and tax laws, significant underperformance in the Company's
portfolio of outstanding loans, and competition in the Company's markets.
Neither the Company nor the Issuer Trust undertakes any obligation to update or
revise forward-looking statements to reflect changed assumptions, the occurrence
of unanticipated events or changes to future operating results over time.
2
<PAGE> 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission, are incorporated by reference in this Prospectus: the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997, and the Company's Current Reports on Form 8-K dated April 1, 1997, May
16, 1997, May 23, 1997, September 22, 1997, October 17, 1997 and October 31,
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 any offering of securities hereunder shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated by reference or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for all purposes of the Registration
Statement and this Prospectus to the extent that a statement contained herein or
in any subsequently filed document that is also incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus. As used herein, the terms "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed to be incorporated
herein by reference, as the same may be amended, supplemented or otherwise
modified from time to time. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
THE COMPANY AT 4300 GLENWOOD AVENUE, RALEIGH, NORTH CAROLINA 27612 (TELEPHONE
NUMBER (919) 881-0455), ATTENTION: SUSAN C. GILBERT, SECRETARY. IN ORDER TO
ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY
, 1997, FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION DATE.
3
<PAGE> 7
TABLE OF CONTENTS
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Available Information....................... 2
Incorporation of Certain Documents
by Reference.............................. 3
Certain Defined Terms....................... 4
Summary..................................... 5
Risk Factors................................ 14
Triangle Bancorp, Inc....................... 22
Consolidated Ratios of Earnings to Fixed
Charges................................... 23
Selected Consolidated Financial Data and
Other Information......................... 24
Triangle Capital Trust...................... 24
Accounting Treatment........................ 25
The Exchange Offer.......................... 25
Description of the New Capital Securities... 34
Description of the New Junior Subordinated
Debentures................................ 47
Description of the Guarantee................ 56
Relationship among the Capital Securities,
the Subordinated Debentures and the
Guarantee................................. 58
United States Federal Income Taxation....... 60
Plan of Distribution........................ 65
Benefit Plan Considerations................. 65
Supervision, Regulation and Other Matters... 67
Legal Matters............................... 69
Experts..................................... 69
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CERTAIN DEFINED TERMS
As used in this Prospectus, the following terms have the meanings
indicated:
"Capital Securities" means the New Capital Securities and the Old Capital
Securities of the Issuer Trust.
"Common Securities" means the common securities of the Issuer Trust
representing undivided beneficial interests in the assets of the Issuer Trust.
"Distribution Payment Date" means the 1st day of June and December in each
year, beginning December 1, 1997.
"Guarantee" means the Guarantee Agreement, from the Company in favor of
Bankers Trust Company, as Guarantee Trustee for the benefit of the holders of
Capital Securities, to be issued in exchange for the Old Guarantee.
"Indenture" means the Junior Subordinated Indenture, dated as of June 3,
1997, between the Company and Bankers Trust Company, as Trustee for the benefit
of the holders of the Subordinated Debentures and any indenture supplemental
thereto pursuant to which the Subordinated Debentures are to be issued.
"Interest Payment Date" means the 1st day of June and December in each
year, beginning December 1, 1997.
"New Capital Securities" means the $20,000,000 aggregate liquidation amount
of 9.375% Capital Securities to be issued by the Issuer Trust in exchange for
Old Capital Securities.
"New Junior Subordinated Debentures" means the $20,000,000 aggregate
principal amount of 9.375% New Junior Subordinated Debentures due 2027 to be
issued by the Company to the Issuer Trust in exchange for $20,000,000 aggregate
principal amount of Old Junior Subordinated Debentures.
"Old Capital Securities" means the $20,000,000 aggregate liquidation amount
of 9.375% Capital Securities issued by the Issuer Trust on June 3, 1997 and
having a per annum distribution rate of 9.375%.
"Old Guarantee" means the Guarantee Agreement, dated as of June 3, 1997,
from the Company in favor of Bankers Trust Company, as Guarantee Trustee for the
benefit of the holders of Old Capital Securities.
"Old Junior Subordinated Debentures" means the $20,000,000 aggregate
principal amount of Old Junior Subordinated Debentures issued by the Company to
the Issuer Trust on June 3, 1997, and having a per annum distribution rate of
9.375%.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of June 3, 1997, among the Issuer Trust, the Company, and Wheat First
Securities, Inc. as Initial Purchaser (the "Initial Purchaser").
"Subordinated Debentures" means the New Junior Subordinated Debentures and
the Old Junior Subordinated Debentures.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated as
of June 3, 1997, among the Company, as Depositor, Bankers Trust Company, as
Property trustee (the "Property Trustee"), Bankers Trust (Delaware), as Delaware
trustee (the "Delaware Trustee"), and the Administrators appointed pursuant to
Section 8.20 thereof, pursuant to which Capital Securities were, and will be,
issued.
"Trust Securities" means the Common Securities and the Capital Securities.
4
<PAGE> 8
SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial statements,
including the notes thereto, appearing elsewhere or incorporated by reference
herein. Holders of Old Capital Securities should consider carefully the factors
set forth herein under "Risk Factors." As used in this Prospectus, the "Company"
includes Triangle Bancorp, Inc. and its respective predecessors and
subsidiaries, except as the context otherwise may require.
TRIANGLE BANCORP, INC.
The Company is a registered bank holding company, chartered under the laws
of North Carolina, and headquartered in Raleigh, North Carolina, with banking
offices located in various communities in North Carolina. The Company operates
through Triangle Bank, a North Carolina chartered commercial bank that began
operations on January 4, 1988 (the "Bank"). The Bank provides a wide variety of
retail and commercial banking products and services, but has focused on lending
to small- and medium-sized businesses and to individuals located in the
communities it serves. At June 30, 1997 the Company had total consolidated
assets of approximately $1.03 billion, total consolidated deposits of
approximately $852 million and total consolidated shareholders' equity of
approximately $92 million.
Since 1991, the Company has experienced significant growth, both internally
and through acquisitions of unaffiliated institutions. The Company recently
completed two acquisitions, as described further under "Triangle Bancorp,
Inc. -- Recent Acquisitions." While the Company has significantly expanded its
branch system, it has emphasized integrating the acquired operations in a manner
that maintains credit quality and promotes operational efficiency. At June 30,
1997, the Company had nonperforming assets of $6.2 million, or .88% of gross
loans and other real estate owned. Net charge-offs for 1996 were 0.16% of
average loans. Net charge-offs for the first half of 1997 were 0.01% of average
loans. The allowance for loan losses at June 30, 1997 was 1.54% of gross loans
and 175.58% of nonperforming loans. The efficiency ratios of the Company for the
1996 fiscal year and for the first half of 1997 were 60% and 51%, respectively.
The Company's returns on average assets and average equity for the 1996 fiscal
year and the first half of 1997 (annualized) were 1.22% and 1.56% and 13.63% and
17.64%, respectively.
The Company's strategy includes continuing to (i) develop its branch system
through acquisitions and de novo branch openings, including supermarket
branches, (ii) provide personalized, community-oriented banking services with a
focus on lending to small- and medium-sized businesses and to individuals within
the communities in which it operates and (iii) maintain its credit quality and
operational efficiency.
For additional information regarding the Company and its financial
condition and results of operations, see "Triangle Bancorp, Inc." and "Selected
Consolidated Financial Data and Other Information.
TRIANGLE CAPITAL TRUST
The Issuer Trust is a statutory business trust created under Delaware law
on May 28, 1997 pursuant to the Delaware Business Trust Act (the "Trust Act").
The Issuer Trust will be governed by the Amended and Restated Trust Agreement
among the Company, as Depositor, Bankers Trust (Delaware), as Delaware Trustee,
and Bankers Trust Company, as Property Trustee. The Issuer Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities, (ii) using
the proceeds from the sale of the Trust Securities to acquire the Subordinated
Debentures and (iii) engaging in only those other activities necessary,
convenient or incidental thereto (such as registering the transfer of the Trust
Securities). Accordingly, after the completion of the Exchange Offer the New
Junior Subordinated Debentures will be the sole assets of the Issuer Trust, and
payments under the New Junior Subordinated Debentures will be the sole source of
revenue of the Issuer Trust.
The principal executive offices of the Company are located at 4300 Glenwood
Avenue, Raleigh, North Carolina 27612 (telephone number (919) 881-0455).
5
<PAGE> 9
THE EXCHANGE OFFER
The Exchange Offer......... Up to $20,000,000 aggregate liquidation amount of
New Capital Securities are being offered in
exchange for a like aggregate liquidation amount
of Old Capital Securities. Old Capital Securities
may be tendered for exchange in whole or in part
in a liquidation amount of $100,000 (100 Capital
Securities) or any integral multiple of $1,000 in
excess thereof. The Company and the Issuer Trust
are making the Exchange Offer in order to satisfy
their obligations under the Registration Rights
Agreement relating to the Old Capital Securities.
For a description of the procedures for tendering
Old Capital Securities, see "The Exchange
Offer -- Procedures for Tendering Old Capital
Securities."
Expiration Date............ 5:00 p.m., New York City time, on , 1997
(such time on such date being hereinafter called
the "Expiration Date") unless the Exchange Offer
is extended by the Company and the Issuer Trust
(in which case the term "Expiration Date" shall
mean the latest date and time to which the
Exchange Offer is extended). See "The Exchange
Offer -- Expiration Date; Extensions; Amendments."
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to certain
conditions, which may be waived by the Company and
the Issuer Trust in their sole discretion. The
Exchange Offer is not conditioned upon any minimum
liquidation amount of Old Capital Securities being
tendered. See "The Exchange Offer -- Conditions to
the Exchange Offer." The Company and the Issuer
Trust reserve the right in their sole and absolute
discretion, subject to applicable law, at any time
and from time to time, (i) to delay the acceptance
of the Old Capital Securities for exchange, (ii)
to terminate the Exchange Offer if certain
specified conditions have not been satisfied,
(iii) to extend the Expiration Date of the
Exchange Offer and retain all Old Capital
Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of holders
of Old Capital Securities to withdraw their
tendered Old Capital Securities, or (iv) to waive
any condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The Exchange
Offer -- Expiration Date; Extensions; Amendments."
Withdrawal Rights.......... Tenders of Old Capital Securities may be withdrawn
at any time on or prior to the Expiration Date by
delivering a written notice of such withdrawal to
the Exchange Agent (as defined herein) in
conformity with certain procedures set forth below
under "The Exchange Offer -- Withdrawal Rights."
Procedures for Tendering
Old Capital Securities..... Tendering holders of Old Capital Securities must
complete and sign a Letter of Transmittal in
accordance with the instructions contained therein
and forward the same by mail, facsimile or hand
delivery, together with any other required
documents, to the Exchange Agent, either with the
Old Capital Securities to be tendered or in
compliance with the specified procedures for
guaranteed delivery of Old Capital Securities.
Certain brokers, dealers, commercial banks, trust
companies and other nominees may also effect
tenders by book-entry transfer
6
<PAGE> 10
including an Agent's Message in lieu of a Letter
of Transmittal. Holders of Old Capital Securities
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
are urged to contact such person promptly if they
wish to tender Old Capital Securities pursuant to
the Exchange Offer. See "The Exchange
Offer -- Procedures for Tendering Old Capital
Securities." Letters of Transmittal and
certificates representing Old Capital Securities
should not be sent to the Company or the Issuer
Trust. Such documents should only be sent to the
Exchange Agent. Questions regarding how to tender
and requests for information should be directed to
the Exchange Agent. See "The Exchange
Offer -- Exchange Agent."
Resales of New Capital
Securities................. Based on interpretations by the staff of the
Commission (the "Staff") as set forth in no-action
letters issued to third parties, the Company and
the Issuer Trust believe that holders of Old
Capital Securities (other than any holder that is
an "affiliate" of the Company or the Issuer Trust
as defined under Rule 405 of the Securities Act)
who exchange their Old Capital Securities for New
Capital Securities pursuant to the Exchange Offer
may offer such New Capital Securities for resale,
resell such New Capital Securities and otherwise
transfer such New Capital Securities without
compliance with the registration and prospectus
delivery provisions of the Securities Act,
provided that such New Capital Securities are
acquired in the ordinary course of such holders'
business and such holders are not engaged in, and
do not intend to engage in, a distribution of such
New Capital Securities and have no arrangement or
understanding with any person to participate in
the distribution of such New Capital Securities.
However, the Staff has not considered the Exchange
Offer in the context of a no-action letter, and
there can be no assurance that the Staff would
make a similar determination with respect to the
Exchange Offer. However, any holder of Old Capital
Securities who is an "affiliate" of the Company or
the Issuer Trust or who intends to participate in
the Exchange Offer for the purpose of distributing
the New Capital Securities, or any broker-dealer
who purchased the Old Capital Securities from the
Issuer Trust to resell pursuant to Rule 144A or
any other available exemption under the Securities
Act, (a) will not be able to rely on the
interpretations of the Staff set forth in the
above-mentioned interpretive letters, (b) will not
be permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and (c)
must comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any sale or other transfer of such
Old Capital Securities unless such sale is made
pursuant to an exemption from such requirements.
In addition, as described below, if any broker-
dealer holds Old Capital Securities acquired for
its own account as a result of market-making or
other trading activities and exchanges such Old
Capital Securities for New Capital Securities,
then such broker-dealer must deliver a prospectus
meeting the requirements of the Securities Act in
connection with any resales of such New Capital
Securities.
Each holder of Old Capital Securities (other than
certain specified holders) who wishes to exchange
Old Capital Securities for New Capital Securities
in the Exchange Offer will be required to
represent that (i) it
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<PAGE> 11
is not an "affiliate" of the Company or the Issuer
Trust, (ii) any New Capital Securities to be
received by it are being acquired in the ordinary
course of its business, and (iii) it is not
engaged in, and does not intend to engage in, a
distribution (within the meaning of the Securities
Act) of such New Capital Securities and has no
arrangement or understanding to participate in a
distribution of New Capital Securities. Each
broker-dealer that receives New Capital Securities
for its own account pursuant to the Exchange Offer
must acknowledge that it will deliver a prospectus
meeting the requirements of the Securities Act in
connection with any resale of such New Capital
Securities. The Letter of Transmittal states that
by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the
meaning of the Securities Act. Based on the
position taken by the Staff in the interpretive
letters referred to above, the Company and the
Issuer Trust believe that broker-dealers who
acquired Old Capital Securities for their own
accounts as a result of market-making activities
or other trading activities ("Participating
Broker-Dealers") may fulfill their prospectus
delivery requirements with respect to the New
Capital Securities received upon exchange of such
Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment
from the original sale of the Old Capital
Securities) with a prospectus meeting the
requirements of the Securities Act, which may be
the prospectus prepared for an exchange offer so
long as it contains a description of the plan of
distribution with respect to the resale of such
New Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of New
Capital Securities received in exchange for Old
Capital Securities where such Old Capital
Securities were acquired by such Participating
Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject
to certain provisions set forth in the
Registration Rights Agreement and to the
limitations described below under "The Exchange
Offer -- Resales of New Capital Securities," the
Company and the Issuer Trust have agreed to allow
the Participating Broker-Dealers to use this
Prospectus in connection with resales of such New
Capital Securities for a period of one year after
the Expiration Date, exclusive of any period when
a stop order is in effect. See "Plan of
Distribution." Any Participating Broker-Dealer who
is an "affiliate" of the Company or the Issuer
Trust may not rely on such interpretive letters
and must comply with the registration and
prospectus delivery requirements of the Securities
Act in connection with any resale transaction. See
"The Exchange Offer -- Resales of New Capital
Securities."
Exchange Agent............. The exchange agent with respect to the Exchange
Offer is Bankers Trust Company (the "Exchange
Agent"). The addresses, and telephone and
facsimile numbers of the Exchange Agent are set
forth in "The Exchange Offer -- Exchange Agent"
and in the Letter of Transmittal.
United States Federal
Income Taxation, ERISA
Considerations............. Holders of Old Capital Securities should review
the information set forth under "United States
Federal Income Taxation" and "Benefit Plan
8
<PAGE> 12
Considerations" prior to tendering Old Capital
Securities in the Exchange Offer.
THE NEW CAPITAL SECURITIES
Securities Offered......... Up to $20,000,000 aggregate liquidation amount of
the Issuer Trust's 9.375% Capital Securities which
have been registered under the Securities Act
(liquidation amount $1,000 per Capital Security).
The New Capital Securities will be issued, and the
Old Capital Securities were issued, under the
Trust Agreement. The New Capital Securities and
any Old Capital Securities which remain
outstanding after consummation of the Exchange
Offer will constitute a single series of Capital
Securities under the Trust Agreement and,
accordingly, will vote together as a single class
for purposes of determining whether holders of the
requisite percentage in outstanding liquidation
amount thereof have taken certain actions or
exercised certain rights under the Trust
Agreement. See "Description of New Capital
Securities -- General." The terms of the New
Capital Securities are identical in all material
respects to the terms of the Old Capital
Securities, except that the New Capital Securities
have been registered under the Securities Act and
therefore are not subject to certain restrictions
on transfer applicable to the Old Capital
Securities and will not provide for any increase
in the Distribution rate thereon. See "The
Exchange Offer -- Purpose and Effect of the
Exchange Offer" and "Description of New Capital
Securities."
Distributions.............. Holders of the New Capital Securities are entitled
to receive cumulative cash distributions at an
annual rate of 9.375% on the liquidation amount of
$1,000 per New Capital Security, accruing from the
original date of issuance of the Old Capital
Securities, and (subject to the possible extension
of distribution payment periods described below)
will be payable semi-annually, in arrears, on the
first day of June and December of each year,
commencing December 1, 1997. See "Description of
the New Capital Securities -- Distributions."
Option to Extend Interest
Payment Period............. The Company has the right, at any time, subject to
certain conditions, to defer payments of interest
on the Subordinated Debentures, for Extension
Periods, each not exceeding 10 consecutive
semi-annual periods; provided that no Extension
Period may extend beyond the maturity date of the
Subordinated Debentures. As a consequence of the
Company's extension of the interest payment period
on the Subordinated Debentures, distributions on
the Capital Securities would be deferred but
interest would continue to accrue during any such
Extension Period to the extent permitted by law.
In the event the Company exercises its right to
extend an interest payment period, then during any
Extension Period, subject to certain exceptions,
(i) the Company shall not declare or pay any
dividend on, make any distributions with respect
to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its
capital stock or rights to acquire such capital
stock or make any guarantee payments (other than
payments on the Guarantee) with respect to the
foregoing and (ii) the Company shall not make any
payment of interest on or principal of (or
premium, if any, on), or repay,
9
<PAGE> 13
repurchase or redeem, any debt securities issued
by the Company which rank pari passu with or
junior to the Subordinated Debentures. Upon the
termination of any Extension Period and the
payment of all amounts then due, the Company may
commence a new Extension Period, subject to
certain requirements. See "Description of the New
Junior Subordinated Debentures -- Option to Extend
Interest Payment Period." Should an Extension
Period occur with respect to the Capital
Securities, holders of the Capital Securities will
continue to recognize interest income at an annual
rate of 9.375%, compounded semi-annually, for
United States federal income tax purposes
notwithstanding the deferred receipt of payments
which accrue during the Extension Period. As a
result, such holders will be required to include
such amounts in gross income for United States
federal income tax purposes in advance of the
receipt of cash, and such holders will not receive
the cash from the Issuer Trust related to such
income if such holders dispose of the Capital
Securities prior to the record date for payment of
distributions. See "United States Federal Income
Taxation -- US Holders -- Interest Income and
Original Issue Discount."
Liquidation................ The Company, as the holder of all of the Common
Securities, has the right at any time to dissolve
the Issuer Trust (including, without limitation,
upon the occurrence of a Tax Event, a Capital
Treatment Event or an Investment Company Event
(each as defined herein)), subject to certain
conditions (including the receipt of prior
approval by the Federal Reserve if then required
under applicable capital guidelines or policies of
the Federal Reserve), with the result that, after
satisfaction of liabilities to creditors of the
Issuer Trust (to the extent not satisfied by the
Company), the Company must cause the Subordinated
Debentures to be distributed to the holders of the
Trust Securities on a pro rata basis in accordance
with the respective liquidation amounts thereof,
in liquidation of the Issuer Trust. In addition,
the Issuer Trust will be dissolved and liquidated
under certain other circumstances. See
"Description of the New Capital
Securities -- Liquidation Distribution Upon
Dissolution."
Liquidation Amount......... In the event of the voluntary or involuntary
liquidation, dissolution, winding-up or
termination of the Issuer Trust, after
satisfaction of liabilities to creditors of the
Issuer Trust (to the extent not satisfied by the
Company) holders of the Capital Securities will be
entitled to receive $1,000 per Capital Security
plus an amount equal to accrued and unpaid
distributions thereon to the date of payment,
unless the Subordinated Debentures are distributed
to holders of the Trust Securities in exchange
therefor. If such liquidation distribution can be
paid only in part because the Issuer Trust has
insufficient assets available to pay in full the
aggregate liquidation distribution, then the
amounts payable directly by the Issuer Trust on
the Capital Securities shall be paid on a pro rata
basis. The holders of the Common Securities will
be entitled to receive distributions upon any such
liquidation pro rata with the holders of the
Capital Securities, except that if a Trust
Agreement Event of Default as defined herein has
occurred and is continuing, the Capital Securities
shall have a priority over the Common Securities.
See "Description of the New Capital
Securities -- Liquidation Distribution Upon
Dissolution."
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<PAGE> 14
Maturity................... Upon the repayment of the Subordinated Debentures,
whether at maturity or upon early redemption as
provided in the Indenture, the proceeds from such
repayment will be applied by the Property Trustee
to redeem a like amount of the Trust Securities,
upon the terms and conditions described herein.
See "Description of the New Capital
Securities -- Redemption."
Redemption................. The Trust Securities are subject to mandatory
redemption (i) in whole, but not in part, at the
Stated Maturity upon repayment of the Subordinated
Debentures, (ii) in whole, but not in part,
contemporaneously with the optional redemption at
any time by the Company of the New Junior
Subordinated Debentures at any time within 90 days
following the occurrence and during the
continuation of a Tax Event, Investment Company
Event or Capital Treatment Event in each case,
subject to possible regulatory approval and (iii)
in whole or in part, at any time on or after June
1, 2007, contemporaneously with the optional
redemption by the Company of the Subordinated
Debentures in whole or in part, in each case at
the applicable Redemption Price (as defined
herein). See "Description of New Capital
Securities -- Redemption."
Tax Event, Capital
Treatment Event and
Investment Company Event
Redemption................. If at any time a Tax Event, a Capital Treatment
Event or an Investment Company Event should occur
and be continuing, the Company may, within 90 days
of the occurrence of such Tax Event, Capital
Treatment Event or Investment Company Event,
redeem the Subordinated Debentures in whole or in
part in certain limited circumstances described
herein at a redemption price equal to par plus
accrued and unpaid interest to the redemption
date, subject to the Company having received prior
approval from the Federal Reserve if then required
under applicable capital guidelines or policies of
the Federal Reserve. Upon the redemption of the
Subordinated Debentures, the proceeds of such
redemption will be applied by the Property Trustee
to redeem a like amount of the Trust Securities on
a pro rata basis, upon the terms and conditions
described herein. See "Description of the New
Capital Securities -- Redemption."
The Guarantee.............. The payment of distributions out of moneys held by
the Issuer Trust, payments on liquidation of the
Issuer Trust and payment upon the redemption of
the Capital Securities are guaranteed by the
Company as described herein under "Description of
the Guarantee." The Guarantee covers payments of
distributions and other payments on the Capital
Securities only if and to the extent that the
Issuer Trust has funds available therefor, which
funds will not be available except to the extent
the Company has made payments of interest or
principal or other payments on the Subordinated
Debentures. The Guarantee, when taken together
with the Company's obligations under the
Subordinated Debentures, the Trust Agreement and
the Indenture (including its obligations to pay
costs, expenses, debts and other liabilities of
the Issuer Trust (other than with respect to the
Trust Securities)), provides a full and
unconditional guarantee on a subordinated basis by
the Company of amounts due on the Capital
Securities.
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<PAGE> 15
Ranking.................... The Common Securities rank pari passu with, and
payments thereon will be made pro rata with, the
Capital Securities, except that upon the
occurrence and continuation of a Trust Agreement
Event of Default, the rights of the holders of the
Common Securities to receive payment 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 New Capital
Securities -- General." The Subordinated
Debentures are unsecured and subordinate and
junior in right of payment to the extent and in
the manner set forth in the Indenture to all
Senior Indebtedness of the Company. See
"Description of the New Junior Subordinated
Debentures." The Guarantee will constitute an
unsecured obligation of the Company and will rank
subordinate and junior in right of payment to the
extent and in the manner set forth in the
Guarantee to all Senior Indebtedness of the
Company. The Company's obligations under the
Guarantee and the Subordinated Debentures are also
effectively subordinate to claims of creditors of
the Company's subsidiaries. See "Description of
the Guarantee."
Voting Rights.............. Holders of the Capital Securities have limited
voting rights relating generally to the
modification of the Capital Securities and the
Guarantee and the exercise of the Issuer Trust's
rights as the holder of the Subordinated
Debentures. Holders of the Capital Securities are
not entitled to appoint, remove or replace the
Property Trustee or the Delaware Trustee except
upon the occurrence of an Indenture Event of
Default (as defined herein) described herein. See
"Description of the New Capital
Securities -- Voting Rights, Amendment of Trust
Agreement" and "-- Removal of Issuer Trustees;
Appointment of Successors."
Rating..................... The New Capital Securities will not be rated by
Standard & Poor's Ratings Services ("S&P") or
Moody's Investors Service, Inc. ("Moody's") or any
similar rating agency.
Transfer Restrictions...... The Old Capital Securities were, and the New
Capital Securities will be, issued and may be
transferred only in blocks having a liquidation
amount of not less than $100,000 (100 Old Capital
Securities or New Capital Securities, as the case
may be). Any such transfer of the Old Capital
Securities or the New Capital Securities in a
block having a liquidation amount of less than
$100,000 shall be deemed to be void and of no
legal effect whatsoever. See "Description of the
New Capital Securities -- Restrictions on
Transfer."
Subordinated Debentures.... The Issuer Trust invested the proceeds from the
issuance of the Old Capital Securities and Common
Securities in an equivalent amount of Old Junior
Subordinated Debentures of the Company, up to
$20,000,000 aggregate principal amount of which
will be exchanged for New Junior Subordinated
Debentures. The Subordinated Debentures mature on
June 1, 2027. The Subordinated Debentures rank
subordinate and junior in right of payment to all
Senior Indebtedness of the Company. In addition,
the Company's obligations under the Subordinated
Debentures are effectively subordinated to all
existing and future liabilities and obligations of
its subsidiaries. See "Risk Factors -- Ranking of
Subordinate Obligations Under the Guarantee and
the
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<PAGE> 16
Subordinated Debentures", and "Description of the
New Junior Subordinated
Debentures -- Subordination."
Benefit Plan
Considerations............. Prospective purchasers must carefully consider the
restrictions on purchase set forth under "Benefit
Plan Considerations."
Form of Capital
Securities................. The Old Capital Securities initially sold to
"qualified institutional buyers" (as defined in
Rule 144A under the Securities Act) in reliance on
Rule 144A under the Securities Act are represented
by a global certificate or certificates registered
in the name of Cede & Co., as nominee for DTC. The
Old Capital Securities initially sold to
institutional "accredited investors" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) were issued only in fully
registered, certificated form. Beneficial
interests in the New Capital Securities
represented by a global certificate or
certificates will be evidenced by, and transfers
thereof will be effected only through, records
maintained by the participants in DTC. Except in
the limited circumstances described herein, the
New Capital Securities in certificated form will
not be issued in exchange for the global
certificate or certificates. See "Description of
the New Capital Securities -- Book-Entry Only
Issuance -- The Depository Trust Company."
For additional information with respect to the New Capital Securities, see
"Description of the New Capital Securities," "Description of the New Junior
Subordinated Debentures," "Description of the Guarantee" and "United States
Federal Income Taxation."
RISK FACTORS
Prospective investors should carefully consider the matters set forth under
"Risk Factors."
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<PAGE> 17
RISK FACTORS
Prior to deciding whether to participate in the Exchange Offer, holders of
Old Capital Securities should carefully review the information contained
elsewhere, or incorporated by reference, in this Prospectus and should
particularly consider the following matters:
ABSENCE OF PUBLIC TRADING MARKET
The Old Capital Securities were issued to, and the Company believes are
currently owned by, a relatively small number of beneficial owners. The Old
Capital Securities have not been registered under the Securities Act and will be
subject to restrictions on transferability to the extent that they are not
exchanged for the New Capital Securities. Although the New Capital Securities
will generally be permitted to be resold or otherwise transferred by the holders
(who are not affiliates of the Company or the Issuer Trust) without compliance
with the registration requirements under the Securities Act, they will
constitute a new issue of securities with no established trading market. Capital
Securities may be transferred by the holders thereof only in blocks having a
liquidation amount of not less than $100,000 (100 Capital Securities). The
Company and the Issuer Trust have been advised by the Initial Purchaser that the
Initial Purchaser presently intends to make a market in the New Capital
Securities. However, the Initial Purchaser is not obligated to do so and any
market-making activity with respect to the New Capital Securities may be
discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act and may be limited during the Exchange Offer. Accordingly, no
assurance can be given that an active public or other market will develop for
the New Capital Securities or the Old Capital Securities or as to the liquidity
of or the trading market for the New Capital Securities or the Old Capital
Securities. If an active public market does not develop, the market price and
liquidity of the New Capital Securities may be adversely affected.
If a public trading market for the New Capital Securities develops, future
trading prices of such securities will depend on many factors, including, among
other things, prevailing interest rates, the Company's results of operations and
the market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Company, the New Capital Securities may trade at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Company or the Issuer Trust may publicly offer for sale
or resell the New Capital Securities only in compliance with the provisions of
Rule 144 under the Securities Act.
Each broker-dealer that receives New Capital Securities for its own account
in exchange for Old Capital Securities, where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Capital Securities. See "Plan of
Distribution."
STATUS OF THE COMPANY AS A BANK HOLDING COMPANY
The Company is a legal entity separate and distinct from the Bank, although
the principal source of the Company's cash revenues is dividends from the Bank.
The right of the Company to participate in the assets of any subsidiary upon the
latter's liquidation, reorganization or otherwise (and thus the ability of the
holders of Capital Securities to benefit indirectly from any such distribution)
will be subject to the claims of the subsidiary's creditors, which will take
priority except to the extent that the Company may itself be a creditor with a
recognized claim. As of June 30, 1997, the Company's subsidiaries had
indebtedness and other liabilities of approximately $936 million.
Payment of dividends by the Bank is restricted by various legal and
regulatory limitations. At June 30, 1997, approximately $27 million was
available for payment of dividends to the Company from the Bank without prior
regulatory approval.
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<PAGE> 18
The Bank is also subject to restrictions under federal law which limit the
transfer of funds by the Bank to the Company, whether in the form of loans,
extensions of credit, investments, asset purchases or otherwise. Such transfers
by the Bank to the Company are limited in amount to 10% of the Bank's capital
and surplus and, with respect to the Company and any other affiliates, to an
aggregate of 20% of the Bank's capital and surplus. Furthermore, such loans and
extensions of credit are required to be secured in specified amounts.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBENTURES
The obligations of the Company under the Guarantee and the Subordinated
Debentures are subordinate and junior in right of payment to all present and
future Senior Indebtedness of the Company. No payment of principal of (including
redemption payments, if any) or interest on the Subordinated Debentures may be
made if (i) any Senior Indebtedness of the Company is not paid when due and any
applicable grace period with respect to such default has ended with such default
not having been cured or waived or ceasing to exist or (ii) the maturity of any
Senior Indebtedness of the Company has been accelerated because of a default. As
of June 30, 1997, the Company had $5.0 million of Senior Indebtedness. There are
no terms in the Capital Securities, the Subordinated Debentures or the Guarantee
that limit the ability of the Company or its subsidiaries to incur additional
indebtedness, liabilities and obligations, including such indebtedness that
ranks senior to the Subordinated Debentures and the Guarantee. See "Description
of the Guarantee -- Status of the Guarantee" and "Description of the New Junior
Subordinated Debentures."
Because the Company is a bank holding company, the Subordinated Debentures
and the Guarantee are effectively subordinated to all existing and future
liabilities, including trade payables, of the Company's subsidiaries, except to
the extent that the Company is a creditor of the subsidiaries recognized as
such. There are also various legal limitations on the extent to which the
Company's Banking Subsidiaries may extend credit, pay dividends or otherwise
supply funds to the Company or various of its affiliates.
RIGHTS UNDER THE GUARANTEE
The terms of the Guarantee will be those set forth in the Guarantee and
those made part of the Guarantee by the Trust Indenture Act of 1939 (the "Trust
Indenture Act"), under which Bankers Trust Company will act as the trustee (the
"Guarantee Trustee"). The Guarantee Trustee will hold the Guarantee for the
benefit of the holders of the Capital Securities. Bankers Trust Company will
also act as Debenture Trustee (the "Debenture Trustee") for the Subordinated
Debentures under the Indenture and as Property Trustee under the Trust
Agreement. Bankers Trust (Delaware) will act as Delaware Trustee under the Trust
Agreement. The Guarantee guarantees to the holders of the Capital Securities the
following payments, to the extent not paid by or on behalf of the Issuer Trust:
(i) any accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Issuer Trust has funds on hand available
therefor at such time; (ii) the Redemption Price (as defined in "Description of
Capital Securities -- Redemption") with respect to any Capital Securities called
for redemption, to the extent that the Issuer Trust has funds on hand available
therefor at such time; and (iii) upon a voluntary or involuntary dissolution of
the Issuer Trust (unless the Subordinated Debentures are distributed to holders
of the Capital Securities), the lesser of (a) the aggregate of the Liquidation
Amount and all accumulated and unpaid Distributions to the date of payment, to
the extent that the Issuer Trust has funds on hand available therefor at such
time, and (b) the amount of assets of the Issuer Trust remaining available for
distribution to holders of the Capital Securities on liquidation of the Issuer
Trust. The Guarantee is subordinated as described under "-- Ranking of
Subordinated Obligations Under the Guarantee and the Subordinated Debentures"
and "Description of Guarantee -- Status of the Guarantee." The holders of not
less than a majority in aggregate Liquidation Amount of the outstanding Capital
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee under the Guarantee. Any holder of the Capital Securities may
institute a legal proceeding directly against the Company to enforce its rights
under the Guarantee without first instituting a legal proceeding against the
Issuer Trust, the Guarantee Trustee or any other person or entity.
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<PAGE> 19
If the Company were to default on its obligation to pay amounts payable
under the Subordinated Debentures, the Issuer Trust may lack funds for the
payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital Securities
would not be able to rely upon the Guarantee for payment of such amounts.
Instead, if a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay any amounts payable
in respect of the Subordinated Debentures on the payment date on which such
payment is due and payable, then a holder of Capital Securities may institute a
legal proceeding directly against the Company for enforcement of payment to such
holder of any amounts payable in respect of such Subordinated Debentures having
a principal amount equal to the aggregate Liquidation Amount of the Capital
Securities of such holder (a "Direct Action"). In connection with such Direct
Action, the Company will have a right of set-off under the Indenture to the
extent of any payment made by the Company to such holder of Capital Securities
in the Direct Action. Except as described herein, holders of Capital Securities
will not be able to exercise directly any other remedy available to the holders
of the Subordinated Debentures or assert directly any other rights in respect of
the Subordinated Debentures. See "Description of New Junior Subordinated
Debentures -- Enforcement of Certain Rights by Holders of Capital Securities,"
"-- Debenture Events of Default" and "Description of Guarantee." The Trust
Agreement provides that each holder of Capital Securities by acceptance thereof
agrees to the provisions of the Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities will have limited voting rights relating
generally to the modification of the Capital Securities and the Guarantee and
the exercise of the Issuer Trust's rights as holder of Subordinated Debentures.
Holders of Capital Securities will not be entitled to appoint, remove or replace
the Property Trustee or the Delaware Trustee except upon the occurrence of
certain events specified in the Trust Agreement and described herein. The
Property Trustee and the holders of all the Common Securities may, subject to
certain conditions, amend the Trust Agreement without the consent of holders of
Capital Securities to cure any ambiguity or make other provisions not
inconsistent with the Trust Agreement or to ensure that the Issuer Trust (i)
will not be taxable as a corporation for United States federal income tax
purposes, or (ii) will not be required to register as an "investment company"
under the Investment Company Act. See "Description of the New Capital
Securities -- Voting Rights; Amendment of Trust Agreement" and "-- Removal of
Issuer Trustees; Appointment of Successors."
MARKET PRICES
There can be no assurance as to the market prices for Capital Securities,
or the market prices for Subordinated Debentures that may be distributed in
exchange for Capital Securities if a liquidation of the Issuer Trust occurs.
Accordingly, the Capital Securities or the Subordinated Debentures that a holder
of Capital Securities may receive on liquidation of the Issuer Trust may trade
at a discount to the price that the investor paid to purchase the Old Capital
Securities which are being exchanged hereby. Because holders of Capital
Securities may receive Subordinated Debentures on termination of the Issuer
Trust, purchasers electing to exchange their Old Capital Securities are also
making an investment decision with regard to the Subordinated Debentures and
should carefully review all the information regarding the Subordinated
Debentures contained herein. See "Description of the New Junior Subordinated
Debentures."
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF THE CAPITAL SECURITIES
If a Trust Agreement Event of Default with respect to the Issuer Trust
occurs and is continuing, then the holders of the Capital Securities would,
except as provided below, rely on the enforcement by the Property Trustee of its
rights as holder of the Subordinated Debentures against the Company. The holders
of a majority in liquidation amount of the Capital Securities will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee with respect to the Capital Securities
or to direct the exercise of any trust or power conferred upon the Property
Trustee under the Trust Agreement, including the right to direct the Property
Trustee to exercise the remedies available to it as holder of the Subordinated
Debentures. If the Property Trustee fails to enforce its rights under the
Subordinated
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<PAGE> 20
Debentures after the holders of a majority in liquidation amount of the Capital
Securities have so directed the Property Trustee, a holder of record of the
Capital Securities may, to the fullest extent permitted by law, institute a
legal proceeding directly against the Company to enforce the rights of the
Property Trustee under the Subordinated Debentures, without first instituting
any legal proceeding against such Property Trustee or any other person.
Notwithstanding the foregoing, if a Trust Agreement 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 Subordinated Debentures on the
respective dates such interest or principal is payable, after giving effect to
any Extension Period (or in the case of redemption, on the redemption date),
then a holder of record of the Capital Securities may institute directly against
the Company a proceeding for enforcement of payment, on or after the respective
due dates specified in the Subordinated Debentures, to such holder directly of
the principal of or interest on the Subordinated Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such holder (a "Direct Action"). In connection with such Direct
Action, the Company will be subrogated to the rights of such holder of the
Capital Securities under the Trust Agreement to the extent of any payment made
by the Company to such holder of the Capital Securities in such Direct Action;
provided, however, that no such subrogation right may be exercised so long as a
Trust Agreement Event of Default has occurred and is continuing. The holders of
the Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Debentures. See "Description of the
New Capital Securities -- Events of Default; Notice."
OPTION TO EXTEND INTEREST PAYMENT PERIOD FOR UP TO FIVE YEARS AND CONSEQUENT
DEFERRAL OF DISTRIBUTIONS ON THE CAPITAL SECURITIES
The Company has the right under the Indenture to defer payments of interest
on the Subordinated Debentures by extending the interest payment period, at any
time and from time to time, subject to certain conditions, for Extension
Periods, each not exceeding 10 consecutive semi-annual periods, provided that no
Extension Period may extend beyond the stated maturity of the Subordinated
Debentures. During each such Extension Period, distributions on the Capital
Securities would also be deferred (but would continue to accrue at an annual
rate of 9.375%, despite such deferral, with interest thereon compounded
semi-annually to the fullest extent permitted by law) by the Issuer Trust. In
the event that the Company exercises this right to defer interest payments on
the Subordinated Debentures, and such deferral is continuing, or if there shall
have occurred and be continuing any Indenture Event of Default or if the Company
shall be in default with respect to the payment of its obligations under the
Guarantee, (a) the Company shall not declare or pay dividends on, or make a
distribution with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (other
than (i) purchases or acquisitions of shares of any such capital stock or rights
to acquire such capital stock in connection with the satisfaction by the Company
of its obligations under any employee benefit plans, (ii) as a result of a
reclassification of the Company's capital stock or rights to acquire such
capital stock or the exchange or conversion of one class or series of capital
stock of the Company or rights to acquire such capital stock for another class
or series of the Company's capital stock or rights to acquire such capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) dividends and
distributions made on the Company's capital stock or rights to acquire such
capital stock with the Company's capital stock or rights to acquire such capital
stock, or (v) any declaration of a dividend in connection with the
implementation of a shareholder 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), or make guarantee payments (other than payments under the
Guarantee) in respect of the foregoing; and (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company that rank pari passu with or
junior to the Subordinated Debentures. Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period,
provided that each such Extension Period, together with all such previous and
further extensions thereof, may not exceed 10 consecutive semi-annual periods or
extend beyond the maturity of the Subordinated Debentures. Upon the termination
of any Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the terms set forth
17
<PAGE> 21
herein. See "Description of the New Capital Securities" and "Description of the
New Junior Subordinated Debentures."
During each Extension Period, if any, each holder of the Capital Securities
will continue to accrue income (as original issue discount ("OID")) in respect
of the deferred interest allocable to its Capital Securities for United States
federal income tax purposes, which will be allocated but not distributed. In
such event, each holder of the Capital Securities will recognize income for
United States federal income tax purposes in advance of the receipt of cash, and
will not receive cash related to such income from the Issuer Trust if such
holder disposes of its Capital Securities prior to the record date for payment
of such deferred interest. See "United States Federal Income Taxation -- US
Holders -- Interest Income and Original Issue Discount."
The Company has no current intention of exercising its right to defer
payments of interest on the Subordinated Debentures. However, should the Company
determine to exercise such right in the future, the market price of the Capital
Securities is likely to be affected. Accordingly, a holder that disposes of its
Capital Securities during an Extension Period, therefore, might not receive the
same return on its investment as a holder that continues to hold its Capital
Securities. In addition, as a result of the existence of the Company's right to
defer interest payments, the market price of the Capital Securities (which
represent undivided beneficial interests in the Subordinated Debentures) may be
more volatile than the market price of other similar securities where the issuer
does not have such right to defer interest payments.
TAX EVENT, INVESTMENT COMPANY EVENT OR CAPITAL TREATMENT EVENT REDEMPTION;
PROPOSED TAX LAW CHANGES
Upon the occurrence and during the continuation of a Tax Event, Investment
Company Event or Capital Treatment Event, the Company has the right to redeem
the Subordinated Debentures in whole, but not in part, at any time within 90
days following the occurrence of such Tax Event, Investment Company Event or
Capital Treatment Event and thereby cause a mandatory redemption of the Capital
Securities and Common Securities. Any such redemption shall be at a price equal
to the liquidation amount of the Capital Securities and Common Securities,
respectively, together with accumulated Distributions to but excluding the date
fixed for redemption. The ability of the Company to exercise its rights to
redeem the Subordinated Debentures prior to the stated maturity may be subject
to prior regulatory approval by the Federal Reserve, if then required under
applicable Federal Reserve capital guidelines or policies. See "Description of
the New Junior Subordinated Debentures -- Redemption" and "Description of
Capital Securities -- Liquidation Distribution Upon Dissolution."
A "Tax Event" means the receipt by the Issuer Trust of an opinion of
counsel to the Company experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of the Capital Securities, there is more than an insubstantial risk
that (i) the Issuer Trust is, or will be within 90 days of the delivery of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Old Junior Subordinated Debentures or New Junior
Subordinated Debentures, (ii) interest payable by the Company on the Old Junior
Subordinated Debentures or New Junior Subordinated Debentures is not, or within
90 days of the delivery of such opinion will not be, deductible by the Company,
in whole or in part, for United States federal income tax purposes or (iii) the
Issuer Trust is, or will be within 90 days of the delivery of the opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Investment Company Event" means the receipt by the Issuer Trust of an
opinion of counsel to the Company experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more
18
<PAGE> 22
than an insubstantial risk that the Issuer Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Capital Securities.
A "Capital Treatment Event" means the reasonable determination by the
Company that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, there is more than an insubstantial risk that the Company will not
be entitled to treat an amount equal to the Liquidation Amount of the Capital
Securities as "Tier 1 Capital" (or the then equivalent thereof) for purposes of
the risk-based capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company.
FUTURE CHANGES IN TAX LAW
The Company knows of no legislation actively under consideration by
Congress which could affect the Subordinated Debentures in such a manner so as
to constitute a Tax Event. It is possible, however, that Congress could pass
such legislation in the future. For instance, President Clinton's budget
proposals for fiscal year 1998 contained a provision that would generally deny
corporate issuers a deduction for interest on certain debt obligations that have
a maximum term in excess of 15 years and are not shown as indebtedness on the
separate balance sheet of the issuer, or, where the instrument is issued to a
related party (other than a corporation), where the holder or some other related
party issues a related instrument that is not shown as indebtedness on the
issuer's consolidated balance sheet. This proposal was not enacted. There can be
no assurance, however, that a similar proposal will not be enacted in the future
and, if enacted, that it will not be enacted with retroactive effect with
respect to the Subordinated Debentures. Accordingly, there can be no assurance
that a Tax Event will not occur.
REDEMPTION; DISTRIBUTION
The Company, as the holder of all of the outstanding Common Securities, has
the right at any time (including, without limitation, upon the occurrence of a
Tax Event, a Capital Treatment Event or an Investment Company Event) to dissolve
the Issuer Trust, and, after satisfaction of liabilities to creditors of the
Issuer Trust (to the extent not paid by the Company), cause the Subordinated
Debentures to be distributed to the holders of the Trust Securities on a pro
rata basis in accordance with the respective liquidation amounts thereof, in
liquidation of the Issuer Trust. See "Description of the New Capital
Securities -- Liquidation Distribution Upon Dissolution." In certain
circumstances described herein, the Company will have the right to redeem the
Subordinated Debentures, in whole or in part, in which event the Issuer Trust
will redeem the Trust Securities having an aggregate liquidation amount equal to
the aggregate principal amount of the Subordinated Debentures redeemed by the
Company on a pro rata basis. The exercise of such rights is subject to the
Company having received prior approval from the Federal Reserve, if then
required under applicable capital guidelines or policies of the Federal Reserve.
See "Description of the New Capital Securities -- Redemption" and
"-- Liquidation Distribution Upon Dissolution."
Under current United States federal income tax law, a distribution of the
Subordinated Debentures upon the dissolution of the Issuer Trust generally would
not be a taxable event to holders of the Capital Securities. However, a
dissolution of the Issuer Trust in which holders of the Capital Securities
receive cash would be a taxable event to such holders. See "United States
Federal Income Taxation -- US Holders -- Receipt of Subordinated Debentures or
Cash Upon Liquidation of the Issuer Trust."
There can be no assurance as to the market prices for the Capital
Securities or the Subordinated Debentures that may be distributed in exchange
for the Capital Securities if a dissolution and liquidation of the Trust were to
occur. Accordingly, the Capital Securities that an investor may receive pursuant
to the Exchange Offer, or in a secondary purchase, or the Subordinated
Debentures that a holder of the Capital
19
<PAGE> 23
Securities may receive on dissolution and liquidation of the Issuer Trust, may
trade at a discount to the price paid to purchase such Capital Securities.
Because the ability of the Issuer Trust to pay amounts due on the Capital
Securities is wholly dependent upon the Company's making payments on the
Subordinated Debentures as and when required, and because holders of the Capital
Securities may receive the Subordinated Debentures upon dissolution and
liquidation of the Issuer Trust, purchasers electing to exchange their Old
Capital Securities for New Capital Securities are also making an investment
decision with regard to the Subordinated Debentures and should carefully review
all the information regarding the Subordinated Debentures contained herein and
evaluate the credit risk of the Company. See "Description of the New Capital
Securities" and "Description of the New Junior Subordinated Debentures."
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
The Indenture does not contain any provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction, including a change of control, or other similar transactions
involving the Company that may adversely affect such holders. See "Description
of the New Junior Subordinated Debentures."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of
the Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to limited
exceptions, if applicable). The Company and the Issuer Trust do not intend to
register under the Securities Act any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer (subject to limited
exceptions, if applicable).
To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. In addition, although the Old Capital Securities
have been designated for trading in the Private Offerings, Resale and Trading
through Automatic Linkages ("PORTAL") market, to the extent that Old Capital
Securities are tendered and accepted in connection with the Exchange Offer, any
trading market for Old Capital Securities which remain outstanding after the
Exchange Offer could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will constitute a single
series of Capital Securities under the Trust Agreement and, accordingly, will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding liquidation amount thereof have taken
certain actions or exercised certain rights under the Trust Agreement. See
"Description of the New Capital Securities -- General."
EXCHANGE OFFER PROCEDURES
Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Exchange Agent of such Old Capital Securities, a properly
completed and duly executed Letter of Transmittal and all other required
documents. Therefore, holders of the Old Capital Securities desiring to tender
such Old Capital Securities in exchange for New Capital Securities should allow
sufficient time to ensure timely delivery. The Trust is under no duty to give
notification of defects or irregularities with respect to the tenders of Old
Capital Securities for exchange.
20
<PAGE> 24
GROWTH
The Company has grown and may seek to grow by acquiring other financial
institutions and branches. However, competition for acquisitions in the
Company's market area is highly competitive. Moreover, any acquisitions will be
subject to regulatory approval and there can be no assurance that the Company
will obtain such approvals. The Company may not be as successful in the future
as it has been in the past in identifying further acquisition candidates,
integrating acquired institutions or preventing deposit erosion at acquired
institutions or branches. Furthermore, the Company's ability to grow through
acquisitions will depend on its maintaining sufficient regulatory capital levels
and on economic conditions.
COMPETITION
The banking business is highly competitive. In its primary market areas,
the Bank competes with other commercial banks, savings and loan associations,
credit unions, finance companies, mutual funds, insurance companies, and
brokerage and investment banking firms operating locally and elsewhere. The
Bank's primary competitors have substantially greater resources and lending
limits than the Bank and may offer certain services, such as trust services,
that the Bank does not provide at this time. The profitability of the Company
depends upon the Bank's ability to continue to compete in its primary market
areas.
DEVELOPMENTS IN TECHNOLOGY
The market for financial services, including banking services, is
increasingly affected by advances in technology, including developments in
telecommunications, data processing, computers, automation, Internet-based
banking, telebanking, debit cards and so-called "smart" cards. The ability of
the Company to compete successfully in its markets may depend on the extent to
which it is able to implement and exploit such technological changes. However,
there can be no assurance that the development of these or any other new
technologies, or the Company's success or failure in anticipating or responding
to such developments, will materially affect the Company's business, financial
condition and operating results.
21
<PAGE> 25
TRIANGLE BANCORP, INC.
GENERAL
The Company is a registered bank holding company, chartered under the laws
of North Carolina, and headquartered in Raleigh, North Carolina, with banking
offices located in various communities in North Carolina. At June 30, 1997, the
Company had total consolidated assets of approximately $1.03 billion, total
consolidated deposits of approximately $852 million and total consolidated
shareholders' equity of approximately $92 million.
The Company operates primarily through the Bank, a North Carolina chartered
commercial bank that began operations on January 4, 1988. The Bank provides a
wide variety of retail and commercial banking products and services, but has
focused on lending to small- and medium-sized businesses and to individuals
located in the communities it serves.
Since 1991, the Company has experienced significant growth, both internally
and through acquisitions of unaffiliated institutions, increasing in size from
four branch offices and approximately $85 million in total assets in December
1990, to 46 branch offices and approximately $1.0 billion in total assets at
year-end 1996. During this time period, the Company acquired a total of
approximately $700 million in assets and 34 branch offices (net of certain sales
to rationalize the branch system) in ten transactions involving the acquisition
of whole institutions or the purchase of various branch offices. As described
further under "-- Recent Acquisitions," the Company recently completed the
acquisition of a bank in Charlotte, North Carolina, and the acquisition of ten
branch offices from Branch Banking & Trust Company and United Carolina Bank.
While the Company has significantly expanded its branch system, it has
emphasized integrating the acquired operations in a manner that maintains credit
quality and promotes operational efficiency. At June 30, 1997, the Company had
nonperforming assets of $6.2 million, or .88% of gross loans and other real
estate owned. Net charge-offs for 1996 were 0.16% of average loans. Net
charge-offs for the first half of 1997 were 0.01% of average loans. The
allowance for loan losses at June 30, 1997 was 1.54% of gross loans and 175.58%
of nonperforming loans. The efficiency ratios of the Company for the 1996 fiscal
year and for the first half of 1997 were 60% and 51%, respectively. The
Company's returns on average assets and average equity for the 1996 fiscal year
and the first half of 1997 (annualized) were 1.22% and 1.56% and 13.63% and
17.64%, respectively.
The Company's strategy includes continuing to (i) develop its branch system
through acquisitions and de novo branch openings, including supermarket
branches, (ii) provide personalized, community-oriented banking services with a
focus on lending to small- and medium-sized businesses and to individuals within
the communities in which it operates and (iii) maintain its credit quality and
operational efficiency.
The Company continually evaluates business combination opportunities. As a
result, business combination discussions and, in some cases, negotiations
frequently take place and future business combinations involving cash, debt or
equity securities can be expected. Any future business combination or series of
business combinations that the Company may undertake may be material, in terms
of assets acquired or liabilities assumed to the Company's financial condition.
The Company was organized under the laws of the State of North Carolina on
November 27, 1991, for the purposes of acquiring the Bank, which acquisition was
completed in August 1992. The Company's principal executive offices are located
at 4300 Glenwood Avenue, Raleigh, North Carolina 27612, and its telephone number
at such address is (919) 881-0455.
For additional information regarding the Company's financial condition and
results of operations, see "Selected Consolidated Financial Data and Other
Information."
RECENT ACQUISITIONS
On October 2, 1997, the Company consummated a merger with Bank of
Mecklenburg, Charlotte, North Carolina ("Mecklenburg"), pursuant to which the
Company acquired all of the outstanding shares of
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<PAGE> 26
Mecklenburg by exchanging one share of the Company's common stock for each
outstanding share of Mecklenburg's common stock. The Company currently is
operating Mecklenburg as a wholly-owned subsidiary of the Company. As of June
30, 1997, Mecklenburg had approximately $197 million in deposit liabilities,
$134 million in loans and $306 million in total assets and operated three
branches in Charlotte, North Carolina. This acquisition will be accounted for as
a pooling of interests.
On August 15, 1997, the Bank acquired ten branch offices from Branch
Banking & Trust Company and United Carolina Bank which were being divested in
connection with the merger of these two companies. The ten branches are located
in the North Carolina counties of Duplin, Lee, Richmond, Robeson, Washington and
Wayne. In the transaction, the Bank assumed approximately $195 million in
deposits and approximately $62 million aggregate principal amount in loans
associated with the ten branches. The Bank paid a premium of approximately $15.8
million for the assumption of the deposits. This branch purchase will be
accounted for as a purchase.
If the Recent Acquisitions had been consummated on June 30, 1997, the
Company's total consolidated assets would have increased by approximately $501
million, to approximately $1.53 billion; its total consolidated deposits would
have increased by approximately $392 million to approximately $1.24 billion; its
total consolidated liabilities would have increased by approximately $481
million to approximately $1.42 billion; and its total consolidated shareholders'
equity would have increased by approximately $20 million to approximately $112
million.
PENDING LITIGATION
The Bank has been named as a defendant in a lender liability suit currently
pending in state court in North Carolina in which the plaintiff claims that the
Bank breached an oral commitment to make a $100,000 loan to plaintiff. The
plaintiff is asserting that he is entitled to $5 million in damages and is
seeking to have these damages trebled and an award of attorneys fees. This suit
is scheduled to go to trial in November 1997. The Bank disputes the plaintiff's
theories of liability and damages and intends to continue to defend the suit
vigorously.
NEITHER THE CAPITAL SECURITIES NOR THE SUBORDINATED DEBENTURES ARE
OBLIGATIONS OF OR GUARANTEED BY THE BANK.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following unaudited table presents the consolidated ratios of earnings
to fixed charges of the Company. The consolidated ratio of earnings to fixed
charges has been computed by dividing income before income taxes and fixed
charges by fixed charges. Fixed charges represent all interest expense (ratios
are presented both excluding and including interest on deposits). Interest
expense (other than on deposits) includes interest on borrowed funds, federal
funds purchased and securities sold under agreements to repurchase, and other
funds borrowed.
<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>
Earnings to Fixed Charges:
Excluding Interest on Deposits...... 11.83x 8.78x 10.34x 9.15x 4.98x 7.66x 7.13x
Including Interest on Deposits...... 1.69 1.55 1.54 1.44 1.32 1.35 1.25
</TABLE>
23
<PAGE> 27
SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER INFORMATION
Presented below is selected consolidated financial information for the
Company for the periods specified. The consolidated financial information is not
necessarily indicative of the results for any future period and is qualified in
its entirety, and should be read in conjunction with, the Company's consolidated
financial statements, including the notes thereto, and other detailed financial
information included in the documents incorporated by reference in this
Prospectus. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
AS OF AND FOR
THE SIX MONTHS ENDED
JUNE 30, AS OF AND FOR THE YEAR ENDED DECEMBER 31,
--------------------- ----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA
Loans....................... $ 698,906 $625,175 $639,718 $559,707 $467,842 $395,398 $274,895
Securities Available for
Sale...................... 140,214 145,653 146,086 127,904 102,427 -- --
Securities Held to
Maturity.................. 103,526 81,617 97,112 76,285 75,899 173,198 127,951
Total Assets................ 1,027,208 940,613 971,105 853,926 742,438 681,131 470,615
Total Deposits.............. 852,346 809,446 847,764 714,590 636,276 583,571 407,890
Advances from the Federal
Home Loan Bank............ 30,000 23,500 10,000 19,500 10,500 5,500 --
Corporation-Obligated
Mandatorily Redeemable
Capital Securities........ 19,950 -- -- -- -- -- --
Subordinated Debentures..... -- -- -- -- 2,000 6,720 2,000
Shareholders' Equity........ 91,642 81,796 86,896 79,407 68,306 65,304 50,487
SELECTED RESULTS OF
OPERATION
Net Interest Income......... 21,666 19,318 40,256 35,101 30,601 21,213 18,990
Provision for Loan Losses... 1,330 1,035 2,100 428 1,250 2,147 1,905
Noninterest Income.......... 6,101 4,576 8,494 8,066 5,758 6,278 4,558
Noninterest Expense......... 14,151 14,243 29,169 30,719 25,719 20,492 18,035
Net Income.................. 7,751 5,448 11,301 7,858 4,182 3,855 3,122
Per Share Data
Primary Earnings Per
Share................... 0.72 0.51 1.05 0.74 0.41 0.47 0.38
Fully Diluted Earnings Per
Share................... 0.71 0.51 1.04 0.73 0.41 0.47 0.38
Book Value................ 8.75 7.84 8.30 7.62 6.70 6.62 6.27
Cash Dividends............ $ 0.21 $ 0.15 $ 0.31 $ 0.17 $ 0.07 $ 0.02 $ 0.01
SELECTED RATIOS
Return on Average
Assets.................. 1.56%(1) 1.23%(1) 1.22% 1.00% 0.60% 0.78% 0.69%
Return on Average
Equity.................. 17.64(1) 13.51(1) 13.63 10.63 6.21 7.25 6.33
Shareholders' Equity to
Total Assets............ 8.92(1) 8.70(1) 8.95 9.30 9.20 9.59 10.73
ASSET QUALITY RATIOS
Non-performing Loans and
Other Real Estate Owned
to Total Gross Loans.... 0.88 0.54 0.66 0.54 0.75 1.45 1.62
Net Charge-offs to Average
Loans................... 0.01 0.03 0.16 0.20 0.68 0.27 0.63
Total Allowance for Loan
Losses to Total Non-
performing Loans........ 175.58% 276.70% 257.49% 338.60% 334.82% 268.17% 257.28%
</TABLE>
- - ---------------
(1) Annualized
24
<PAGE> 28
SUPPLEMENTAL SELECTED CONSOLIDATED FINANCIAL DATA AND
OTHER INFORMATION
Presented below is supplemental selected consolidated financial information
for the Company for the periods presented, giving retroactive effect to the
acquisition of Mecklenburg by the Company on October 2, 1997. The supplemental
consolidated financial information is not necessarily indicative of the results
for any future period and is qualified in its entirety, and should be read in
conjunction with, the Company's supplemental consolidated financial statements,
including the notes thereto, and other detailed financial information included
in the documents incorporated by reference in this Prospectus. See
"Incorporation of Certain Documents by Reference".
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, AS OF AND FOR THE YEAR ENDED DECEMBER 31,
--------------------- ----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA
Loans....................... $ 833,060 $714,397 $752,399 $639,557 $526,104 $449,738 $322,164
Securities Available for
Sale...................... 232,574 298,255 286,510 216,523 156,745 0 0
Securities Held to
Maturity.................. 104,526 81,617 98,112 89,452 86,427 213,371 160,195
Trading Assets.............. 53,440 0 0 0 0 0 0
Total Assets................ 1,332,846 1,200,940 1,241,394 1,054,157 877,983 791,900 560,500
Total Deposits.............. 1,049,184 986,607 1,025,752 844,878 737,388 674,302 478,926
Advances from the Federal
Home Loan Bank............ 55,000 63,500 58,000 59,500 20,500 5,500 0
Subordinated Debt........... 0 0 0 0 2,000 6,700 2,000
Corporation-Obligated
Mandatorily Redeemable
Capital Securities........ 19,950 0 0 0 0 0 0
Shareholders' Equity........ 111,551 99,956 105,736 96,870 82,887 80,360 64,863
SELECTED RESULTS OF
OPERATION
Net Interest Income......... 24,437 21,912 45,637 39,456 34,411 24,407 21,580
Provision for Loan Losses... 1,479 1,154 2,330 523 1,299 2,272 2,120
Noninterest Income.......... 7,197 5,577 9,902 8,445 5,856 6,438 4,649
Noninterest Expense......... 15,935 16,080 32,721 33,602 31,123 22,753 20,111
Net Income.................. 8,914 6,634 13,220 9,114 5,184 4,535 3,466
Per Share Data
Primary Earnings Per
Share................... 0.68 0.51 1.02 0.72 0.42 0.44 0.34
Fully Diluted Earnings Per
Share................... 0.67 0.51 1.01 0.71 0.42 0.44 0.34
Book Value................ 8.86 7.96 8.40 7.73 6.75 6.98 6.92
Cash Dividends............ 0.18 0.13 0.28 0.16 0.07 0.02 0.01
SELECTED RATIOS
Return on Average
Assets.................. 1.41% 1.16% 1.13% 0.97% 0.63% 0.77% 0.65%
Return on Average
Equity.................. 16.52 13.46 13.16 10.12 6.31 6.68 5.46%
Shareholders' Equity to
Total Assets............ 8.37 8.32 8.52 9.19 9.44 10.15 11.57%
ASSET QUALITY RATIOS
Non-performing Loans and
Other Real Estate Owned
to Total Gross Loans.... 0.74 0.47 0.82 0.47 0.65 1.31 1.47
Net Charge-offs to Average
Loans................... 0.01 0.03 0.10 0.18 0.60 0.24 0.57
Total Allowance for Loan
Losses to Total Non-
performing Loans........ 197.26% 308.79% 173.41% 315.21% 293.59% 195.27% 113.62%
</TABLE>
25
<PAGE> 29
TRIANGLE CAPITAL TRUST
The Issuer Trust is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary of
State. The Issuer Trust is governed by an Amended and Restated Trust Agreement
among the Company, as Depositor, Bankers Trust (Delaware), as Delaware Trustee,
and Bankers Trust Company, as Property Trustee. Two individuals were appointed
by the holders of the Common Securities to act as administrators with respect to
the Issuer Trust (the "Administrators"). The Company appointed two individuals
who are employees and officers of the Company to serve as the Administrators.
See "Description of the New Capital Securities -- Miscellaneous." The Issuer
Trust exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) investing the gross proceeds of such Trust Securities in the
Subordinated Debentures, (iii) effecting the Exchange Offer, including
exchanging up to $20,000,000 aggregate principal amount of the Old Junior
Subordinated Debentures for up to $20,000,000 of the New Junior Subordinated
Debentures, and (iv) engaging in only those other activities necessary,
convenient or incidental thereto (such as registering the transfer of the Trust
Securities). Accordingly, the New Junior Subordinated Debentures will be the
sole assets of the Issuer Trust, and payments under the New Junior Subordinated
Debentures will be the sole source of revenue of the Issuer Trust.
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 continuation of a Debenture Event of Default arising as a result
of any failure by the Company to pay any amounts in respect of the New Junior
Subordinated Debentures when due, the rights of the holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise will be subordinated to the rights of the holders of the
Capital Securities. See "Description of the New Capital
Securities -- Subordination of Common Securities." The Company acquired Common
Securities in an aggregate liquidation amount equal to 3% of the total capital
of the Issuer Trust. The Issuer Trust has a term of 31 years but may terminate
earlier as provided in the Trust Agreement. The address of the Delaware Trustee
is Bankers Trust (Delaware), 1001 Jefferson Street, Wilmington, Delaware 19801,
telephone number (302) 576-3301. The address of the Property Trustee, the
Guarantee Trustee and the Debenture Trustee is Banker's Trust Company, Four
Albany Street, 4th Floor, New York, New York 10006, telephone number (212)
250-2500.
ACCOUNTING TREATMENT
For financial reporting purposes, the Issuer Trust will be treated as a
subsidiary of the Company and, accordingly, the accounts of the Issuer Trust
will be included as a liability in the consolidated financial statements of the
Company. The Capital Securities will be included in the consolidated balance
sheets of the Company and appropriate disclosures about the Capital Securities,
the Guarantee and the New Junior Subordinated Debentures will be included in the
notes to the consolidated financial statements of the Company. For financial
reporting purposes, Distributions on the Capital Securities will be recorded as
interest expense in the consolidated statements of income of the Company.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Company and
the Issuer Trust entered into the Registration Rights Agreement with the Initial
Purchaser, pursuant to which the Company and the Issuer Trust agreed, among
other things, to file and to use their best efforts to cause to become effective
with the Commission a registration statement with respect to the exchange of the
Old Capital Securities for capital securities which have been registered under
the Securities Act with terms identical in all material respects to the terms of
the Old Capital Securities. A copy of the Registration Rights Agreement has been
filed as an Exhibit to the Registration Statement of which this Prospectus is a
part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Company and the Issuer Trust under the Registration Rights Agreement. The
form and terms of the New Capital Securities are the
26
<PAGE> 30
same as the form and terms of the Old Capital Securities, except that the New
Capital Securities have been registered under the Securities Act and therefore
will not be subject to certain restrictions on transfer applicable to the Old
Capital Securities and subject to certain limited exceptions specified in the
Registration Rights Agreement, will not provide for any increase in the
Distribution rate thereon.
In this regard, under certain circumstances set forth in the Registration
Rights Agreement, additional interest will accrue on the Capital Securities in
addition to the stated interest thereon. The Registration Rights Agreement
provides that the Company and the Issuer Trust shall use their respective best
efforts to (a) to cause this Registration Statement to be declared effective by
the Commission on or prior to 180 days after the date of original issuance of
the Trust Securities, (b) keep this Registration Statement effective for not
less than 30 business days (or longer if required by applicable law) after the
date notice of the Exchange Offer is made to the holders, (c) unless the
Exchange Offer will not be permitted by applicable law or Commission policy, the
Issuer Trust will commence the Exchange Offer and use its best efforts to
consummate the Exchange Offer within 30 business days after the effective date
of this Registration Statement and (d) if obligated to file the Shelf
Registration Statement (as defined in the Registration Rights Agreement), the
Company and Issuer Trust will use their best efforts to file the Shelf
Registration Statement with the Commission as promptly as practicable, but in
any event, within 45 days after such filing obligations arises and to cause the
Shelf Registration Statement to be declared effective by the Commission on or
prior to 180 days after such obligation arises.
If (a) the Company and the Issuer Trust fail to file, if appropriate, the
Shelf Registration Statement on or before the dates specified for such filing,
(b) this Registration Statement or the Shelf Registration Statement, if
applicable, are not declared effective by the Commission on or prior to the date
specified for such effectiveness (the "Effectiveness Target Date"), (c) the
Company and Issuer Trust fail to consummate the Exchange Offer within 30
business days of the Effectiveness Target Date with respect to this Registration
Statement or (d) this Registration Statement or the Shelf Registration
Statement, if applicable, is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted Securities
during the period specified in the Registration Rights Agreement (each such
event referred to in clauses (a) through (d) above, a "Registration Default"),
then liquidated damages shall accrue on the principal amount ("Additional
Interest") of the Old Junior Subordinated Debentures and, if the Exchange Offer
has been consummated, the New Junior Subordinated Debentures, and additional
distribution shall accumulate on the liquidation amount ("Additional
Distributions") of the Old Capital Securities and, if the Exchange Offer has
been consummated, the New Capital Securities, immediately following the
occurrence of such Registration Default, each at a rate of 0.25% per annum.
Notwithstanding the foregoing, neither the liquidated damages on the
Subordinated Debentures nor the additional distribution rate on the liquidation
amount of the Capital Securities may exceed in the aggregate 0.25% per annum.
Such Additional Interest and Additional Distributions shall cease to accrue and
accumulate upon the curing of the respective Registration default.
For the purposes of the preceding paragraph, "Transfer Restricted Security'
means each Old Capital Security, the Old Guarantee or Old Junior Subordinated
Debenture until (i) the date on which such Old Capital Security, the Old
Guarantee or Old Junior Subordinated Debenture has been exchanged for a New
Capital Security, New Guarantee or New Junior Subordinated Debenture in the
Exchange Offer and are thereafter freely tradable by the holder thereof (other
than an affiliate of the Company), (ii) such Old Capital Security, Old Guarantee
or Old Junior Subordinated Debenture, as the case may be, shall have ceased to
be outstanding, (iii) the date on which such Old Capital Security, Old Guarantee
or Old Junior Subordinated Debenture has been effectively registered under the
Securities Act and disposed of in accordance with this Registration Statement or
the Shelf Registration Statement, if applicable, or (iv) the date on which such
Old Capital Security, Old Guarantee or Old Junior Subordinated Debenture is
distributed to the public pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A) under the Securities Act.
The Exchange Offer is not being made to, nor will the Company or the Issuer
Trust accept tenders for exchange from, holders of Old Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of such jurisdiction.
27
<PAGE> 31
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Issuer Trust or any other person who has obtained
a properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by The Depository Trust Company
("DTC") who desires to deliver such Old Capital Securities by book-entry
transfer at DTC. Pursuant to the Exchange Offer, the Company will exchange as
soon as practicable after the date hereof, the Old Guarantee for the Guarantee
and $20 million aggregate principal amount of the Old Junior Subordinated
Debentures for a like aggregate principal amount of the New Junior Subordinated
Debentures. The Guarantee and the New Junior Subordinated Debentures have also
been registered under the Securities Act.
TERMS OF THE EXCHANGE
The Company and the Issuer Trust hereby offer, upon the terms and subject
to the conditions set forth in this Prospectus and in the accompanying Letter of
Transmittal, to exchange up to $20,000,000 aggregate liquidation amount of New
Capital Securities for a like aggregate liquidation amount of Old Capital
Securities properly tendered on or prior to the Expiration Date (as defined
below) and not properly withdrawn in accordance with the procedures described
below. The Issuer Trust will issue, promptly after the Expiration Date, an
aggregate liquidation amount of up to $20,000,000 of New Capital Securities in
exchange for a like principal amount of outstanding Old Capital Securities
tendered and accepted in connection with the Exchange Offer. Holders may tender
their Old Capital Securities in whole or in part in a liquidation amount of not
less than $100,000 or any integral multiple of $1,000 in excess thereof.
The Exchange Offer is not conditioned upon any minimum liquidation amount
of Old Capital Securities being tendered. As of the date of this Prospectus,
$20,000,000 aggregate liquidation amount of the Old Capital Securities is
outstanding. Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital Securities
which are not tendered for or are tendered but not accepted in connection with
the Exchange Offer will remain outstanding and be entitled to the benefits of
the Trust Agreement, but will not be entitled to any further registration rights
under the Registration Rights Agreement, except under limited circumstances. See
"Risk Factors -- Consequences of a Failure to Exchange Old Capital Securities."
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital Securities
will be returned, without expense, to the tendering holder thereof promptly
after the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
The Company will pay all charges and expenses, other than certain applicable
taxes described below, in connection with the Exchange Offer. See "-- Fees and
Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE ADMINISTRATORS OR TRUSTEES
OF THE ISSUER TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL
SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION
OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO
ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO
TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND
CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION
AND REQUIREMENTS.
28
<PAGE> 32
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
, 1997 unless the Exchange Offer is extended by the Company and
the Issuer Trust (in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended). The Company and the
Issuer Trust expressly reserve the right in their sole and absolute discretion,
subject to applicable law, at any time and from time to time, (i) to delay the
acceptance of the Old Capital Securities for exchange, (ii) to terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore been
accepted for exchange) if the Company and the Issuer Trust determine, in their
sole and absolute discretion, that any of the events or conditions referred to
under "-- Conditions to the Exchange Offer" have occurred or exist or have not
been satisfied, (iii) to extend the Expiration Date of the Exchange Offer and
retain all Old Capital Securities tendered pursuant to the Exchange Offer,
subject, however, to the right of holders of Old Capital Securities to withdraw
their tendered Old Capital Securities as described under "-- Withdrawal Rights,"
and (iv) to waive any condition or otherwise amend the terms of the Exchange
Offer in any respect. If the Exchange Offer is amended in a manner determined by
the Company and the Issuer Trust to constitute a material change, or if the
Company and the Issuer Trust waive a material condition of the Exchange Offer,
the Company or the Issuer Trust will promptly disclose such amendment or waiver
by means of a prospectus supplement that will be distributed to the registered
holders of the Old Capital Securities, and the Company and the Issuer Trust will
extend the Exchange Offer to the extent required by Rule 14e-1 under the
Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Company or the Issuer Trust may choose to make any
public announcement and subject to applicable law, neither the Company nor the
Issuer Trust shall have any obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a release to an
appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Company and the Issuer Trust will exchange, and will issue to the Exchange
Agent, New Capital Securities for Old Capital Securities validly tendered and
not withdrawn (pursuant to the withdrawal rights described below under
"-- Withdrawal Rights") promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC, (ii) the Letter of
Transmittal (or facsimile thereof) or an Agent's Message (as defined herein),
properly completed and duly executed, with any required signature guarantees,
and (iii) any other documents required by the Letter of Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC.
Subject to the terms and conditions of the Exchange Offer, the Company and
the Issuer Trust will be deemed to have accepted for exchange, and thereby
exchanged, Old Capital Securities validly tendered and not withdrawn as, if and
when the Company or the Issuer Trust gives oral or written notice to the
Exchange Agent of the Company's and the Issuer Trust's acceptance of such Old
Capital Securities for exchange pursuant to the Exchange Offer. The Exchange
Agent will act as agent for the Company and the Issuer Trust for the purpose of
receiving tenders of Old Capital Securities, Letters of Transmittal and related
documents, and as agent for tendering holders for the purpose of receiving Old
Capital Securities, Letters of Transmittal and related documents and
transmitting New Capital Securities to validly tendering holders. Such exchange
will be made promptly after the Expiration Date. If for any reason whatsoever,
acceptance for exchange or the exchange of any Old Capital Securities tendered
pursuant to the Exchange Offer is delayed (whether before or after the Company's
and the Issuer Trust's acceptance for exchange of Old Capital Securities) or the
29
<PAGE> 33
Company or the Issuer Trust extends the Exchange Offer or is unable to accept
for exchange or exchange Old Capital Securities tendered pursuant to the
Exchange Offer, then, without prejudice to the Company's or the Issuer Trust's
rights set forth herein, the Exchange Agent may, nevertheless, on behalf of the
Company and the Issuer Trust and subject to Rule 14e-1(c) under the Exchange
Act, retain tendered Old Capital Securities and such Old Capital Securities may
not be withdrawn except to the extent tendering holders are entitled to
withdrawal rights as described below under "-- Withdrawal Rights."
Pursuant to the Letter of Transmittal, a holder of Old Capital Securities
will warrant and agree in the Letter of Transmittal that it has full power and
authority to tender, exchange, sell, assign and transfer Old Capital Securities,
that the Issuer Trust will acquire good, marketable and unencumbered title to
the tendered Old Capital Securities, free and clear of all liens, restrictions,
charges and encumbrances, and the Old Capital Securities tendered for exchange
are not subject to any adverse claims or proxies. The holder also will warrant
and agree that it will, upon request, execute and deliver any additional
documents deemed by the Company, the Issuer Trust or the Exchange Agent to be
necessary or desirable to complete the exchange, sale, assignment, and transfer
of the Old Capital Securities tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) or an
Agent's Message (as defined herein), with any required signature guarantees and
any other required documents, must be received by the Exchange Agent at its
address set forth below under "-- Exchange Agent," and either (i) tendered Old
Capital Securities must be received by the Exchange Agent on or prior to the
Expiration Date, or (ii) such Old Capital Securities must be tendered pursuant
to the procedures for book-entry transfer set forth below and a book-entry
confirmation must be received by the Exchange Agent, in each case on or prior to
the Expiration Date, or (iii) the guaranteed delivery procedures set forth below
must be complied with.
If less than all of a tendering holder's Old Capital Securities are
tendered, the tendering holder should fill in the amount of Old Capital
Securities being tendered in the appropriate box on the Letter of Transmittal.
The entire amount of Old Capital Securities delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER, AND
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT.
IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED, PROPERLY
INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-entry Transfer. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange Offer
within two business days after the date of this Prospectus. Any financial
institution that is a participant in DTC's book-entry transfer facility system
may make a book-entry delivery of the Old Capital Securities by causing DTC to
transfer such Old Capital Securities into the Exchange Agent's account at DTC in
accordance with DTC's procedures for transfers. However, although delivery of
Old Capital Securities may be effected through book-entry transfer into the
Exchange Agent's account at DTC, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees and any other required documents, must in any case be delivered to
and received by the Exchange Agent at its address set forth below under
"-- Exchange Agent" on or prior to the Expiration Date, or the guaranteed
delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT
30
<PAGE> 34
Signature Guarantees. Certificates for the Old Capital Securities need not
be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (b) such registered holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of Transmittal.
In the case of (a) or (b) above, such certificates for Old Capital Securities
must be duly endorsed or accompanied by a properly executed bond power, with the
endorsement or signature on the bond power and on the Letter of Transmittal
guaranteed by a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as an "eligible guarantor institution," including (as such terms
are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association (an "Eligible Institution"), unless surrendered
on behalf of such Eligible Institution. See Instruction 1 to the Letter of
Transmittal.
Delivery. The method of delivery of the book-entry confirmation of
certificates representing tendered Old Capital Securities, the Letter of
Transmittal, and all other required documents is at the option and sole risk of
the tendering holder, and "delivery" will be deemed made only when actually
received by the Exchange Agent. If delivery is by mail, registered mail, return
receipt requested, properly insured, or an overnight delivery service is
recommended. In all such cases, sufficient time should be allowed to ensure
timely delivery.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of (i) a book-entry confirmation with
respect to such Old Capital Securities or (ii) certificates representing Old
Capital Securities and a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees and any other documents required by the Letter of Transmittal.
Accordingly, the delivery of New Capital Securities might not be made to all
tendering holders at the same time, and will depend upon when book-entry
confirmations with respect to Old Capital Securities or certificates
representing Old Capital Securities and other required documents are received by
the Exchange Agent.
Guaranteed Delivery. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all required
documents to reach the Exchange Agent on or before the Expiration Date, or the
procedures for book-entry transfer cannot be completed on a timely basis, such
Old Capital Securities may nevertheless be tendered, provided that all of the
following guaranteed delivery procedures are complied with: (i) such tenders are
made by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form accompanying
the Letter of Transmittal or an Agent's Message, is received by the Exchange
Agent, as provided below, on or prior to the Expiration Date; and (iii) the
certificates (or a book-entry confirmation) representing all tendered Old
Capital Securities, in proper form for transfer, together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) or an
Agent's Message, with any required signature guarantees and any other documents
required by the Letter of Transmittal, are received by the Exchange Agent within
five New York Stock Exchange trading days after the date of execution of such
Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be
delivered by hand, or transmitted by facsimile or mail, to the Exchange Agent
and must include a guarantee by an Eligible Institution in the form set forth in
such notice.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees and any other
documents required by the Letter of Transmittal. Accordingly, the delivery of
New Capital Securities might not be made to all tendering holders at the same
time, and will depend upon when Old Capital Securities, book-entry confirmations
with respect to Old Capital Securities and other required documents are received
by the Exchange Agent.
31
<PAGE> 35
The acceptance by the Company and the Issuer Trust for exchange of Old
Capital Securities tendered pursuant to any of the procedures described above
will constitute a binding agreement among the tendering holder, the Company and
the Issuer Trust upon the terms and subject to the conditions of the Exchange
Offer.
The Company understands that the Exchange Agent has confirmed with DTC that
any financial institution that is a participant in DTC's system may utilize
DTC's Automated Tender Offer Program ("ATOP") to tender Old Capital Securities.
The Company further understands that the Exchange Agent will request, within two
business days after the date the Exchange Offer commences, that DTC establish an
account with respect to the Old Capital Securities for the purpose of
facilitating the Exchange Offer, and any participant may make book-entry
delivery of Old Capital Securities by causing DTC to transfer such Old Capital
Securities in the Exchange Agent's account in accordance with DTC's ATOP
procedures for transfer. However, the exchange of Old Capital Securities so
tendered will only be made after timely confirmation of such book-entry transfer
and timely receipt by the Exchange Agent of an Agent's Message (as defined in
the next sentence), and any other documents required by the Letter of
Transmittal. The term "Agent's Message" means a message, transmitted by DTC and
received by the Exchange Agent and forming part of book-entry confirmation,
which states that DTC has received an express acknowledgment from a participant
tendering Old Capital Securities which are the subject of such book-entry
confirmation and that such participant has received and agrees to be bound by
the terms of the Letter of Transmittal and that the Company may enforce such
agreement against such participant.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Company and the
Issuer Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Company and the Issuer Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the view of counsel to the Company and the Issuer Trust,
be unlawful. The Company and the Issuer Trust also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the Exchange Offer
as set forth below under "-- Conditions to the Exchange Offer" or any condition
or irregularity in any tender of Old Capital Securities of any particular holder
whether or not similar conditions or irregularities are waived in the case of
other holders.
The Company's and the Issuer Trust's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Company, the
Issuer Trust, any affiliates or assigns of the Company or the Issuer Trust, the
Exchange Agent nor any other person shall be under any duty to give any
notification of any irregularities in tenders or incur any liability for failure
to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Company or
the Issuer Trust, proper evidence satisfactory to the Company or the Issuer
Trust, in their sole discretion, of such person's authority to so act must be
submitted.
A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other nominee
or custodian is urged to contact such entity promptly if such beneficial holder
wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
Based on interpretations by the Staff as set forth in no-action letters
issued to third parties, the Company and the Issuer Trust believe that holders
of Old Capital Securities (other than any holder that is an "affiliate" of the
Company or the Issuer Trust as defined under Rule 405 of the Securities Act) who
exchange their Old Capital Securities for New Capital Securities pursuant to the
Exchange Offer may offer such New Capital Securities for resale, resell such New
Capital Securities and otherwise transfer such New Capital Securities
32
<PAGE> 36
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such New Capital Securities are acquired in
the ordinary course of such holders' business and such holders are not engaged
in, and do not intend to engage in, a distribution of such New Capital
Securities and have no arrangement or understanding with any person to
participate in the distribution of such New Capital Securities. However, the
Staff has not considered the Exchange Offer in the context of a no-action
letter, and there can be no assurance that the Staff would make a similar
determination with respect to the Exchange Offer. However, any holder of Old
Capital Securities who is an "affiliate" of the Company or the Issuer Trust or
who intends to participate in the Exchange Offer for the purpose of distributing
New Capital Securities, or any broker-dealer who purchased Old Capital
Securities from the Issuer Trust to resell pursuant to Rule 144A or any other
available exemption under the Securities Act, (a) will not be able to rely on
the interpretations of the Staff set forth in the above-mentioned interpretive
letters, (b) will not be permitted or entitled to tender such Old Capital
Securities in the Exchange Offer and (c) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
sale or other transfer of such Old Capital Securities unless such sale is made
pursuant to an exemption from such requirements. In addition, as described
below, if any broker-dealer holds Old Capital Securities acquired for its own
account as a result of market-making or other trading activities and exchanges
such Old Capital Securities for New Capital Securities, then such broker-dealer
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Capital Securities.
Each holder of Old Capital Securities (other than certain specified
holders) who wishes to exchange them for New Capital Securities in the Exchange
Offer will be required to represent that: (i) it is not an "affiliate" of the
Company or the Issuer Trust; (ii) any New Capital Securities to be received by
it are being acquired in the ordinary course of its business; and (iii) it is
not engaged in, and does not intend to engage in, a distribution (within the
meaning of the Securities Act) of such New Capital Securities and has no
arrangement or understanding to participate in a distribution of New Capital
Securities. In addition, the Company and the Issuer Trust may require such
holder, as a condition to such holder's eligibility to participate in the
Exchange Offer, to furnish to the Company and the Issuer Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such holder
holds the Old Capital Securities to be exchanged in the Exchange Offer. Each
broker-dealer that receives New Capital Securities for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such New
Capital Securities. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. Based on the
position taken by the Staff in the interpretive letters referred to above, the
Company and the Issuer Trust believe that broker-dealers who acquired Old
Capital Securities for their own accounts as a result of market-making
activities or other trading activities may fulfill their prospectus delivery
requirements with respect to the New Capital Securities received upon exchange
of such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale of
such New Capital Securities. Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-Dealer
during the period referred to below in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such Old
Capital Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the Company
and the Issuer Trust have agreed to allow the Participating Broker-Dealers to
use this Prospectus, as it may be amended or supplemented from time to time, in
connection with resales of such New Capital Securities for a period of ninety
(90) days after the Expiration Date. See "Plan of Distribution." Any
Participating Broker-Dealer who is an "affiliate" of the Company or the Issuer
Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
33
<PAGE> 37
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal, that, upon receipt of notice from the
Company or the Issuer Trust of the occurrence of any event or the discovery of
any fact which makes any statement contained or incorporated by reference in
this Prospectus untrue in any material respect or which causes this Prospectus
to omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading, such Participating Broker-Dealer
will suspend the sale of New Capital Securities (or the Guarantee or the New
Junior Subordinated Debentures, as applicable) pursuant to this Prospectus until
the Company or the Issuer Trust has amended or supplemented this Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to such Participating Broker-Dealer or the Company or
the Issuer Trust has given notice that the sale of the New Capital Securities
(or the Guarantee or the New Junior Subordinated Debentures, as applicable) may
be resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective, a written or facsimile transmission of such notice
of withdrawal must be timely received by the Exchange Agent at its address set
forth below under "-- Exchange Agent" on or prior to the Expiration Date. Any
such notice of withdrawal must specify the name of the person who tendered the
Old Capital Securities to be withdrawn, the aggregate liquidation amount of Old
Capital Securities to be withdrawn, and (if certificates for such Old Capital
Securities have been tendered) the name of the registered holder of the Old
Capital Securities as set forth on the Old Capital Securities, if different from
that of the person who tendered such Old Capital Securities. If Old Capital
Securities have been delivered or otherwise identified to the Exchange Agent,
then prior to the physical release of such Old Capital Securities, the tendering
holder must submit the serial numbers shown on the particular Old Capital
Securities to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of Old Capital
Securities tendered for the account of an Eligible Institution. If Old Capital
Securities have been tendered pursuant to the procedures for book-entry transfer
set forth above under "-- Procedures for Tendering Old Capital Securities," then
the notice of withdrawal must specify the name and number of the account at DTC
to be credited with the withdrawal of Old Capital Securities, in which case a
notice of withdrawal will be effective if delivered to the Exchange Agent by
written or facsimile transmission. Withdrawals of tenders of Old Capital
Securities may not be rescinded. Old Capital Securities properly withdrawn will
not be deemed validly tendered for purposes of the Exchange Offer, but may be
re-tendered at any subsequent time on or prior to the Expiration Date by
following any of the procedures described above under "-- Procedures for
Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company and the
Issuer Trust, in their sole discretion, whose determination shall be final and
binding on all parties. Neither the Company, the Issuer Trust, any affiliates or
assigns of the Company or the Issuer Trust, the Exchange Agent nor any other
person shall be under any duty to give any notification of any irregularities in
any notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which are
withdrawn will be returned to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON THE NEW CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the last Distribution Payment Date with
respect to such Old Capital Securities prior to the original issue date of the
New Capital Securities or, if no such Distributions have been made, will not
receive any accumulated Distributions on such Old Capital Securities, and will
be deemed to have waived the right to receive any Distributions on such Old
Capital Securities accumulated from and after such Distribution Payment Date or,
if no such Distributions have been made, from and after June 3, 1997. However,
because Distributions on the New Capital Securities
34
<PAGE> 38
will accumulate from such date, the amount of the Distributions received by
holders whose Old Capital Securities are accepted for exchange will not be
affected by the exchange.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Company and the Issuer Trust will not be
required to accept for exchange, or to exchange, any Old Capital Securities for
any New Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Old Capital Securities have theretofore been accepted
for exchange) or may waive any conditions to or amend the Exchange Offer, if
there shall occur a change in the current interpretation by the Staff which
permits the New Capital Securities issued pursuant to the Exchange Offer in
exchange for Old Capital Securities to be offered for resale, resold and
otherwise transferred by holders thereof (other than broker-dealers and any such
holder which is an "affiliate" of the Company or the Issuer Trust within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such New Capital Securities are acquired in the ordinary course of such
holders' business and such holders have no arrangement or understanding with any
person to participate in the distribution of such New Capital Securities.
If the Company and the Issuer Trust determine in their sole and absolute
discretion that the foregoing event has occurred, the Company and the Issuer
Trust may, subject to applicable law, terminate the Exchange Offer (whether or
not any Old Capital Securities have theretofore been accepted for exchange) or
may waive any such condition or otherwise amend the terms of the Exchange Offer
in any respect. If such waiver or amendment constitutes a material change to the
Exchange Offer, the Company and the Issuer Trust will promptly disclose such
amendment or waiver by means of a prospectus supplement that will be distributed
to the registered holders of the Old Capital Securities, and the Company and the
Issuer Trust will extend the Exchange Offer to the extent required by Rule 14e-1
under the Exchange Act.
EXCHANGE AGENT
Bankers Trust Company has been appointed as Exchange Agent for the Exchange
Offer. Requests for additional copies of this Prospectus or the Letter of
Transmittal and any other required documents, questions or requests for
assistance should be directed to the Exchange Agent as follows:
Bankers Trust Company
Four Albany Street, 4th Floor
New York, New York 10006
Attn: Corporate Trust and Agency Group
Telephone: (212) 250-6161
Facsimile: (212) 250-6392/6961
Delivery of the Letter of Transmittal and any other required documents
should be directed to:
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Mail:
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Corporate Trust and Agency Corporate Trust and Agency Corporate Trust and Agency
Group Group Group
Reorganization Unit Receipt and Delivery Window Reorganization Unit
P.O. Box 292737 123 Washington Street, 1st 648 Grassmere Park Road
Nashville, TN 37229-2737 Floor Nashville, TN 37211
New York, NY 10006
</TABLE>
Delivery to other than the above address or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Company has agreed to pay the Exchange Agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith. The Company will also pay
35
<PAGE> 39
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Capital Securities in connection with the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
Neither the Company nor the Issuer Trust will make any payment to brokers,
dealers or others soliciting acceptances of the Exchange Offer.
DESCRIPTION OF THE NEW CAPITAL SECURITIES
The Old Capital Securities have been issued and the New Capital Securities
will be issued pursuant to the terms of the Trust Agreement. The Property
Trustee, Bankers Trust Company, acts as trustee for the Capital Securities under
the Trust Agreement. The terms of the Capital Securities include those stated in
the Trust Agreement and those made part of the Trust Agreement by the Trust
Indenture Act and the Trust Act. The Trust Agreement will be qualified under the
Trust Indenture Act upon effectiveness of the Registration Statement with
respect to the Capital Securities. See "The Exchange Offer." Wherever particular
defined terms of the Trust Agreement are referred to herein, such defined terms
are incorporated herein by reference. The following summary of the material
terms and provisions of the Capital Securities does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the Trust
Agreement (a copy of which may be obtained from the Company or the Issuer
Trust), the Trust Act and the Trust Indenture Act.
GENERAL
The New Capital Securities will be limited to $20,000,000 aggregate
Liquidation Amount outstanding. The New Capital Securities will rank pari passu,
and payments will be made thereon pro rata, with the Common Securities except as
described under "-- Subordination of Common Securities." The New Junior
Subordinated Debentures will be registered in the name of the Issuer Trust and
held by the Property Trustee in trust for the benefit of the holders of the
Capital Securities and Common Securities. The Guarantee will be a guarantee on a
subordinated basis with respect to the New Capital Securities but will not
guarantee payment of Distributions or amounts payable on redemption or
liquidation of such New Capital Securities when the Issuer Trust does not have
funds on hand available to make such payments. See "Description of Guarantee."
DISTRIBUTIONS
The New Capital Securities represent preferred undivided beneficial
interests in the assets of the Issuer Trust, and Distributions on each New
Capital Security will be payable at an annual rate equal to 9.375% on the stated
Liquidation Amount of $1,000, payable semi-annually in arrears on the
Distribution Date to the holders of the New Capital Securities at the close of
business on the May 15 or November 15 (whether or not a Business Day (as defined
below)) next preceding the relevant Distribution Date. Distributions on the New
Capital Securities will be cumulative. Distributions will accumulate from the
date of original issuance. The first Distribution Date for the New Capital
Securities will be December 1, 1997. The amount of Distributions payable for any
period less than a full Distribution period will be computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period. Distributions payable for each full Distribution period
will be computed by dividing the rate per annum by two. If any date on which
Distributions are payable on the New Capital Securities is not a Business Day,
then payment of the Distributions payable on such date will be made on the next
succeeding day that is a Business Day (without
36
<PAGE> 40
any additional Distributions or other payment in respect of any such delay),
with the same force and effect as if made on the date such payment was
originally payable.
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
on the Subordinated Debentures at any time or from time to time for a period not
exceeding 10 consecutive semi-annual periods with respect to each Extension
Period, provided that no Extension Period may extend beyond the Stated Maturity
of the Subordinated Debentures. As a consequence of any such deferral,
semi-annual Distributions on the New Capital Securities by the Issuer Trust will
be deferred during any such Extension Period. Distributions to which holders of
the New Capital Securities are entitled will accumulate additional Distributions
thereon at a rate equal to 9.375% per annum, compounded semi-annually from the
relevant payment date for such Distributions, computed on the basis of a 360-day
year of twelve 30-day months and the actual days elapsed in a partial month in
such period. Additional Distributions payable for each full Distribution period
will be computed by dividing the rate per annum by two. The term "Distributions"
as used herein shall include any such additional Distributions. During any such
Extension Period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company that rank pari passu in all respects with or
junior in interest to the Subordinated Debentures (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any shareholder's rights
plan, or the issuance of rights, stock or other property under any shareholder's
rights plan, or the redemption or repurchase of rights pursuant thereto, or (e)
any dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to the termination of any
such Extension Period, the Company may further defer the payment of interest,
provided that no Extension Period may exceed 10 consecutive semi-annual periods
or extend beyond the Stated Maturity of the Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all amounts then
due, the Company may elect to begin a new Extension Period. No interest shall be
due and payable during an Extension Period, except at the end thereof. The
Company must give the Issuer Trustees and the Property Trustee notice of its
election of such Extension Period at least one Business Day prior to the earlier
of (i) the date the Distributions on the New Capital Securities would have been
payable but for the election to begin such Extension Period and (ii) the date
the Property Trustee is required to give notice to holders of the New Capital
Securities of the record date or the date such Distributions are payable, but in
any event not less than one Business Day prior to such record date. The Property
Trustee will give notice of the Company's election to begin a new Extension
Period to the holders of the New Capital Securities. Subject to the foregoing,
there is no limitation on the number of times that the Company may elect to
begin an Extension Period. See "Description of the New Junior Subordinated
Debentures -- Option To Extend Interest Payment Period" and "Certain Federal
Income Tax Consequences -- Interest Income 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
Subordinated Debentures.
The revenue of the Issuer Trust available for distribution to holders of
the New Capital Securities will be limited to payments under the Subordinated
Debentures. See "Description of the New Junior Subordinated
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<PAGE> 41
Debentures." If the Company does not make payments on the Subordinated
Debentures, the Issuer Trust may not have funds available to pay Distributions
or other amounts payable on the New Capital Securities. The payment of
Distributions and other amounts payable on the New Capital Securities (if and to
the extent the Issuer Trust has funds legally available for and cash sufficient
to make such payments) is guaranteed by the Company on a limited basis as set
forth herein under "Description of Guarantee."
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Subordinated
Debentures, whether at maturity or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment or redemption shall be applied by
the Property Trustee to redeem a Like Amount (as defined below) of the Trust
Securities, upon not less than 30 nor more than 60 days' notice, at a redemption
price (the "Redemption Price") equal to the aggregate Liquidation Amount of such
Capital Securities plus accumulated but unpaid Distributions thereon to the date
of redemption (the "Redemption Date") and the related amount of the premium, if
any, paid by the Company upon the concurrent redemption of such Subordinated
Debentures. See "Description of the New Junior Subordinated
Debentures -- Redemption." If less than all the Subordinated Debentures are to
be repaid or redeemed on a Redemption Date, then the proceeds from such
repayment or redemption shall be allocated to the redemption pro rata of the
Capital Securities and the Common Securities. The amount of premium, if any,
paid by the Company upon the redemption of all or any part of the Subordinated
Debentures to be repaid or redeemed on a Redemption Date shall be allocated to
the redemption pro rata of the Capital Securities and the Common Securities.
The Company has the right to redeem the Subordinated Debentures (i) on or
after June 1, 2007, in whole at any time or in part from time to time, or (ii)
in whole, but not in part, at any time within 90 days following the occurrence
and during the continuation of a Tax Event, Investment Company Event or Capital
Treatment Event (each as defined below), in each case subject to possible
regulatory approval. See "-- Liquidation Distribution Upon Dissolution." A
redemption of the Subordinated Debentures would cause a mandatory redemption of
a Like Amount of the New Capital Securities and Common Securities at the
Redemption Price.
The Redemption Price, in the case of a redemption under (i) above, shall
equal the following prices, expressed in percentages of the Liquidation Amount
(as defined below), together with accumulated Distributions to but excluding the
date fixed for redemption, if redeemed during the 12-month period beginning June
1:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
- - ---- ----------------
<S> <C>
2007........................................................ 104.69%
2008........................................................ 104.22
2009........................................................ 103.75
2010........................................................ 103.28
2011........................................................ 102.81
2012........................................................ 102.34
2013........................................................ 101.88
2014........................................................ 101.41
2015........................................................ 100.94
2016........................................................ 100.47
</TABLE>
and at 100% on or after June 1, 2017.
The Redemption Price, in the case of a redemption on or after June 1, 2007
following a Tax Event, Investment Company Event or Capital Treatment Event shall
equal the Redemption Price then applicable to a redemption under (i) above. The
Redemption Price, in the case of a redemption prior to June 1, 2007 following a
Tax Event, Investment Company Event or Capital Treatment Event as described
under (ii) above, will equal for each Capital Security the Make-Whole Amount for
a corresponding $1,000 principal amount of Subordinated Debentures together with
accumulated Distributions to but excluding the date fixed for redemption. The
"Make-Whole Amount" will be equal to the greater of (i) 100% of the principal
amount of
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such Subordinated Debentures and (ii) as determined by a Quotation Agent (as
defined below), the sum of the present values of the principal amount and
premium payable as part of the Redemption Price with respect to an optional
redemption of such Subordinated Debentures on June 1, 2007, together with the
present values of scheduled payments of interest (not including the portion of
any such payments of interest accrued as of the Redemption Date) from the
Redemption Date to June 1, 2007 (the "Remaining Life"), in each case discounted
to the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of 30-day months) at the Adjusted Treasury Rate.
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
Treasury Rate plus (i) 185 basis points if such Redemption Date occurs on or
before June 1, 1998 or (ii) 125 basis points if such Redemption Date occurs
after June 1, 1998.
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the week immediately prior to the calculation date, appearing in the
most recently published statistical release designated "H.15 (519)" or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in the City of New York or the City of Raleigh,
North Carolina are authorized or required by law or executive order to remain
closed, or (c) a day on which the Property Trustee's Corporate Trust Office or
the Corporate Trust Office of the Debenture Trustee is closed for business.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount (as defined below) equal to that
portion of the principal amount of Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and (ii) with respect to a distribution of
Subordinated Debentures to holders of Trust Securities in connection with a
dissolution or liquidation of the Issuer Trust, Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Tax Event" means the receipt by the Issuer Trust of an opinion of counsel
to the Company experienced in such matters to the effect that, as a result of
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of the Capital Securities, there is more than an insubstantial risk
that (i) the Issuer Trust is, or will be within 90 days of the delivery of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Subordinated Debentures, (ii) interest payable by the
Company on the Subordinated Debentures is not, or within 90 days of the delivery
of such opinion, will not be, deductible by the Company, in whole or in part,
for United States federal income tax purposes or (iii) the Issuer Trust is, or
will be within 90 days of the delivery of such opinion, subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
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<PAGE> 43
"Investment Company Event" means the receipt by the Issuer Trust of an
opinion of counsel to the Company experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Issuer Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act, which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Capital Securities.
"Capital Treatment Event" means the reasonable determination by the Company
that, as a result of the occurrence of any amendment to, or change (including
any announced prospective change) in, the laws (or any rules or regulations
thereunder) of the United States or any political subdivision thereof or
therein, or as a result of any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or such pronouncement, action or decision
is announced on or after the date of issuance of the Capital Securities, there
is more than an insubstantial risk that the Company will not be entitled to
treat an amount equal to the Liquidation Amount of the Capital Securities as
"Tier 1 Capital" (or the then equivalent thereof) for purposes of the risk-based
capital adequacy guidelines of the Federal Reserve, as then in effect and
applicable to the Company.
Payment of Additional Sums. If a Tax Event described in clause (i) or
(iii) of the definition of Tax Event above has occurred and is continuing and
the Issuer Trust is the holder of all the Subordinated Debentures, the Company
will pay Additional Sums (as defined below), if any, on the Subordinated
Debentures.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Issuer Trust on the
outstanding Capital Securities and Common Securities of the Issuer Trust will
not be reduced as a result of any additional taxes, duties and other
governmental charges to which the Issuer Trust has become subject as a result of
a Tax Event.
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 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 the Issuer Trust has funds on hand available for the
payment of such Redemption Price. See also "-- Subordination of Common
Securities."
If the Issuer Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, in the case of Capital Securities held in
book-entry form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Capital Securities. With respect to Capital Securities not held in book-entry
form, the Property Trustee, to the extent funds are available, will irrevocably
deposit with the paying agent for the Capital Securities funds sufficient to pay
the applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing the Capital Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Capital Securities called for redemption shall be
payable to the holders of the Capital Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit all
rights of the holders of such Capital Securities so called for redemption will
cease, except the right of the holders of such Capital Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Capital Securities will cease to be outstanding. If any date fixed for
redemption of Capital Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the
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<PAGE> 44
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 the Issuer Trust or by the Company
pursuant to the Guarantee as described under "Description of Guarantee,"
Distributions on such Capital Securities will continue to accumulate at the then
applicable rate, from the Redemption Date originally established by the Issuer
Trust 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.
Subject to applicable law (including, without limitation, United States
federal securities laws), the Company or its affiliates may at any time and from
time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement, and may resell such securities.
If less than all the Capital Securities and Common Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of such
Capital Securities and Common Securities to be redeemed shall be allocated pro
rata to the Capital Securities and the Common Securities based upon the relative
Liquidation Amounts of such classes. The particular Capital Securities to be
redeemed shall be selected on a pro rata basis not more than 60 days prior to
the Redemption Date by the Property Trustee from the outstanding Capital
Securities not previously called for redemption, or if the Capital Securities
are then held in the form of a Global Capital Security (as defined below), in
accordance with DTC's customary procedures. The Property Trustee shall promptly
notify the securities registrar for the Trust Securities 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, in the case of any Capital Securities redeemed or to be redeemed only in
part, 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 registered holder of Capital
Securities to be redeemed at its address appearing on the securities register
for the Trust Securities. Unless the Company defaults in payment of the
Redemption Price on the Subordinated Debentures, on and after the Redemption
Date interest will cease to accrue on the Subordinated Debentures or portions
thereof (and, unless payment of the Redemption Price in respect of the Capital
Securities is withheld or refused and not paid either by the Issuer Trust or the
Company pursuant to the Guarantee, Distributions will cease to accumulate on the
Capital Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
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 Amount of such Capital Securities and Common Securities.
However, if on any Distribution Date or Redemption Date a Debenture Event of
Default has occurred and is continuing as a result of any failure by the Company
to pay any amounts in respect of the Subordinated Debentures when due, no
payment of any Distribution on, or Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all the outstanding
Capital Securities for all Distribution periods terminating on or prior thereto,
or in the case of payment of the Redemption Price the full amount of such
Redemption Price on all the outstanding Capital Securities then called for
redemption, shall have been made or provided for, and all funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the Capital Securities then due and
payable.
In the case of any Event of Default (as defined below) resulting from a
Debenture Event of Default, the holders of the Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
the Trust Agreement until the effects of all such Events of Default with respect
to such Capital Securities have been cured, waived or otherwise eliminated. See
"-- Events of Default; Notice" and "Description of the New Junior Subordinated
Debentures -- Debenture Events of Default." Until all such
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Events of Default under the Trust Agreement with respect to the Capital
Securities have been so cured, waived or otherwise eliminated, the Property
Trustee will act solely on behalf of the holders of the Capital Securities and
not on behalf of the holders 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 DISSOLUTION
The amount payable on the Capital Securities in the event of any
liquidation of the Issuer Trust is $1,000 per Capital Security plus accumulated
and unpaid Distributions, subject to certain exceptions, which may be in the
form of a distribution of such amount in Subordinated Debentures.
The holders of all the outstanding Common Securities have the right at any
time to dissolve the Issuer Trust and, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, cause the
Subordinated Debentures to be distributed to the holders of the Capital
Securities and Common Securities in liquidation of the Issuer Trust.
The Federal Reserve's risk-based capital guidelines currently provide that
redemptions of permanent equity or other capital instruments before stated
maturity could have a significant impact on a bank holding company's overall
capital structure and that any organization considering such a redemption should
consult with the Federal Reserve before redeeming any equity or capital
instrument prior to maturity if such redemption could have a material effect on
the level or composition of the organization's capital base (unless the equity
or capital instrument were redeemed with the proceeds of, or replaced by, a like
amount of a similar or higher quality capital instrument and the Federal Reserve
considers the organization's capital position to be fully adequate after the
redemption).
In the event the Company, while a holder of Common Securities, dissolves
the Issuer Trust prior to the Stated Maturity of the Capital Securities and the
dissolution of the Issuer Trust is deemed to constitute the redemption of
capital instruments by the Federal Reserve under its risk-based capital
guidelines or policies, the dissolution of the Issuer Trust by the Company may
be subject to the prior approval of the Federal Reserve. Moreover, any changes
in applicable law or changes in the Federal Reserve's risk-based capital
guidelines or policies could impose a requirement on the Company that it obtain
the prior approval of the Federal Reserve to dissolve the Issuer Trust.
Pursuant to the Trust Agreement, the Issuer Trust will automatically
dissolve upon expiration of its term or, if earlier, will dissolve on the first
to occur of: (i) certain events of bankruptcy, dissolution or liquidation of the
Company or the holder of the Common Securities, (ii) the distribution of a Like
Amount of the Subordinated Debentures to the holders of the Trust Securities, if
the holders of Common Securities have given written direction to the Property
Trustee to dissolve the Issuer Trust (which direction, subject to the foregoing
restrictions, is optional and wholly within the discretion of the holders of
Common Securities), (iii) the repayment of all the Capital Securities in
connection with the redemption of all the Trust Securities as described under
"-- Redemption Procedures" and (iv) the entry of an order for the dissolution of
the Issuer Trust by a court of competent jurisdiction.
If dissolution of the Issuer Trust occurs as described in clause (i), (ii)
or (iv) above, the Issuer Trust will be liquidated by the Property Trustee as
expeditiously as the Property Trustee determines to be possible by distributing,
after satisfaction of liabilities to creditors of the Issuer Trust as provided
by applicable law, to the holders of such Trust Securities a Like Amount of the
Subordinated Debentures, unless such distribution is not practical, in which
event such holders will be entitled to receive out of the assets of the Issuer
Trust available for distribution to holders, after satisfaction of liabilities
to creditors of the Issuer Trust as provided by applicable law, an amount equal
to, in the case of holders of Capital Securities, the aggregate of the
Liquidation Amount plus accumulated and unpaid Distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because the Issuer Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Issuer Trust on its
Capital Securities shall be paid on a pro rata basis. The holders of the Common
Securities will be entitled to receive distributions upon any such liquidation
pro rata with the holders of the Capital Securities, except that if a Debenture
Event of Default has occurred and is
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continuing as a result of any failure by the Company to pay any amounts in
respect of the Subordinated Debentures when due, the Capital Securities shall
have a priority over the Common Securities. See "-- Subordination of Common
Securities."
After the liquidation date fixed for any distribution of Subordinated
Debentures (i) the Capital Securities will no longer be deemed to be
outstanding, (ii) DTC or its nominee, as the registered holder of Capital
Securities, will receive a registered global certificate or certificates
representing the Subordinated Debentures to be delivered upon such distribution
with respect to Capital Securities held by DTC or its nominee and (iii) any
certificates representing the Capital Securities not held by DTC or its nominee
will be deemed to represent the Subordinated Debentures having a principal
amount equal to the stated Liquidation Amount of the Capital Securities and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Capital Securities until such certificates are
presented to the security registrar for the Trust Securities for transfer or
reissuance.
If the Company does not redeem the Subordinated Debentures prior to the
Stated Maturity and the Issuer Trust is not liquidated and the Subordinated
Debentures are not distributed to holders of the Capital Securities, the Capital
Securities will remain outstanding until the repayment of the Subordinated
Debentures and the distribution of the Liquidation Distribution to the holders
of the Capital Securities.
There can be no assurance as to the market prices for the Capital
Securities or the Subordinated Debentures that may be distributed in exchange
for Capital Securities if a dissolution and liquidation of the Issuer Trust were
to occur. Accordingly, the Capital Securities that an investor may purchase,
whether pursuant to the offer made hereby or in the secondary market, or the
Subordinated Debentures that the investor may receive on dissolution and
liquidation of the Issuer Trust, may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered hereby.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement (a "Trust Agreement Event of Default" or an "Event of Default")
with respect to the Capital Securities (whatever the reason for such Trust
Agreement Event of Default and whether it is voluntary or involuntary or is
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 an "Event of Default" under the Indenture (a
"Debenture Event of Default") (see "Description of New Junior Subordinated
Debentures -- Debenture Events of Default"); or
(ii) default by the Issuer Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Issuer Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Issuer Trustees and
the Company by the holders of at least 25% in aggregate Liquidation Amount
of the outstanding Capital Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee if a successor Property Trustee has not
been appointed within 90 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of Trust Securities and the
Administrators, unless such Event of Default has been cured or waived. The
Company, as Depositor,
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and the Administrators are required to file annually with the Property Trustee a
certificate as to whether or not they are in compliance with all the conditions
and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing as a result
of any failure by the Company to pay any amounts in respect of the Subordinated
Debentures when due, the Capital Securities will have a preference over the
Common Securities with respect to payments of any amounts in respect of the
Capital Securities as described above. See "-- Subordination of Common
Securities," "-- Liquidation Distribution Upon Dissolution" and "Description of
New Junior Subordinated Debentures -- Debenture Events of Default."
REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS
The holders of at least a majority in aggregate Liquidation Amount of the
outstanding Capital Securities may remove an Issuer Trustee for cause or, if an
Indenture Event of Default has occurred and is continuing, with or without
cause. If an Issuer Trustee is removed by the holders of the outstanding Capital
Securities, the successor may be appointed by the holders of at least 25% in
Liquidation Amount of Capital Securities. If an Issuer Trustee resigns, such
Issuer Trustee will appoint its successor. If an Issuer Trustee fails to appoint
a successor, the holders of at least 25% in Liquidation Amount of the
outstanding Capital Securities may appoint a successor. If a successor has not
been appointed by the holders, any holder of Capital Securities or Common
Securities or the other Issuer Trustee may petition a court in the State of
Delaware to appoint a successor. Any Delaware Trustee must meet the applicable
requirements of Delaware law. Any Property Trustee must be a national or
state-chartered bank, and at the time of appointment have securities rated in
one of the three highest rating categories by a nationally recognized
statistical rating organization and have capital and surplus of at least
$50,000,000. No resignation or removal of an Issuer Trustee and no appointment
of a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which such Issuer
Trustee is a party, or any entity succeeding to all or substantially all of the
corporate trust business of such Issuer Trustee, will be the successor of such
Issuer Trustee under the Trust Agreement, provided such entity is otherwise
qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER TRUST
The Issuer Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except as described below or as
otherwise set forth in the Trust Agreement. The Issuer Trust may, at the request
of the holders of the Common Securities and with the consent of the holders of
at least a majority in aggregate Liquidation Amount of the outstanding Capital
Securities, merge with or into, consolidate, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to a trust organized as such under the laws of any State, so long as (i) such
successor entity either (a) expressly assumes all the obligations of the Issuer
Trust with respect to the Capital Securities or (b) substitutes for the Capital
Securities other securities having substantially the same terms as the Capital
Securities (the "Successor Securities") so long as the Successor Securities have
the same priority as the Capital Securities with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) a trustee of such
successor entity, possessing the same powers and duties as the Property Trustee,
is appointed to hold the Subordinated Debentures, (iii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Securities) in any
material respect, (v) such successor entity has a purpose substantially
identical to that of the Issuer Trust, (vi) prior to such merger, consolidation,
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amalgamation, replacement, conveyance, transfer or lease, the Issuer Trust has
received an opinion from independent counsel experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Capital Securities (including any Successor
Securities) in any material respect and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Issuer Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act, and (vii) the Company or
any permitted successor or assignee owns all the common securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Issuer Trust may not, except with the consent
of holders of 100% in aggregate 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 the Issuer Trust or the successor
entity to be taxable as a corporation for United States federal income tax
purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "-- Removal of Issuer Trustees;
Appointment of Successors" and "Description of Guarantee -- Modification of the
Guarantee; 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 holders of a
majority of the Common Securities and the Property Trustee, without the consent
of the holders of the Capital Securities, (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement, provided that any such amendment
does not adversely affect in any material respect the interests of any holder of
Trust Securities, or (ii) to modify, eliminate or add to any provisions of the
Trust Agreement to such extent as may be necessary to ensure that the Issuer
Trust will not be taxable as a corporation for United States federal income tax
purposes at any time that any Trust Securities are outstanding or to ensure that
the Issuer Trust will not be required to register as an "investment company"
under the Investment Company Act, and any amendments of the Trust Agreement will
become effective when notice of such amendment is given to the holders of Trust
Securities. The Trust Agreement may be amended by the holders of a majority of
the Common Securities and the Property Trustee with (i) the consent of holders
representing not less than a majority in aggregate Liquidation Amount of the
outstanding Capital Securities and (ii) receipt by the Issuer Trustees of an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Issuer Trustees in accordance with such amendment will not
affect the Issuer Trust's not being taxable as a corporation for United States
federal income tax purposes or the Issuer Trust's exemption from status as an
"investment company" under the Investment Company Act, except that, without the
consent of each holder of Trust Securities affected thereby, the Trust Agreement
may not be amended to (x) change the amount or timing of any Distribution on the
Trust Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a specified date or
(y) restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as any Subordinated Debentures are held by the Issuer Trust, the
Property Trustee will not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or execute any
trust or power conferred on the Property Trustee with respect to the
Subordinated Debentures, (ii) waive any past default that is waivable under
Section 5.13 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the Subordinated Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of at least a majority in
aggregate Liquidation Amount of the outstanding Capital Securities, except that,
if a consent under the Indenture would require the consent of each holder of
Subordinated Debentures affected
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thereby, no such consent will be given by the Property Trustee without the prior
consent of each holder of the Capital Securities. The Property Trustee may not
revoke any action previously authorized or approved by a vote of the holders of
the Capital Securities except by subsequent vote of the holders of the Capital
Securities. The Property Trustee will notify each holder of Capital Securities
of any notice of default with respect to the Subordinated Debentures. In
addition to obtaining the foregoing approvals of the holders of the Capital
Securities, before taking any of the foregoing actions, the Property Trustee
will obtain an opinion of counsel experienced in such matters to the effect that
the Issuer Trust will not be taxable as a corporation for United States federal
income tax purposes on account of such action.
Any required approval of holders of 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 Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each registered holder of Capital Securities in the manner set forth in the
Trust Agreement.
No vote or consent of the holders of Capital Securities will be required to
redeem and cancel Capital Securities in accordance with the Trust Agreement.
Notwithstanding that holders of 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 Issuer Trustees or any affiliate
of the Company or any Issuer Trustees, will, for purposes of such vote or
consent, be treated as if they were not outstanding.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The New Capital Securities initially will be represented by one or more
Capital Securities in registered, global form (collectively, the "Global
Certificates"). The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global Capital
Securities as represented by a Global Certificate.
DTC 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. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
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. Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC 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 DTC system is also available to others,
such as securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial relationship
with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of the Capital Securities within the DTC system must be made by
or through Direct Participants, which will receive a credit for the Capital
Securities on DTC's records. The ownership interest of each actual purchaser of
each Capital Security ("Beneficial Owner") is in turn to be recorded on the
Direct Participants' and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from DTC 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 the
Capital Securities. Transfers of ownership interests in the Capital Securities
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 the Capital Securities, except in the
event that use of the book-entry system for the Capital Securities is
discontinued.
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To facilitate subsequent transfers, all the Capital Securities deposited by
Participants with DTC will be registered in the name of DTC's nominee, Cede &
Co. The deposit of the Capital Securities with DTC and their registration in the
name of Cede & Co. will effect no change in beneficial ownership. DTC will have
no knowledge of the actual Beneficial Owners of the Capital Securities. DTC's
records will reflect only the identity of the Direct Participants to whose
accounts such Capital Securities are credited, which may or may not be the
Beneficial Owners. The Direct Participants and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate in respect of the Capital Securities, DTC or such nominee, as
the case may be, will be considered the sole owner or holder of the Capital
Securities represented thereby for all purposes under the Trust Agreement and
such Capital Securities. No Beneficial Owner of an interest in a Global
Certificate will be able to transfer that interest except in accordance with
DTC's applicable procedures.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of the Capital Securities (including the presentation of the
Capital Securities for exchange as described below) only at the direction of one
or more Participants to whose accounts the DTC interest in the Global
Certificates is credited and only in respect of such portion of the aggregate
liquidation amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is a Trust
Agreement Event of Default with respect to the Capital Securities, DTC will,
upon notice, exchange the Global Certificates in respect of such Capital
Securities for Certificated Securities, which it will distribute to its
Participants.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to 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 in respect of the Capital Securities held in book-entry
form will be sent to Cede & Co. If less than all of the Capital Securities are
being redeemed, the Capital Securities will be redeemed on a pro rata basis.
Although voting with respect to the Capital Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to the Capital Securities. Under its usual procedures, DTC
would mail an omnibus proxy to the Issuer Trust 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 the Capital Securities are
credited on the record date (identified in a listing attached to the omnibus
proxy).
Payments in respect of the Capital Securities held in book-entry form will
be made to DTC in immediately available funds. DTC's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance with
their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Direct Participants and Indirect Participants and not of
DTC, the Issuer Trust or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payments in respect of the
Capital Securities held in book-entry form to DTC are the responsibility of the
Issuer Trust, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Direct Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of the Capital
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC, the Direct Participants and the Indirect Participants to exercise any
rights under the Capital Securities.
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Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. None of the Company, the Issuer
Trust, the Property Trustee, or the Delaware Trustee will have any
responsibility for the performance by DTC or its Direct Participants or Indirect
Participants under the rules and procedures governing DTC. DTC may discontinue
providing its services as a securities depositary with respect to the Capital
Securities at any time by giving notice to the Company and the Issuer Trust.
Under such circumstances, in the event that a successor securities depositary is
not obtained, the Capital Security certificates will be required to be printed
and delivered. Additionally, the Issuer Trust (with the consent of the Company)
may decide to discontinue use of the system of book-entry transfers through DTC
(or a successor depositary) with respect to the Capital Securities of the Issuer
Trust. In that event, certificates for such Capital Securities will be printed
and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and the Issuer Trust believe to
be reliable, but neither the Company nor the Issuer Trust takes responsibility
for the accuracy thereof.
RESTRICTIONS ON TRANSFER
The Old Capital Securities were, and the New Capital Securities will be,
issued and may be transferred only in blocks having a liquidation amount of not
less than $100,000 (100 Old Capital Securities or New Capital Securities, as the
case may be). Any such transfer of the Old Capital Securities or the New Capital
Securities in a block having a liquidation amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever. Any such transferee shall
be deemed not to be the holder of such Old Capital Securities or New Capital
Securities for any purpose, including but not limited to, the receipt of
distributions on such Old Capital Securities or New Capital Securities, and such
transferee shall be deemed to have no interest whatsoever in such Old Capital
Securities or New Capital Securities.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities represented by the Global
Certificates shall be made to DTC, which shall credit the relevant accounts at
DTC on the applicable distribution payment dates or, in the case of Certificated
Securities, such payments shall be made by check mailed to the address of the
holder entitled thereto as such address shall appear on the books and records of
the Issuer Trust or by wire transfer. The paying agent for the Trust Securities
(the "Paying Agent") shall initially be the Property Trustee. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Administrators. In the event that the Property Trustee
shall no longer be the Paying Agent, the Property Trustee shall appoint a
successor to act as Paying Agent (which shall be a bank or trust company).
REGISTRAR AND TRANSFER AGENT
The Property Trustee is acting as registrar and transfer agent for the
Capital Securities of the Issuer Trust.
Registration of transfers or exchanges of the Capital Securities will be
effected without charge by or on behalf of the Issuer Trust, but upon payment
(with the giving of such indemnity as the Issuer Trust or the Company may
require) in respect of any tax or other government charges which may be imposed
in relation to it.
The Issuer Trust will not be required to register or cause to be registered
the transfer or exchange of the Capital Securities after such Capital Securities
have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such
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Event of Default, must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject
to this provision, the Property Trustee is under no obligation to exercise any
of the powers vested in it by the Trust Agreement at the request of any holder
of Capital Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby.
For information concerning the relationships between Bankers Trust Company,
the Property Trustee, and the Company, see "Description of the New Junior
Subordinated Debentures -- Information Concerning the Debenture Trustee."
MISCELLANEOUS
The Administrators and the Property Trustee are authorized and directed to
conduct the affairs of and to operate the Issuer Trust in such a way that the
Issuer Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or taxable as a corporation for
United States federal income tax purposes and so that the Subordinated
Debentures will be treated as indebtedness of the Company for United States
federal income tax purposes. In this connection, the Property Trustee and the
holders of Common Securities are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Issuer Trust or the Trust
Agreement, that the Property Trustee and the holders of Common Securities
determine in their discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the interests of the
holders of the Capital Securities.
Holders of the Capital Securities have no preemptive or similar rights.
The Issuer Trust may not borrow money or issue debt or mortgage or pledge
any of its assets.
GOVERNING LAW
The Trust Agreement will be governed by and construed in accordance with
the laws of the State of Delaware.
DESCRIPTION OF THE NEW JUNIOR SUBORDINATED DEBENTURES
The New Junior Subordinated Debentures are to be issued under the
Indenture, under which Bankers Trust Company is acting as Debenture Trustee.
This summary of certain terms and provisions of the New Junior Subordinated
Debentures and the Indenture does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, all the provisions of the
Indenture, including the definitions therein of certain terms. Whenever
particular defined terms of the Indenture (as amended or supplemented from time
to time) are referred to herein, such defined terms are incorporated herein by
reference. A copy of the form of Indenture is available from the Debenture
Trustee upon request.
GENERAL
Concurrently with the issuance of the Old Capital Securities, the Issuer
Trust invested the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Old Junior Subordinated Debentures
issued by the Company. Pursuant to the Exchange Offer, the Company will Exchange
$20 million aggregate principal amount of Old Junior Subordinated Debentures for
a like amount of New Junior Subordinated Debentures as soon as practicable after
the date of this Prospectus. The New Junior Subordinated Debentures will bear
interest, accruing from the date of original issuance, at a rate equal to 9.375%
per annum on the principal amount thereof, payable semi-annually in arrears on
the 1st day of June and December of each year (each, an "Interest Payment
Date"), commencing December 1, 1997, to the person in whose name each New Junior
Subordinated Debenture is registered at the close of business on the May 15 or
November 15 (whether or not a Business Day) next preceding such Interest Payment
Date. It is anticipated that, until the liquidation, if any, of the Issuer
Trust, each New Junior Subordinated Debenture will be registered in the name of
the Issuer Trust and held by the Property Trustee in trust for the benefit of
the holders of the Trust Securities. The amount of interest payable for any
period less than a full interest
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period will be computed on the basis of a 360-day year of twelve 30-day months
and the actual days elapsed in a partial month in such period. The amount of
interest payable for any full interest period will be computed by dividing the
rate per annum by two. If any date on which interest is payable on the New
Junior Subordinated Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is a
Business Day (without any interest or other payment in respect of any such
delay), with the same force and effect as if made on the date such payment was
originally payable. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the extent
permitted by law) at a rate equal to 9.375% per annum, compounded semi-annually
and computed on the basis of a 360-day year of twelve 30-day months and the
actual days elapsed in a partial month in such period. The amount of additional
interest payable for any full interest period will be computed by dividing the
rate per annum by two. The term "interest" as used herein includes semi-annually
interest payments, interest on semi-annually interest payments not paid on the
applicable Interest Payment Date and Additional Sums (as defined below), as
applicable.
The New Junior Subordinated Debentures will mature on June 1, 2027.
The New Junior Subordinated Debentures will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Indebtedness of the
Company. The New Junior Subordinated Debentures will not be subject to a sinking
fund and will not be eligible as collateral for any loan made by the Company.
The Indenture does not limit the incurrence or issuance of other secured or
unsecured debt by the Company, including Senior Indebtedness, whether under the
Indenture or any existing or other indenture or agreement that the Company may
enter into in the future or otherwise. See "-- Subordination."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right at any time during the term of the New Junior
Subordinated Debentures to defer the payment of interest at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the New Junior Subordinated Debentures. At the end
of such Extension Period, the Company must pay all interest then accrued and
unpaid (together with interest thereon at a rate equal to 9.375% per annum,
compounded semi-annually and computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such period, to
the extent permitted by applicable law). The amount of additional interest
payable for any full interest period will be computed by dividing the rate per
annum by two. During an Extension Period, interest will continue to accrue and
holders of New Junior Subordinated Debentures (or holders of Capital Securities
while outstanding) will be required to accrue interest income for United States
federal income tax purposes. See "United States Federal Income Tax
Consequences -- Interest Income and Original Issue Discount."
During any such Extension Period, the Company may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the New Junior Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or shareholder stock purchase plan or in connection
with the issuance of capital stock of the Company (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the Company) for any
class or series of the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's capital stock,
(c) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (d) any declaration of a dividend in
connection with any shareholder's rights plan, or the issuance of rights, stock
or other property
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under any shareholders rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock). Prior
to the termination of any such Extension Period, the Company may further defer
the payment of interest, provided that no Extension Period may exceed 10
consecutive semi-annual periods or extend beyond the Stated Maturity of the New
Junior Subordinated Debentures. Upon the termination of any such Extension
Period and the payment of all amounts then due, the Company may elect to begin a
new Extension Period subject to the above conditions. No interest shall be due
and payable during an Extension Period, except at the end thereof. The Company
must give the Issuer Trustees notice of its election of such Extension Period at
least one Business Day prior to the earlier of (i) the date the Distributions on
the Capital Securities would have been payable but for the election to begin
such Extension Period and (ii) the date the Property Trustee is required to give
notice to holders of the Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date. The Property Trustee will give notice of the Company's
election to begin a new Extension Period to the holders of the Capital
Securities. There is no limitation on the number of times that the Company may
elect to begin an Extension Period.
REDEMPTION
The New Junior Subordinated Debentures are redeemable prior to maturity at
the option of the Company (i) on or after June 1, 2007, in whole at any time or
in part from time to time, or (ii) in whole, but not in part, at any time within
90 days following the occurrence and during the continuation of a Tax Event,
Investment Company Event or Capital Treatment Event (each as defined under
"Description of the New Capital Securities -- Redemption"), in each case at the
redemption price described below. The proceeds of any such redemption will be
used by the Issuer Trust to redeem the Capital Securities.
The Federal Reserve's risk-based capital guidelines, which are subject to
change, currently provide that redemptions of permanent equity or other capital
instruments before stated maturity could have a significant impact on a bank
holding company's overall capital structure and that any organization
considering such a redemption should consult with the Federal Reserve before
redeeming any equity or capital instrument prior to maturity if such redemption
could have a material effect on the level or composition of the organization's
capital base (unless the equity or capital instrument were redeemed with the
proceeds of, or replaced by, a like amount of a similar or higher quality
capital instrument and the Federal Reserve considers the organization's capital
position to be fully adequate after the redemption).
The redemption of the New Junior Subordinated Debentures by the Company
prior to their Stated Maturity would constitute the redemption of capital
instruments under the Federal Reserve's current risk-based capital guidelines
and may be subject to the prior approval of the Federal Reserve. The redemption
of the New Junior Subordinated Debentures also could be subject to the
additional prior approval of the Federal Reserve under its current risk-based
capital guidelines.
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The Redemption Price for New Junior Subordinated Debentures in the case of
a redemption under (i) above shall equal the following prices, expressed in
percentages of the principal amount, together with accrued interest to but
excluding the date fixed for redemption. If redeemed during the 12-month period
beginning June 1:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- - ---- ----------
<S> <C>
2007........................................................ 104.69%
2008........................................................ 104.22
2009........................................................ 103.75
2010........................................................ 103.28
2011........................................................ 102.81
2012........................................................ 102.34
2013........................................................ 101.88
2014........................................................ 101.41
2015........................................................ 100.94
2016........................................................ 100.47
</TABLE>
and at 100% on or after June 1, 2017.
The Redemption Price in the case of a redemption on or after June 1, 2007
following a Tax Event, Investment Company Event or Capital Treatment Event shall
equal the Redemption Price then applicable to a redemption under (i) above. The
Redemption Price for New Junior Subordinated Debentures, in the case of a
redemption prior to June 1, 2007 following a Tax Event, Investment Company Event
or Capital Treatment Event as described under (ii) above, will equal the
Make-Whole Amount (as defined under "Description of the New Capital
Securities -- Redemption"), together with accrued interest to but excluding the
date fixed for redemption.
ADDITIONAL SUMS
The Company has covenanted in the Indenture that, if and for so long as (i)
the Issuer Trust is the holder of all New Junior Subordinated Debentures and
(ii) the Issuer Trust 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 sums on the New Junior Subordinated Debentures such amounts as may be
required so that the Distributions payable by the Issuer Trust will not be
reduced as a result of any such additional taxes, duties or other governmental
charges. See "Description of the New Capital Securities -- Redemption."
REGISTRATION, DENOMINATION AND TRANSFER
The New Junior Subordinated Debentures will initially be registered in the
name of the Issuer Trust. If the New Junior Subordinated Debentures are
distributed to holders of Capital Securities, it is anticipated that the
depositary arrangements for the New Junior Subordinated Debentures will be
substantially identical to those in effect for the Capital Securities. See
"Description of the New Capital Securities -- Book-Entry Only Issuance -- The
Depository Trust Company."
Payments on New Junior Subordinated Debentures represented by a global
security will be made to Cede & Co., the nominee for DTC, as the registered
holder of the New Junior Subordinated Debentures, as described under
"Description of the New Capital Securities -- Book-Entry Only Issuance -- The
Depository Trust Company." If New Junior Subordinated Debentures are issued in
certificated form, principal and interest will be payable, the transfer of the
New Junior Subordinated Debentures will be registrable, and New Junior
Subordinated Debentures will be exchangeable for New Junior Subordinated
Debentures of other authorized denominations of a like aggregate principal
amount, at the corporate trust office of the Debenture Trustee in New York, New
York or at the offices of any Paying Agent or transfer agent appointed by the
Company, provided that payment of interest may be made at the option of the
Company by check mailed to the address of the persons entitled thereto. However,
a holder of $1 million or more in aggregate principal amount of New Junior
Subordinated Debentures may receive payments of interest (other than interest
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payable at the Stated Maturity) by wire transfer of immediately available funds
upon written request to the Debenture Trustee not later than 15 calendar days
prior to the date on which the interest is payable.
The New Junior Subordinated Debentures will be issuable only in registered
form without coupons in integral multiples of $1,000. The minimum purchase
requirement will be $100,000 (100 Capital Securities). New Junior Subordinated
Debentures will be exchangeable for other New Junior Subordinated Debentures of
like tenor, of any authorized denominations, and of a like aggregate principal
amount.
New Junior Subordinated Debentures may be presented for exchange as
provided above, and may be presented for registration of transfer (with the form
of transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the securities registrar appointed under the
Indenture or at the office of any transfer agent designated by the Company for
such purpose without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. The Company will appoint the
Property Trustee as securities registrar under the Indenture. The Company may at
any time designate additional transfer agents with respect to the New Junior
Subordinated Debentures.
In the event of any redemption, neither the Company nor the Property
Trustee shall be required to (i) issue, register the transfer of or exchange New
Junior Subordinated Debentures during a period beginning at the opening of
business 15 days before the day of selection for redemption of the New Junior
Subordinated Debentures to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii) transfer or
exchange any New Junior Subordinated Debentures so selected for redemption,
except, in the case of any New Junior Subordinated Debentures being redeemed in
part, any portion thereof not to be redeemed.
Any monies deposited with the Property Trustee or any paying agent, or then
held by the Company in trust, for the payment of the principal of (and premium,
if any) or interest on any New Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Company, be repaid to
the Company and the holder of such New Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Company for
payment thereof.
RESTRICTIONS ON CERTAIN PAYMENTS; CERTAIN COVENANTS OF THE COMPANY
The Company has covenanted in the Indenture that it will not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the New Junior Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or shareholder stock purchase plan or in connection
with the issuance of capital stock of the Company (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period or other event
referred to below, (b) as a result of an exchange or conversion of any class or
series of the Company's capital stock (or any capital stock of a subsidiary of
the Company) for any class or series of the Company's capital stock or of any
class or series of the Company's indebtedness for any class or series of the
Company's capital stock, (c) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any shareholder's rights plan, or
the issuance of rights, stock or other property under any shareholder's rights
plan, or the redemption or repurchase of rights pursuant thereto, or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock), if at such time (x) there has
occurred any event (1) of which the Company has actual knowledge that with the
giving of notice or the lapse of time, or both, would constitute a Debenture
Event of Default and (2) that the Company has not taken
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reasonable steps to cure, (y) if the New Junior Subordinated Debentures are held
by the Issuer Trust, the Company is in default with respect to its payment of
any obligations under the Guarantee or (z) the Company has given notice of its
election of an Extension Period as provided in the Indenture and has not
rescinded such notice, or such Extension Period, or any extension thereof, is
continuing.
The Company has covenanted in the Indenture (i) to continue to hold,
directly or indirectly, 100% of the Common Securities, provided that certain
successors that are permitted pursuant to the Indenture may succeed to the
Company's ownership of the Common Securities, (ii) as holder of the Common
Securities, not to voluntarily terminate, windup or liquidate the Issuer Trust,
other than (a) in connection with a distribution of New Junior Subordinated
Debentures to the holders of the Capital Securities in liquidation of the Issuer
Trust or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
Issuer Trust to continue not to be taxable as a corporation for United States
federal income tax purposes.
MODIFICATION OF INDENTURE
From time to time, the Company and the Debenture Trustee may, without the
consent of any of the holders of the outstanding New Junior Subordinated
Debentures, amend, waive or supplement the provisions of the Indenture to: (i)
evidence succession of another corporation or association to the Company and the
assumption by such person of the obligations of the Company under the New Junior
Subordinated Debentures; (ii) add further covenants, restrictions or conditions
for the protection of holders of the New Junior Subordinated Debentures; (iii)
cure ambiguities or correct the New Junior Subordinated Debentures in the case
of defects or inconsistencies in the provisions thereof, so long as any such
cure or correction does not adversely affect the interest of the holders of the
New Junior Subordinated Debentures in any material respect; (iv) change the
terms of the New Junior Subordinated Debentures to facilitate the issuance of
the New Junior Subordinated Debentures in certificated or other definitive form;
(v) evidence or provide for the appointment of a successor Debenture Trustee; or
(vi) qualify, or maintain the qualification of, the Indenture under the Trust
Indenture Act. The Indenture contains provisions permitting the Company and the
Debenture Trustee, with the consent of the holders of not less than a majority
in principal amount of the New Junior Subordinated Debentures, to modify the
Indenture in a manner affecting the rights of the holders of the New Junior
Subordinated Debentures, except that no such modification may, without the
consent of the holder of each outstanding New Junior Subordinated Debenture so
affected, (i) change the Stated Maturity of the New Junior Subordinated
Debentures, or reduce the principal amount thereof, the rate of interest thereon
or any premium payable upon the redemption thereof, or change the place of
payment where, or the currency in which, any such amount is payable or impair
the right to institute suit for the enforcement of any New Junior Subordinated
Debenture or (ii) reduce the percentage of principal amount of New Junior
Subordinated Debentures, the holders of which are required to consent to any
such modification of the Indenture. Furthermore, so long as any of the 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 outstanding Capital Securities unless and until the
principal of (and premium, if any, on) the New 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 New Junior Subordinated Debentures that has occurred
and is continuing constitutes an "Event of Default" with respect to the New
Junior Subordinated Debentures:
(i) failure to pay any interest on the New Junior Subordinated
Debentures when due and payable, and continuance of such default for a
period of 30 days (subject to the deferral of any due date in the case of
an Extension Period); or
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(ii) failure to pay any principal of or premium, if any, on the New
Junior Subordinated Debentures when due whether at maturity, upon
redemption, by declaration of acceleration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the New Junior Subordinated Indenture for 90
days after written notice to the Company from the Debenture Trustee or the
holders of at least 25% in aggregate outstanding principal amount of the
outstanding New Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.
For purposes of the Trust Agreement and this Prospectus, each such Event of
Default under the New Junior Subordinated Debenture is referred to as a
"Debenture Event of Default." As described in "Description of the New Capital
Securities -- Events of Default; Notice," the occurrence of a Debenture Event of
Default will also constitute an Event of Default in respect of the Trust
Securities.
The holders of at least a majority in aggregate principal amount of
outstanding New Junior Subordinated Debentures have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Debenture Trustee. The Debenture Trustee or the holders of not less than 25%
in aggregate principal amount of outstanding New Junior Subordinated Debentures
may declare the principal due and payable immediately upon a Debenture Event of
Default, and, should the Debenture Trustee or such holders of New Junior
Subordinated Debentures fail to make such declaration, the holders of at least
25% in aggregate Liquidation Amount of the outstanding Capital Securities shall
have such right. The holders of a majority in aggregate principal amount of
outstanding New Junior Subordinated Debentures may annul such declaration and
waive the default if all defaults (other than the non-payment of the principal
of New Junior Subordinated Debentures which has become due solely by such
acceleration) have been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee. Should the holders of New Junior
Subordinated Debentures fail to annul such declaration and waive such default,
the holders of a majority in aggregate Liquidation Amount of the outstanding
Capital Securities shall have such right.
The holders of at least a majority in aggregate principal amount of the
outstanding New Junior Subordinated Debentures affected thereby may, on behalf
of the holders of all the New Junior Subordinated Debentures, waive any past
default, except a default in the payment of principal (or premium, if any) or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding New Junior
Subordinated Debenture affected thereby. See "-- Modification of Indenture." The
Company is required to file annually with the Debenture Trustee a certificate as
to whether or not the Company is in compliance with all the conditions and
covenants applicable to it under the Indenture.
If a Debenture Event of Default occurs and is continuing, the Property
Trustee will have the right to declare the principal of and the interest on the
New Junior Subordinated Debentures, and any other amounts payable under the
Indenture, to be forthwith due and payable and to enforce its other rights as a
creditor with respect to the New Junior Subordinated Debentures.
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 any amounts payable
in respect of the New Junior Subordinated Debentures on the date such amounts
are otherwise payable, a registered holder of Capital Securities may institute a
legal proceeding directly against the Company for enforcement of payment to such
holder of an amount equal to the amount payable in respect of New Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Capital Securities held by such holder (a "Direct
Action"). The Company may not amend the Indenture to remove the foregoing right
to bring a Direct Action without the prior written consent of the holders of all
the Capital Securities. The Company will have the right under the
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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 available to the holders of the New Junior Subordinated
Debentures except under the circumstances described in the preceding paragraph.
See "Description of the New Capital Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company may not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person may consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless (i) if the Company
consolidates with or merges into another Person or conveys or transfers its
properties and assets substantially as an entirety to any Person, the successor
Person is organized under the laws of the United States or any state or the
District of Columbia, and such successor Person expressly assumes the Company's
obligations in respect of the New Junior Subordinated Debentures; (ii)
immediately after giving effect thereto, no Debenture Event of Default, and no
event which, after notice or lapse of time or both, would constitute a Debenture
Event of Default, has occurred and is continuing; and (iii) certain other
conditions as prescribed in the Indenture are satisfied.
The provisions of the Indenture do not afford holders of the New Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the New
Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all New Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at the Stated Maturity within one year, and the Company deposits or causes to be
deposited with the Debenture Trustee funds, in trust, for the purpose and in an
amount sufficient to pay and discharge the entire indebtedness on the New Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal (and premium, if any) and interest to the date
of the deposit or to the Stated Maturity, as the case may be, then the Indenture
will cease to be of further effect (except as to the Company's obligations to
pay all other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Company will be
deemed to have satisfied and discharged the Indenture.
SUBORDINATION
The New Junior Subordinated Debentures will be subordinate and junior in
right of payment, to the extent set forth in the Indenture, to all Senior
Indebtedness (as defined below) of the Company. If the Company defaults in the
payment of any principal, premium, if any, or interest, if any, or any other
amount payable on any Senior Indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for redemption or by declaration of
acceleration or otherwise, then, unless and until such default has been cured or
waived or has ceased to exist or all Senior Indebtedness has been paid, no
direct or indirect payment (in cash, property, securities, by setoff or
otherwise) may be made or agreed to be made on the New Junior Subordinated
Debentures, or in respect of any redemption, repayment, retirement, purchase or
other acquisition of any of the New Junior Subordinated Debentures.
As used herein, "Senior Indebtedness" means, whether recourse is to all or
a portion of the assets of the Company and whether or not contingent, (i) every
obligation of the Company for money borrowed; (ii) every obligation of the
Company evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of the Company with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of the Company; (iv) every obligation of the Company issued or
assumed as the deferred purchase price of property services (but excluding trade
accounts payable or accrued liabilities arising
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in the ordinary course of business); (v) every capital lease obligation of the
Company; (vi) every obligation of the Company for claims (as defined in Section
101(4) of the United States Bankruptcy Code of 1978, as amended) in respect of
derivative products such as interest and foreign exchange rate contracts,
commodity contracts and similar arrangements; and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another person and all dividends
of another person the payment of which, in either case, the Company has
guaranteed or is responsible or liable, directly or indirectly, as obligor or
otherwise; without limiting the generality of the foregoing, Senior Indebtedness
shall include indebtedness incurred pursuant to the Short-Term Borrowing
Agreement dated February 3, 1997 between the Company and the Bank. "Senior
Indebtedness" shall not include (i) any obligations which, by their terms, are
expressly stated to rank pari passu in right of payment with, or to not be
superior in right of payment to, the New Junior Subordinated Debentures, (ii)
any Senior Indebtedness of the Company which when incurred and without respect
to any election under Section 1111(b) of the United States Bankruptcy Code of
1978, as amended, was without recourse to the Company, (iii) any Senior
Indebtedness of the Company to any of its subsidiaries, (iv) Senior Indebtedness
to any executive officer or director of the Company, or (v) any indebtedness in
respect of debt securities issued to any trust, or a trustee of such trust,
partnership or other entity affiliated with the Company that is a financing
entity of the Company in connection with the issuance of such financing entity
of securities that are similar to the Capital Securities.
In the event of (i) certain events of bankruptcy, dissolution or
liquidation of the Company or the holder of the Common Securities, (ii) any
proceeding for the liquidation, dissolution or other winding up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (iii) any assignment by the Company for the benefit of creditors or
(iv) any other marshalling of the assets of the Company, all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made on account of the
New Junior Subordinated Debentures. In such event, any payment or distribution
on account of the New Junior Subordinated Debentures, whether in cash,
securities or other property, that would otherwise (but for the subordination
provisions) be payable or deliverable in respect of the New Junior Subordinated
Debentures will be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) has been paid in full.
In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the holders of New Junior
Subordinated Debentures, together with the holders of any obligations of the
Company ranking on a parity with the New Junior Subordinated Debentures, will be
entitled to be paid from the remaining assets of the Company the amounts at the
time due and owing on the New Junior Subordinated Debentures and such other
obligations before any payment or other distribution, whether in cash, property
or otherwise, will be made on account of any capital stock or obligations of the
Company ranking junior to the New Junior Subordinated Debentures and such other
obligations. If any payment or distribution on account of the New Junior
Subordinated Debentures of any character or any security, whether in cash,
securities or other property is received by any holder of any New Junior
Subordinated Debentures in contravention of any of the terms hereof and before
all the Senior Indebtedness has been paid in full, such payment or distribution
or security will be received in trust for the benefit of, and must be paid over
or delivered and transferred to, the holders of the Senior Indebtedness at the
time outstanding in accordance with the priorities then existing among such
holders for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all such Senior Indebtedness in full. By
reason of such subordination, in the event of the insolvency of the Company,
holders of Senior Indebtedness may receive more, ratably, and holders of the New
Junior Subordinated Debentures may receive less, ratably, than the other
creditors of the Company. Such subordination will not prevent the occurrence of
any Event of Default in respect of the New Junior Subordinated Debentures.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Company. The Company expects from time
to time to incur additional indebtedness constituting Senior Indebtedness.
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INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee, other than during the occurrence and continuance of
a default by the Company in performance of its obligations under the New Junior
Subordinated Debenture, is under no obligation to exercise any of the powers
vested in it by the Indenture at the request of any holder of New Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities that might be incurred thereby. The
Debenture Trustee is not required to expend or risk its own funds or otherwise
incur personal financial liability in the performance of its duties if the
Debenture Trustee reasonably believes that repayment or adequate indemnity is
not reasonably assured to it.
Bankers Trust Company, the Debenture Trustee, may serve from time to time
as trustee under other indentures or trust agreements with the Company or its
subsidiaries relating to other issues of their securities. In addition, the
Company and certain of its affiliates may have other banking relationships with
Bankers Trust Company and its affiliates.
RESTRICTIONS ON TRANSFER
The New Junior Subordinated Debentures will be issued, and may be
transferred only, in blocks having an aggregate principal amount of not less
than $100,000 (100 New Junior Subordinated Debentures). Any such transfer of New
Junior Subordinated Debentures in a block having an aggregate principal amount
of less than $100,000 shall be deemed to be void and of no legal effect
whatsoever. Any such transferee shall be deemed not to be the holder of such New
Junior Subordinated Debentures for any purpose, including but not limited to the
receipt of payments on such New Junior Subordinated Debentures, and such
transferee shall be deemed to have no interest whatsoever in such New Junior
Subordinated Debentures.
GOVERNING LAW
The Indenture and the New Junior Subordinated Debentures will be governed
by and construed in accordance with the laws of the State of New York.
DESCRIPTION OF THE GUARANTEE
The Old Guarantee was executed and delivered by the Company concurrently
with the issuance by the Trust of the Old Capital Securities for the benefit of
the holders from time to time of the Capital Securities. As soon as is
practicable after the date hereof, the Company will exchange the Old Guarantee
for the Guarantee. This summary of the material 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, including the definitions
therein of certain terms. The Guarantee Trustee will hold the Guarantee for the
benefit of the holders of the Capital Securities.
GENERAL
Pursuant to the Guarantee, the Company will irrevocably and unconditionally
agree, to the extent set forth therein, to pay in full, to the holders of the
Capital Securities, the Guarantee Payments (as defined herein) (except to the
extent paid by the Issuer Trust), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer Trust may have or assert. The
following payments with respect to the Capital Securities, to the extent not
paid by the Issuer Trust (the "Guarantee Payments"), will be subject to the
Guarantee (without duplication): (i) any accrued and unpaid distributions which
are required to be paid on the Capital Securities, to the extent the Issuer
Trust shall have funds available therefor; (ii) the Redemption Price, to the
extent the Issuer Trust has funds available therefor, with respect to any
Capital Securities called for redemption by the Issuer Trust and (iii) upon
Liquidation of the Issuer Trust (other than in connection with the distribution
of the Subordinated Debentures to the holders of the Capital Securities in
exchange therefor), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid distributions on such Capital Securities to the date
of payment, to the extent the Issuer Trust has funds available therefor, and (b)
the amount of assets of the Issuer Trust remaining available for distribution to
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holders of such Capital Securities in liquidation of the Issuer Trust. The
Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of the Capital
Securities or by causing the Issuer Trust to pay such amounts to such holders.
The Guarantee will not apply to any payment of distributions except to the
extent the Issuer Trust shall have funds available therefor, which funds will
not be available except to the extent the Company has made payments of interest
or principal or other payments on the Subordinated Debentures purchased by the
Issuer Trust. See "Description of the New Junior Subordinated
Debentures -- Restrictions on Certain Payments; Certain Covenants of the
Company." The Guarantee, when taken together with the Company's obligations
under the Subordinated Debentures, the Trust Agreement and the Indenture,
including its obligations to pay costs, expenses, debts and other obligations of
the Issuer Trust (other than with respect to the Trust Securities), will provide
a full and unconditional guarantee on a subordinated basis by the Company of
payments due on the Capital Securities.
Because the Guarantee is a guarantee of payment and not of collection,
holders of the Capital Securities may proceed directly against the Company,
rather than having to proceed against the Issuer Trust before attempting to
collect from the Company, and the Company waives any right or remedy to require
that any action be brought against the Issuer Trust or any other person or
entity before proceeding against the Company. Such obligations will not be
discharged except by payment of the Guarantee Payments in full. The Guarantee
will be deposited with the Guarantee Trustee to be held for the benefit of the
holders of Capital Securities. Except as otherwise noted herein, the Guarantee
Trustee has the right to enforce the Guarantee on behalf of the holders of the
Capital Securities.
CERTAIN COVENANTS OF THE COMPANY UNDER THE GUARANTEE
In the Guarantee, the Company will covenant that, so long as any Capital
Securities remain outstanding, if the Company shall be in default under the
Guarantee or there shall have occurred and be continuing any event that would
constitute a Trust Agreement Event of Default, then (a) the Company shall not
declare or pay any dividend on, make a distribution with respect to, or redeem,
purchase or make a liquidation payment with respect to, any of the Company's
capital stock or rights to acquire such capital stock (other than (i) purchases
or acquisitions of shares of the Company's capital stock or rights to acquire
such capital stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans, (ii) as a result of a
reclassification of the Company's capital stock or rights to acquire such
capital stock or the exchange or conversion of one class or series of the
Company's capital stock or rights to acquire such capital stock for another
class or series of the Company's capital stock or rights to acquire such capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) dividends and
distributions made on the Company's capital stock or rights to acquire such
capital stock with the Company's capital stock or rights to acquire such capital
stock, or (v) any declaration of a dividend in connection with the
implementation of a shareholder 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), or make any guarantee payments (other than payments under the
Guarantee) with respect to the foregoing and (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company that rank pari passu with or
junior to the Subordinated Debentures.
MODIFICATION OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of the Capital Securities in any material respect (in which case no
vote of such holders will be required), the Guarantee may be amended only with
the prior approval of the holders of not less than a majority in liquidation
amount of the outstanding Capital Securities. 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.
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TERMINATION
The Guarantee will terminate as to the Capital Securities (a) upon full
payment of the Redemption Price of all Capital Securities, (b) upon distribution
of the Subordinated Debentures to the holders of the Capital Securities or (c)
upon full payment of the amounts payable in accordance with the Trust Agreement
upon liquidation of the Issuer Trust. 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 such
Capital Securities or the Guarantee.
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 a majority in liquidation amount of the Capital Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the Guarantee or
to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee. A holder of record of the Capital Securities may
institute a legal proceeding directly against the Company to enforce the
Guarantee Trustee's rights under the Guarantee, without first instituting a
legal proceeding against the Issuer Trust, the Guarantee Trustee or any other
person or entity. Pursuant to the Guarantee, the Company will waive any right or
remedy to require that any action be brought first against the Issuer Trust or
any other person or entity before proceeding directly against the Company.
STATUS OF THE GUARANTEE
The Company's obligations under the Guarantee are subordinate and junior in
right of payment to all present and future Senior Indebtedness of the Company
and are also effectively subordinated to claims of creditors of the Company's
subsidiaries. The terms of the Capital Securities provide that each holder of
the Capital Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Guarantee relating thereto. Because the
Company is a bank holding company, the right of the Company to participate in
any distribution of assets of any of its subsidiaries 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. The Guarantee does
not limit the incurrence or issuance of other secured or unsecured debt of the
Company, including Senior Indebtedness of the Company, under any indenture that
the Company may enter into in the future or otherwise.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee, undertakes to perform only such duties as are specifically set
forth in such Guarantee and, after default, shall exercise such of the rights
and powers vested in it by such Guarantee, and use the same degree of care and
skill in their exercise, as a prudent individual would exercise or use in the
conduct of his or her own affairs. Subject to such provisions, the Trustee is
under no obligation to exercise any of the powers vested in it by the Guarantee
at the request of any holder of Capital Securities, unless offered reasonable
indemnity against the costs, expenses and liabilities which might be incurred
thereby.
The Company and certain of its affiliates maintain a banking relationship
with the Guarantee Trustee and its affiliates.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York, without regard to conflict of laws principles.
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RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Issuer Trust has funds available for such payment) 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
Subordinated Debentures, the Indenture, the Trust Agreement and the Guarantee
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of Distributions and other amounts due on the Capital Securities. No
single document standing alone or operating in conjunction with fewer than all
the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer Trust's obligations in
respect of the Capital Securities. If and to the extent that the Company does
not make payments on the Junior Subordinated Debentures, the Issuer Trust will
not have sufficient funds to pay Distributions or other amounts due on the
Capital Securities. The Guarantee does not cover payment of amounts payable with
respect to the Capital Securities when the Issuer Trust does not have sufficient
funds to pay such amounts. 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 the Company's obligations under Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Capital Securities held by such holder.
The obligations of the Company under the Subordinated Debentures and the
Guarantee are subordinate and junior in right of payment to all Senior
Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments are made when due on the Subordinated Debentures, such
payments will be sufficient to cover Distributions and other payments
distributable 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 stated Liquidation Amount of the Capital Securities and Common
Securities; (ii) the interest rate and interest and other payment dates on the
Subordinated Debentures will match the Distribution rate, Distribution Dates and
other payment dates for the Capital Securities; (iii) the Company will pay for
all and any costs, expenses and liabilities of the Issuer Trust except the
Issuer Trust's obligations to holders of the Trust Securities; and (iv) the
Trust Agreement further provides that the Issuer Trust will not engage in any
activity that is not consistent with the limited purposes of the Issuer Trust.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder
against and to the extent the Company has theretofore made, or is concurrently
on the date of such payment making, a payment under the Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security 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, the Issuer Trust
or any other person or entity. See "Description of Guarantee."
A default or event of default under any Senior Indebtedness of the Company
would not constitute a default or Event of Default in respect of the Capital
Securities. However, in the event of payment defaults under, or acceleration of,
Senior Indebtedness of the Company, the subordination provisions of the
Subordinated Indenture provide that no payments may be made in respect of the
Subordinated Debentures until such Senior Indebtedness has been paid in full or
any payment default thereunder has been cured or waived. See "Description of the
New Subordinated Debentures -- Subordination."
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LIMITED PURPOSE OF ISSUER TRUST
The Capital Securities represent preferred undivided beneficial interests
in the assets of the Issuer Trust, and the Issuer Trust exists for the sole
purpose of issuing its Capital Securities and Common Securities and investing
the proceeds thereof in Subordinated Debentures. A principal difference between
the rights of a holder of a Capital Security and a holder of a Subordinated
Debenture is that a holder of a Subordinated Debenture is entitled to receive
from the Company payments on Subordinated Debentures held, while a holder of
Capital Securities is entitled to receive Distributions or other amounts
distributable with respect to the Capital Securities from the Issuer Trust (or
from the Company under the Guarantee) only if and to the extent the Issuer Trust
has funds available for the payment of such Distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution of the Issuer Trust, other
than any such dissolution involving the distribution of the Subordinated
Debentures, after satisfaction of liabilities to creditors of the Issuer Trust
as required by applicable law, the holders of the Capital Securities will be
entitled to receive, out of assets held by the Issuer Trust, the Liquidation
Distribution in cash. See "Description of Capital Securities -- Liquidation
Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation or
bankruptcy of the Company, the Issuer Trust, as registered holder of the
Subordinated Debentures, would be a subordinated creditor of the Company,
subordinated and in right of payment to all Senior Indebtedness as set forth in
the Junior Subordinated Indenture, but entitled to receive payment in full of
all amounts payable with respect to the Junior Subordinated Debentures before
any shareholders of the Company receive payments or distributions. Since the
Company is the guarantor under the Guarantee and has agreed under the Indenture
to pay for all costs, expenses and liabilities of the Issuer Trust (other than
the Issuer Trust's obligations to the holders of the Trust Securities), the
positions of a holder of the Capital Securities and a holder of such
Subordinated Debentures relative to other creditors and to shareholders of the
Company in the event of liquidation or bankruptcy of the Company are expected to
be substantially the same.
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
In the opinion of Arnold & Porter, in its capacity as special tax counsel
to the Company ("Tax Counsel"), the discussion of United States federal income
taxation which follows summarizes the principal material United States federal
income tax consequences of the Exchange Offer and of the ownership and
disposition of the Capital Securities.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations thereunder, and administrative and judicial
interpretations thereof, each as of the date hereof, all of which are subject to
change, possibly on a retroactive basis. The authorities on which this summary
is based are subject to various interpretations, and the opinions of Tax Counsel
are not binding on the Internal Revenue Service ("IRS") or the courts, either of
which could take a contrary position. Moreover, no rulings have been or will be
sought from the IRS with respect to the transactions described herein.
Accordingly, there can be no assurance that the IRS will not challenge the
opinions expressed herein or that a court would not sustain such a challenge.
Except as otherwise stated, this summary deals only with the Capital
Securities held as a capital asset by a holder who or which (i) purchased the
Old Capital Securities upon original issuance at their original offering price
and (ii) is a US Holder (as defined below). This summary does not address all
the tax consequences that may be relevant to a US Holder, nor does it address
the tax consequences, except as stated below, to holders that are not US Holders
or to holders that may be subject to special tax treatment (such as banks,
thrift institutions, real estate investment trusts, regulated investment
companies, insurance companies, brokers and dealers in securities or currencies,
certain securities traders, other financial institutions, tax-exempt
organizations, persons holding the Capital Securities as a position in a
"straddle," as part of a "hedging," "conversion" or other integrated investment,
persons having a functional currency other than the U.S. Dollar
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and certain United States expatriates). Further, this summary does not address
(a) the income tax consequences to shareholders in, or partners or beneficiaries
of, a holder of the Capital Securities, (b) the United States federal
alternative minimum tax consequences of the purchase, ownership or disposition
of the Capital Securities, or (c) any state, local or foreign tax consequences
of the purchase, ownership and disposition of Capital Securities.
A "US Holder" generally is a holder of the Capital Securities who or which
is (i) a citizen or individual resident (or is treated as a citizen or
individual resident) of the United States for income tax purposes, (ii) a
corporation or partnership created or organized (or treated as created or
organized for income tax purposes) in or under the laws of the United States or
any political subdivision thereof, (iii) an estate the income of which is
includible in its gross income for United States federal income tax purposes
without regard to its source, or (iv) a trust if (a) a court within the United
States is able to exercise primary supervision over the administration of the
trust and (b) one or more United States trustees have the authority to control
all substantial decisions of the trust.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE EXCHANGE OFFER AND OF THE OWNERSHIP AND DISPOSITION
OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE
CAPITAL SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS SEE "DESCRIPTION OF
THE NEW CAPITAL SECURITIES -- REDEMPTION."
US HOLDERS
CHARACTERIZATION OF THE ISSUER TRUST
In connection with the Exchange Offer, Tax Counsel has rendered its opinion
that, under then current law and based on the representations, facts and
assumptions set forth in this Prospectus, and assuming full compliance with the
terms of the Trust Agreement (and other documents), and based on certain
assumptions and qualifications referenced in such counsel's written opinion, the
Issuer Trust will be characterized for United States federal income tax purposes
as a grantor trust and will not be characterized as an association taxable as a
corporation for such purposes. Accordingly, for United States federal income tax
purposes, each holder of Capital Securities generally will be considered the
owner of an undivided interest in the Subordinated Debentures owned by the
Issuer Trust, and each US Holder will be required to include all income or gain
recognized for United States federal income tax purposes with respect to its
allocable share of the Subordinated Debentures on its own income tax return.
THE EXCHANGE
An exchange of Old Capital Securities for New Capital Securities pursuant
to the Exchange Offer will not constitute a taxable event for federal income tax
purposes. As a result, US Holders who exchange their Old Capital Securities for
New Capital Securities should not recognize any income, gain or loss for federal
income tax purposes with respect to such exchange. An exchanging US Holder will
have the same adjusted basis and holding period in the New Capital Securities as
it had in the Old Capital Securities immediately before the exchange.
CHARACTERIZATION OF THE SUBORDINATED DEBENTURES
In connection with the Exchange Offer, Tax Counsel has rendered its opinion
that, under then current law and based on the representations, facts and
assumptions set forth in this Prospectus, and assuming full compliance with the
terms of the Indenture (and other documents), and based on certain assumptions
and qualifications referenced in such counsel's written opinion, the New Junior
Subordinated Debentures will be characterized for United States federal income
tax purposes as debt of the Company. The Company and the
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Issuer Trust have agreed to treat the New Junior Subordinated Debentures as
indebtedness for all United States federal income tax purposes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under the terms of the Subordinated Debentures, the Company has the option
to defer payments of interest from time to time by extending the interest
payment period for a period not exceeding 10 consecutive semi-annual periods,
but not beyond the maturity of the Subordinated Debentures. Recently issued
Treasury regulations under Section 1273 of the Code provide that debt
instruments like the Subordinated Debentures will not be considered issued with
OID by reason of the Company's option to defer payments of interest if the
likelihood of deferral is "remote."
The Company has concluded, and this discussion assumes, that, as of the
date of original issue of the Old Junior Subordinated Debentures, the likelihood
of exercise of that option was "remote" within the meaning of the applicable
regulations, in part because exercising that option would prevent the Company
from declaring dividends on its stock and would prevent the Company from making
any payments with respect to debt securities that rank pari passu with or junior
to the Subordinated Debentures. Therefore, the Subordinated Debentures should
not be treated as issued with OID by reason of the Company's deferral option.
Moreover, the Company has determined that the Old Junior Subordinated Debentures
were not otherwise issued with OID. Consequently, stated interest on the
Subordinated Debentures will generally be taxable to a US Holder as ordinary
income when paid or accrued in accordance with that holder's method of
accounting for income tax purposes. It should be noted, however, that these
regulations may in the future be analyzed and interpreted by the Service in
rulings or other published documents. Accordingly, it is possible that the
Service could take a position contrary to the interpretation described herein.
In the event the Company exercises its option to defer payments of
interest, the Subordinated Debentures would be treated as reissued for OID
purposes and the sum of the remaining interest payments (and any de minimis OID)
on the Subordinated Debentures would thereafter be treated as OID, which would
accrue, and be includible in a US Holder's taxable income, on an economic
accrual basis (regardless of the US Holder's method of accounting for income tax
purposes) over the remaining term of the Subordinated Debentures (including any
period of interest deferral), without regard to the timing of payments under the
Subordinated Debentures. (Subsequent distributions of interest on the
Subordinated Debentures generally would not be taxable.) The amount of OID that
would accrue in any period would generally equal the amount of interest that
accrued on the Subordinated Debentures in that period at the stated interest
rate. Consequently, during any period of interest deferral, US Holders will
include OID in gross income in advance of the receipt of cash, and a US Holder
which disposes of a Capital Security prior to the record date for payment of
distributions on the Subordinated Debentures following that period will be
subject to income tax on OID accrued through the date of disposition (and not
previously included in income), but will not receive cash from the Issuer Trust
with respect to that OID.
If the Company's option to defer payments of interest were not treated as
remote, the Subordinated Debentures would be treated as initially issued with
OID in an amount equal to the aggregate stated interest (plus any de minimis
OID) over the term of the Subordinated Debentures. That OID would generally be
includible in a US Holder's taxable income, over the term of the Subordinated
Debentures, on an economic accrual basis.
CHARACTERIZATION OF INCOME
Because the income underlying the Capital Securities will not be
characterized as dividends for income tax purposes, corporate holders of the
Capital Securities will not be entitled to a dividends-received deduction for
any income recognized with respect to the Capital Securities.
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MARKET DISCOUNT AND BOND PREMIUM
Holders of Capital Securities may be considered to have acquired their
undivided interests in the Subordinated Debentures with market discount, premium
or acquisition premium (as each phase is defined for United States federal
income tax purposes).
RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
Under certain circumstances described herein (See "Description of the New
Capital Securities -- Liquidation Distribution Upon Dissolution"), the Company
will have the right to distribute the Subordinated Debentures to holders in
exchange for the Capital Securities and in liquidation of the Issuer Trust.
Except as discussed below, such a distribution would not be a taxable event for
United States federal income tax purposes, and each US Holder would have an
aggregate adjusted basis in its Subordinated Debentures for United States
federal income tax purposes equal to such holder's aggregate adjusted basis in
its Capital Securities. For United States federal income tax purposes, a US
Holder's holding period in the Subordinated Debentures received in such a
liquidation of the Issuer Trust would include the period during which the
Capital Securities were held by the holder. If, however, the relevant event is a
Tax Event which results in the Issuer Trust being treated as an association
taxable as a corporation, the distribution would likely constitute a taxable
event to US Holders of the Capital Securities for United States federal income
tax purposes.
Under certain circumstances described herein (see "Description of the New
Capital Securities" and "Description of the New Junior Subordinated
Debentures -- Redemption"), the Subordinated Debentures may be redeemed for cash
and the proceeds of such redemption distributed to holders in redemption of
their Capital Securities. Such a redemption would be taxable for United States
federal income tax purposes, and a US Holder would recognize gain or loss as if
it had sold the Capital Securities for cash. See "-- Sales of Capital
Securities" below.
SALES OF CAPITAL SECURITIES
A US Holder that sells Capital Securities will recognize gain or loss equal
to the difference between its adjusted basis in the Capital Securities and the
amount realized on the sale of such Capital Securities. A US Holder's adjusted
basis in the Capital Securities generally will be its initial purchase price,
increased by OID previously included (or currently includible) in such holder's
gross income to the date of disposition, and decreased by payments received on
the Capital Securities (other than any interest received with respect to the
period prior to the effective date of the Company's first exercise of its option
to defer payments of interest). Any such gain or loss generally will be capital
gain or loss, and generally will be a long-term capital gain or loss if the
Capital Securities have been held for more than one year.
Tax rates on long-term capital gains received by individual US Holders vary
depending on each US Holder's income and holding period for the Capital
Securities. US Holders that are individuals should contact their own tax
advisors for more information or for the capital gains rate applicable to a
specific Capital Security.
A holder who disposes of his Capital Securities between record dates for
payments of distributions thereon will be required to include accrued but unpaid
interest (or OID) on the Subordinated Debentures through the date of disposition
in its taxable income for United States federal income tax purposes
(notwithstanding that the holder may receive a separate payment from the
purchaser with respect to accrued interest), and to deduct that amount from the
sales proceeds received (including the separate payment, if any, with respect to
accrued interest) for the Capital Securities (or as to OID only, to add such
amount to such holder's adjusted tax basis in its Capital Securities). To the
extent the selling price is less than the holder's adjusted tax basis (which
will include accrued but unpaid OID, if any), a holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes.
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NON-US HOLDERS
The following discussion applies to a Holder who is not a US Holder (a
"Non-US Holder").
Payments to a holder of a Capital Security which is a Non-US Holder will
generally not be subject to withholding of income tax, provided that (a) the
beneficial owner of the Capital Security does not (directly or indirectly,
actually or constructively) own 10% or more of the total combined voting power
of all classes of stock of the Company entitled to vote, (b) the beneficial
owner of the Capital Security is not a controlled foreign corporation that is
related to the Company through stock ownership, and (c) either (i) the
beneficial owner of the Capital Securities certifies to the Issuer Trust or its
agent, under penalties of perjury, that it is a Non-US Holder and provides its
name and address, or (ii) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business (a "Financial Institution"), and holds the Capital
Security in such capacity, certifies to the Issuer Trust or its agent, under
penalties of perjury, that such a statement has been received from the
beneficial owner by it or by another Financial Institution between it and the
beneficial owner in the chain of ownership, and furnishes the Issuer Trust or
its agent with a copy thereof.
A Non-US Holder of a Capital Security will generally not be subject to
withholding of income tax on any gain realized upon the sale or other
disposition of a Capital Security.
A Non-US Holder which holds the Capital Securities in connection with the
active conduct of a United States trade or business will be subject to income
tax on all income and gains recognized with respect to its proportionate share
of the Subordinated Debentures.
INFORMATION REPORTING
In general, information reporting requirements will apply to payments made
on, and proceeds from the sale of, the Capital Securities held by a noncorporate
US Holder within the United States. In addition, payments made on, and payments
of the proceeds from the sale of, the Capital Securities to or through the
United States office of a broker are subject to information reporting unless the
holder thereof certifies as to its non-United States status or otherwise
establishes an exemption from information reporting and backup withholding. See
"-- Backup Withholding." Taxable income on the Capital Securities for a calendar
year should be reported to US Holders on Forms 1099 by the following January
31st.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31% unless the holder complies with
certain identification or exemption requirements. Any amounts so withheld will
be allowed as a credit against the holder's income tax liability, or refunded,
provided the required information is provided to the Service.
* * *
THE PRECEDING DISCUSSION IS ONLY A SUMMARY AND DOES NOT ADDRESS THE
CONSEQUENCES TO A PARTICULAR HOLDER OF THE EXCHANGE OFFER, AND OF THE OWNERSHIP
AND DISPOSITION OF THE CAPITAL SECURITIES. HOLDERS OF THE CAPITAL SECURITIES ARE
URGED TO CONTACT THEIR OWN TAX ADVISORS TO DETERMINE THEIR PARTICULAR TAX
CONSEQUENCES.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own account
in connection with the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by Participating Broker-Dealers during the period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities. The Company and the Issuer Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales
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of such New Capital Securities for a period of ninety (90) days after the
Expiration Date (subject to extension under certain limited circumstances
described herein). See "The Exchange Offer -- Resales of New Capital
Securities." Neither the Company nor the Issuer Trust will receive any cash
proceeds from the issuance of the New Capital Securities offered hereby. New
Capital Securities received by broker-dealers for their own accounts in
connection with the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Capital Securities or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer and/or the purchasers of any such New Capital Securities. Any
broker-dealer that resells New Capital Securities that were received by it for
its own account in connection with the Exchange Offer and any broker or dealer
that participates in a distribution of such New Capital Securities may be deemed
to be an "underwriter" within the meaning of the Securities Act, and any profit
on any such resale of New Capital Securities and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of ninety (90) days after the date on which the Exchange Offer
is consummated, the Company and the Issuer Trust will promptly send additional
copies of this Prospectus and any amendment or supplement to this Prospectus to
any broker-dealer that requests such documents in the Letter of Transmittal. The
Company and the Trust have agreed to pay all expenses incident to the Exchange
Offer (including the expenses of one counsel for the holders of the Old Capital
Securities) other than commissions or concessions of any brokers or dealers and
will indemnify the holders of the Old Capital Securities (including any broker-
dealers) against certain liabilities, including liabilities under the Securities
Act.
BENEFIT PLAN CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Capital Securities (including Old and New Capital Securities).
Accordingly, among other factors, the fiduciary should consider whether the
investment would satisfy the prudence and diversification requirements of ERISA
and would be consistent with the documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well
as individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or "disqualified
persons" under the Code ("Parties in Interest") with respect to such Plan. A
violation of these "prohibited transaction" rules may result in an excise tax or
other liabilities under ERISA and/or Section 4975 of the Code for such persons,
unless exemptive relief is available under an applicable statutory or
administrative exemption. Employee benefit plans that are governmental plans (as
defined in Section 3(32) of ERISA), certain church plans (as defined in Section
3(33) of ERISA) and foreign plans (as described in Section 4(b)(4) of ERISA) are
not subject to the requirements of ERISA or Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Issuer Trust would be deemed
to be "plan assets" of a Plan for purposes of ERISA and Section 4975 of the Code
if "plan assets" of the Plan were used to acquire an equity interest in such
Issuer Trust and no exception were applicable under the Plan Assets Regulation.
An "equity interest" is defined under the Plan Assets Regulation as any interest
in an entity other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Issuer Trust would not be deemed to be "plan assets" of investing
Plans if, immediately after the most recent acquisition of any
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equity interest in the Issuer Trust, less than 25% of the value of each class of
equity interests in the Issuer Trust were held by Plans, other employee benefit
plans not subject to ERISA or Section 4975 of the Code (such as governmental,
church and foreign plans), and entities holding assets deemed to be "plan
assets" of any Plan (collectively, "Benefit Plan Investors"). No assurance can
be given that the value of the Capital Securities held by Benefit Plan Investors
will be less than 25% of the total value of such Capital Securities, and no
monitoring or other measures will be taken with respect to the satisfaction of
the conditions to this exception. All of the Common Securities will be purchased
and held by the Company.
Under another exception contained in the Plan Assets Regulation, if New
Capital Securities received as a result of the Exchange Offer were to qualify as
"publicly offered securities" under the Plan Assets Regulation, the assets of
the Issuer Trust would not be deemed to be "plan assets" by reason of a Plan's
acquisition or holding of such securities. The New Capital Securities would
qualify as "publicly offered securities" if, among other things, they are
offered pursuant to an effective registration statement, are owned by 100 or
more investors independent of the issuer and each other at the time of the
offering, and are subsequently registered under the Exchange Act. It is expected
that the 100 investor requirement will not be satisfied and that the New Capital
Securities will not be registered under the Exchange Act.
Certain transactions involving the Issuer Trust could be deemed to
constitute direct or indirect prohibited transactions under ERISA and Section
4975 of the Code with respect to a Plan if the Capital Securities were acquired
with "plan assets" of such Plan and assets of the Issuer Trust were deemed to be
"plan assets" of Plans investing in the Issuer Trust. For example, if the
Company is a Party in Interest with respect to an investing Plan (either
directly or by reason of its ownership of its subsidiaries), extensions of
credit between the Company and the Issuer Trust (as represented by the
Subordinated Debentures and the Guarantees) would likely be prohibited by
Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the Code, unless
exemptive relief were available under an applicable exemption (see below).
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the Capital Securities, assuming that
assets of the Issuer Trust were deemed to be "plan assets" of Plans investing in
the Issuer Trust (see above). Those class exemptions are PTCE 96-23 (for certain
transactions determined by in-house asset managers), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 91-38 (for
certain transactions involving bank collective investment funds), PTCE 90-1 (for
certain transactions involving insurance company separate accounts), and PTCE
84-14 (for certain transactions determined by independent qualified asset
managers).
Because the Capital Securities may be deemed to be equity interests in the
Issuer Trust for purposes of applying ERISA and Section 4975 of the Code, the
Capital Securities may not be purchased or held by any Plan, any entity whose
underlying assets include "plan assets" by reason of any Plan's investment in
the entity (a "Plan Asset Entity") or any person investing "plan assets" of any
Plan, unless such purchase or holding is covered by the exemptive relief
provided by PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption. If a purchaser or holder of the Capital Securities that is a Plan or
a Plan Asset Entity elects to rely on an exemption other than PTCE 96-23, 95-60,
91-38, 90-1 or 84-14, the Company and the Issuer Trust may require a
satisfactory opinion of counsel or other evidence with respect to the
availability of such exemption for such purchase and holding. Any purchaser or
holder of the Capital Securities or any interest therein will be deemed to have
represented by its purchase and holding thereof that either (a) it is not a Plan
or a Plan Asset Entity and is not purchasing such securities on behalf of or
with "plan assets" of any Plan or (b) (i) it is covered by the exemptive relief
provided by PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption with respect to such purchase or holding, (ii) the Company and the
Administrators are not "fiduciaries," within the meaning of Section 3(21) of
ERISA and the regulations thereunder, with respect to its interest in the
Capital Securities or the Subordinated Debentures, and (iii) in purchasing the
Capital Securities it approves the purchase and holding of the Subordinated
Debentures and the appointment and retention of the Issuer Trustees.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering
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purchasing the Capital Securities on behalf of or with "plan assets" of any Plan
consult with their counsel regarding the potential consequences if the assets of
the Issuer Trust were deemed to be "plan assets" and the availability of
exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
Governmental plans and certain church plans are not subject to ERISA and
are also not subject to the prohibited transaction provisions of Section 4975 of
the Code. However, state laws or regulations governing the investment and
management of the assets of such plans may contain fiduciary and prohibited
transaction provisions similar to those under ERISA and the Code discussed
above. Accordingly, fiduciaries of governmental plans and church plans, in
consultation with their advisers, should consider the impact of their respective
state laws on investments in the Capital Securities, and the considerations
discussed above, to the extent applicable.
SUPERVISION, REGULATION AND OTHER MATTERS
The following information is not intended to be an exhaustive description
of the statutes and regulations applicable to the Company. The discussion is
qualified in its entirety by reference to all particular statutory or regulatory
provisions. Additional information regarding supervision and regulation is
included in the documents incorporated herein by reference. See "Available
Information."
The business of the Company is influenced by prevailing economic conditions
and governmental policies, both foreign and domestic. The actions and policy
directives of the Federal Reserve determine to a significant degree the cost and
the availability of funds obtained from money market sources for lending and
investing. The Federal Reserve's policies and regulations also influence,
directly and indirectly, the rates of interest paid by commercial banks on their
time and savings deposits. The nature and impact on the Company of future
changes in economic conditions and monetary and fiscal policies, both foreign
and domestic, are not predictable.
The Company is subject to supervision and examination by federal bank
regulatory authorities. As a bank holding company regulated under the BHC Act,
the Company's primary bank regulatory authority is the Federal Reserve. Bank
holding companies are expected to serve as a source of strength to their
subsidiary banks under the Federal Reserve's regulations and policies. As a
state-chartered bank that is a member of the Federal Reserve System, the Bank's
primary federal bank regulator is the Federal Reserve.
The federal bank regulatory authorities have each adopted risk-based
capital guidelines to which the Company and the Bank are subject. These
guidelines are based on an international agreement developed by the Basle
Committee on Banking Regulations and Supervisory Practices, which consists of
representatives of central banks and supervisory authorities in 12 countries
including the United States of America. The guidelines establish a systematic
analytical framework that makes regulatory capital requirements more sensitive
to differences in risk profiles among banking organizations, takes off-balance
sheet exposures into explicit account in assessing capital adequacy and
minimizes disincentives to holding liquid, low-risk assets. Risk-based assets
are determined by allocating assets and specified off-balance sheet commitments
and exposures into four weighted categories, with higher levels of capital being
required for the categories perceived as representing greater risk.
The Bank is required to maintain a minimum total risk-based ratio of 8%, of
which half (4%) must be Tier 1 capital. In addition, the federal bank regulators
established leverage ratio (Tier 1 capital to total adjusted average assets)
guidelines providing for a minimum leverage ratio of 3% for banks meeting
certain specified criteria, including excellent asset quality, high liquidity,
low interest rate exposure and the highest regulatory rating. Institutions not
meeting these criteria are expected to maintain a ratio which exceeds the 3%
minimum by at least 100 to 200 basis points. The federal bank regulatory
authorities may, however, set higher capital requirements when a bank's
particular circumstances warrant.
From time to time, the federal bank regulatory authorities, including the
Federal Reserve, propose amendments to and issue interpretations of their
risk-based capital guidelines and reporting instructions, which can affect
reported capital ratios and net risk-adjusted assets. Effective June 26, 1996,
the Federal Reserve, the Office of the Comptroller of the Currency and the
Federal Deposit Insurance Corporation
69
<PAGE> 73
("FDIC") issued a joint policy statement that provides guidance on sound
practices for interest rate risk management and describes critical factors
affecting the agencies' evaluation of a bank's interest rate risk when making a
determination of capital adequacy.
The federal banking agencies possess broad powers to take corrective action
as deemed appropriate for an insured depository institution and its holding
companies. The extent of these powers depends upon whether the institution in
question is considered "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Generally, as an institution is deemed to be less well
capitalized, the scope and severity of the agencies' powers increase. The
agencies' corrective powers can include, among other things, requiring an
insured financial institution to adopt a capital restoration plan which cannot
be approved unless guaranteed by the institution's parent holding company;
placing limits on asset growth and restrictions on activities; placing
restrictions on transactions with affiliates; restricting the interest rates the
institution may pay on deposits; prohibiting the institution from accepting
deposits from correspondent banks; prohibiting the payment of principal or
interest on subordinated debt; prohibiting the holding company from making
capital distributions without prior regulatory approval; and, ultimately,
appointing a receiver for the institution. Business activities may also be
influenced by an institution's capital classification. For instance, only a
"well capitalized" depository institution may accept brokered deposits without
prior regulatory approval and only an "adequately capitalized" depository
institution may accept brokered deposits with prior regulatory approval. At June
30, 1997, the Bank exceeded the required capital ratios for classification as a
"well capitalized" bank.
The deposits of the Bank are insured by the FDIC and are subject to FDIC
insurance assessments. The amount of FDIC assessments paid by individual insured
depository institutions is based on their relative risk as measured by
regulatory capital ratios and certain other factors. Currently, the Bank is not
assessed any premiums for deposits insured by either the Bank Insurance Fund or
the Savings Association Insurance Fund ("SAIF"). The Bank, however, continues to
pay premiums based on deposit levels to service debt on Financing Corporation
bonds.
Under federal law, a financial institution insured by the FDIC under common
ownership with a failed institution can be required to indemnify the FDIC for
its losses resulting from the insolvency of the failed institution, even if such
indemnification causes the affiliated institution also to become insolvent. As a
result, the Company could, under certain circumstances, be obligated for the
liabilities of its affiliates that are FDIC-insured institutions. In addition,
if any insured depository institution becomes insolvent and the FDIC is
appointed its conservator or receiver, the FDIC may disaffirm or repudiate any
contract or lease to which such institution is a party, the performance of which
is determined to be burdensome and the disaffirmance or repudiation of which is
determined to promote the orderly administration of the institution's affairs.
If Federal law were construed to permit the FDIC to apply these provisions to
debt obligations of an insured depository institution, the result could be that
such obligations would be prepaid without premium. Federal law also accords the
claims of a receiver of an insured depository institution for administrative
expenses and the claims of holders of deposit liabilities of such an institution
priority over the claims of general unsecured creditors of such an institution
in the event of a liquidation or other resolution of such institution.
The BHC Act currently permits adequately capitalized and adequately managed
bank holding companies from any state to acquire banks and bank holding
companies located in any other state, subject to certain conditions. Effective
June 1, 1997, the Company has the ability, subject to certain restrictions,
including state opt-out provisions, to acquire by acquisition or merger branches
outside of its home state. States may affirmatively opt-in earlier. Competition
may increase as banks branch across state lines and enter new markets.
70
<PAGE> 74
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Trust
Securities will be passed upon for the Trust by Richards, Layton & Finger,
special Delaware counsel to the Issuer Trust and the Company. Certain matters of
law relating to the validity of the Subordinated Debentures, the Guarantee and
related matters will be passed upon for the Company by Alexander M. Donaldson,
Esq., General Counsel of the Company. Certain United States federal income tax
matters will be passed upon for the Company and the Issuer Trust by Arnold &
Porter, special tax counsel for the Company and the Issuer Trust. As of October
30, 1997, Mr. Donaldson beneficially owned 600 shares of common stock of the
Company.
EXPERTS
The consolidated balance sheets as of December 31, 1996 and 1995 and the
consolidated statements of income, shareholders equity, and cash flows for each
of the three years in the period ended December 31, 1996 incorporated by
reference in the Company's Annual Report on Form 10-K, and the supplemental
consolidated balance sheets as of December 31, 1996 and 1995 and the
supplemental consolidated statements of income, changes in shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1996, giving retroactive effect to the merger consummated October 2, 1997, and
included in the Company's Form 8-K dated October 31, 1997, have been
incorporated herein by reference in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.
The consolidated balance sheets as of December 31, 1996 and 1995 of Bank of
Mecklenburg and the consolidated statements of income, shareholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1996, incorporated by reference in this Registration Statement, have been
incorporated herein in reliance on the report of KPMG Peat Marwick LLP,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
71
<PAGE> 75
======================================================
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE ISSUER TRUST. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents
by Reference........................ 3
Certain Defined Terms................. 4
Summary............................... 5
Risk Factors.......................... 14
Triangle Bancorp, Inc................. 22
Consolidated Ratios of Earnings to
Fixed Charges....................... 23
Selected Consolidated Financial Data
and Other Information............... 24
Supplemental Selected Consolidated
Financial Data and Other
Information......................... 25
Triangle Capital Trust................ 26
Accounting Treatment.................. 26
The Exchange Offer.................... 26
Description of the New Capital
Securities.......................... 36
Description of the New Junior
Subordinated Debentures............. 49
Description of the Guarantee.......... 58
Relationship among the Capital
Securities, the Subordinated
Debentures and the Guarantee........ 61
United States Federal Income
Taxation............................ 62
Plan of Distribution.................. 66
Benefit Plan Considerations........... 67
Supervision, Regulation and Other
Matters............................. 69
Legal Matters......................... 71
Experts............................... 71
</TABLE>
======================================================
======================================================
$20,000,000
------------------------
PROSPECTUS
------------------------
TRIANGLE BANCORP, INC.
OFFER TO EXCHANGE ITS
9.375% CAPITAL SECURITIES
(AGGREGATE LIQUIDATION
AMOUNT $20,000,000)
FOR ANY AND ALL OF ITS
9.375% OUTSTANDING CAPITAL SECURITIES
(AGGREGATE LIQUIDATION
AMOUNT $20,000,000)
October , 1997
======================================================
<PAGE> 76
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The North Carolina Business Corporation Act ("NCBCA") provides for
indemnification by a corporation of its officers, directors, employees and
agents, and any person who is or was serving at the corporation's request as a
director, officer, employee or agent of another entity or enterprise or as a
trustee or administrator under an employee benefit plan, against liability and
expense, including reasonable attorneys' fees, in any proceeding (including
without limitation a proceeding brought by or on behalf of the corporation
itself) arising out of their status as such or their activities in any of the
foregoing capacities.
Permissible Indemnification. Under the NCBCA, a corporation may, but is
not required to, indemnify any such person against liability and expenses
incurred in any such proceeding, provided such person conducted himself or
herself in good faith and (i) in the case of conduct in his or her official
corporate capacity, reasonably believed that his or her conduct was in the
corporation's best interests, and (ii) in all other cases, reasonably believed
that his or her conduct was at least not opposed to the corporation's best
interests, and, in the case of a criminal proceeding, where he or she had no
reasonable cause to believe his or her conduct was unlawful. However, a
corporation may not indemnify such person either in connection with a proceeding
by or in the right of the corporation in which such person was adjudged liable
to the corporation, or in connection with any other proceeding charging improper
personal benefit to such person (whether or not involving action in an official
capacity) in which such person was adjudged liable on the basis that personal
benefit was improperly received.
Mandatory Indemnification. Unless limited by the corporation's charter,
the NCBCA requires a corporation to indemnify a director or officer of the
corporation who is holy successful, on the merits or otherwise, in the defense
of any proceeding to which such person was a party because he or she is or was a
director or officer of the corporation against reasonable expenses incurred in
connection with the proceeding.
Advance for Expenses. Expenses incurred by a director, officer, employee
or agent of the corporation in defending a proceeding may be paid by the
corporation in advance of the final disposition of the proceeding as authorized
by the board of directors in the specific case, or as authorized by the charter
or bylaws or by any applicable resolution or contract, upon receipt of an
undertaking by or on behalf of such person to repay amounts advanced unless it
ultimately is determined that such person is entitled to be indemnified by the
corporation against such expenses.
Voluntary Indemnification. In addition to and separate and apart from
"permissible" and "mandatory" indemnification described above, a corporation
may, by charter, bylaw, contract or resolution, indemnify or agree to indemnify
any one or more of its directors, officers, employees or agents against
liability and expenses in any proceeding (including any proceeding brought by or
on behalf of the corporation itself) arising out of their status as such or
their activities in any of the foregoing capacities. However, the corporation
may not indemnify or agree to indemnify a person against liability or expenses
he may incur on account of activities which were at the time taken known or
believed by such person to be clearly in conflict with the best interests of the
corporation. Any provision in a corporation's charter or bylaws or in a contract
or resolution my include provisions for recovery from the corporation of
reasonable costs, expenses and attorneys' fees in connection with the
enforcement of rights to indemnification granted therein and my further include
provisions establishing reasonable procedures for determining and enforcing such
rights.
Court-Ordered Indemnification. Unless otherwise provided in the
corporation's charter, a director or officer of the corporation who is a party
to a proceeding may apply for indemnification to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt of an
application, the court, after giving any notice the court deems necessary, may
order indemnification if it determines either (i) that the director or officer
is entitled to mandatory indemnification as described above, in which case the
court also will order the corporation to pay the reasonable expenses incurred to
obtain the court-ordered indemnification, or (ii) that the director or officer
is fairly and reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not such person met the requisite standard of conduct
or was adjudged liable to the corporation in connection with a proceeding by or
in the right of the corporation or on the basis that personal
II-1
<PAGE> 77
benefit was improperly received in connection with any other proceeding so
charging (but if adjudged so liable, indemnification is limited to reasonable
expenses incurred).
Parties Entitled to Indemnification. The NCBCA defines "director" to
include ex-directors and the estate or personal representative of a director.
Unless its charter provides otherwise, a corporation may indemnify and advance
expenses to an officer, employee or agent of the corporation to the same extent
as to a director and also may indemnify and advance expenses to an officer,
employee or agent who is not a director to the extent, consistent with public
policy, as may be provided in its charger or bylaws, by general or specific
action of its board of directors, or by contract.
Indemnification by the Registrant. The Bylaws of the Registrant provide
for indemnification of its directors, officer, employees and agents, and require
its Board of Directors to take all actions necessary and appropriate to
authorize such indemnification.
Under the NCBCA, a corporation also may purchase insurance on behalf of any
person who is or was a director or officer against any liability arising out of
his status as such. The Registrant currently maintains a directors' and
officers' liability insurance policy.
Trust Agreement Indemnity. The Company has agreed in the Trust Agreement,
to the fullest extent permitted by applicable law, to indemnify and hold
harmless (i) the Property Trustee, (ii) the Delaware Trustee, (iii) and any
Affiliate (as defined in the Trust Agreement) of the Delaware Trustee and
Property Trustee, (iv) each Administrator (as defined in the Trust Agreement) of
the Issuer Trust, (v) any officer, director, shareholder, employee,
representative or agent of the Property Trustee or Delaware Trustee, and (vi)
any employee or agent of the Issuer Trust (each a "Indemnified Person") from and
against any loss, damage, liability, tax, penalty, expense or claim of any kind
or nature whatsoever incurred by such indemnified person arising out of or in
connection with the creation, operation or dissolution of the Issuer Trust or
any act or omission performed or admitted by such Indemnified Person in good
faith on behalf of the Issuer Trust, and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by the Trust Agreement, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
An index of exhibits appears at page II-8, which is incorporated herein by
reference.
ITEM 22. UNDERTAKINGS.
(A) Each of the undersigned registrants hereby undertakes:
1. to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in "Calculation of
Registration Fee" table in the effective registration statement; and
II-2
<PAGE> 78
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
2. that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
3. to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of this offering.
(B) Each of the undersigned registrants hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report to Section 13(a) or
Section 15(b) 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
herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to
directors, officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the
registrants in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrants will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction,
the question whether such indemnification by it is against public policy
as expressed in the Securities Act and will each be governed by the
final adjudication of such issue.
(D) The undersigned registrants hereby undertake to respond to
requests for information that is incorporated by reference into the
Prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one
business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of
responding to the request.
(E) The undersigned registrants hereby undertake to supply by means
of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the
subject of and included in the Registration Statement when it became
effective.
II-3
<PAGE> 79
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Raleigh,
State of North Carolina, on October 29, 1997.
TRIANGLE BANCORP, INC.
By: /s/ MICHAEL S. PATTERSON
------------------------------------
Michael S. Patterson
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Michael
S. Patterson his or her true and lawful attorney-in-fact and agent, 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 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 unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he or she might, or could,
do in person, hereby ratifying and confirming all that said attorney-in fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the capacity
and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ MICHAEL S. PATTERSON President, Chief Executive October 29, 1997
- - ----------------------------------------------------- Officer and Director
Michael S. Patterson (Principal Executive
Officer)
/s/ DEBRA L. LEE Chief Financial Officer October 29, 1997
- - ----------------------------------------------------- (Principal Financial Officer
Debra L. Lee and Principal Accounting
Officer)
/s/ CAROLE S. ANDERS Director October 29, 1997
- - -----------------------------------------------------
Carole S. Anders
/s/ CHARLES H. ASHFORD, JR. Chairman and Director October 29, 1997
- - -----------------------------------------------------
Charles H. Ashford, Jr.
/s/ H. LEIGH BALLANCE, JR. Director October 29, 1997
- - -----------------------------------------------------
H. Leigh Ballance, Jr.
Director
- - -----------------------------------------------------
Edwin B. Borden
/s/ ROBERT E. BRYAN, JR. Director October 29, 1997
- - -----------------------------------------------------
Robert E. Bryan, Jr.
</TABLE>
II-4
<PAGE> 80
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ DAVID T. CLANCY Director October 29, 1997
- - -----------------------------------------------------
David T. Clancy
Director
- - -----------------------------------------------------
N. Leo Daughtry
Director
- - -----------------------------------------------------
Syd W. Dun, Jr.
/s/ WILLIE S. EDWARDS Director October 29, 1997
- - -----------------------------------------------------
Willie S. Edwards
Director
- - -----------------------------------------------------
James P. Godwin, Sr.
Director
- - -----------------------------------------------------
Robert L. Guthrie
/s/ JOHN B. HARRIS, JR. Director October 29, 1997
- - -----------------------------------------------------
John B. Harris, Jr.
Director
- - -----------------------------------------------------
George W. Holt
/s/ EARL JOHNSON, JR. Director October 29, 1997
- - -----------------------------------------------------
Earl Johnson, Jr.
/s/ EDYTHE P. LUMSDEN Director October 29, 1997
- - -----------------------------------------------------
Edythe P. Lumsden
Director
- - -----------------------------------------------------
J. L. Maxwell, Jr.
/s/ MICHAEL A. MAXWELL Director October 29, 1997
- - -----------------------------------------------------
Michael A. Maxwell
/s/ WENDELL H. MURPHY Director October 29, 1997
- - -----------------------------------------------------
Wendell H. Murphy
Director
- - -----------------------------------------------------
Patrick L. Pope
/s/ WILLIAM R. POPE Director October 29, 1997
- - -----------------------------------------------------
William R. Pope
/s/ BILLY N. QUICK, SR. Director October 29, 1997
- - -----------------------------------------------------
Billy N. Quick, Sr.
</TABLE>
II-5
<PAGE> 81
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ J. DAL SNIPES Director October 29, 1997
- - -----------------------------------------------------
J. Dal Snipes
/s/ N. JOHNSON TILGHMAN Director October 29, 1997
- - -----------------------------------------------------
N. Johnson Tilghman
/s/ SYDNOR M. WHITE, JR. Director October 29, 1997
- - -----------------------------------------------------
Sydnor M. White, Jr.
Director
- - -----------------------------------------------------
J. Blount Williams
</TABLE>
II-6
<PAGE> 82
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Raleigh,
State of North Carolina, on October 29, 1997.
TRIANGLE CAPITAL TRUST
By: /s/ ALEXANDER M. DONALDSON
------------------------------------
Alexander M. Donaldson
Administrator
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the capacity
and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <C> <C>
/s/ ALEXANDER M. DONALDSON Administrator October 29, 1997
- - -----------------------------------------------------
Alexander M. Donaldson, Esq.
/s/ DEBRA L. LEE Administrator October 29, 1997
- - -----------------------------------------------------
Debra L. Lee
</TABLE>
II-7
<PAGE> 83
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- - ------- -----------
<C> <C> <S>
3.1 Articles of Incorporation of the Company, as amended
(incorporated by reference to the Company's Form 10-K for
the year ended December 31, 1996, filed with the Commission
on March 25, 1997, File No. 000-21346).
3.2 Bylaws of the Company, as amended (incorporated by reference
to the Company's Form 10-K for the year ended December 31,
1994, filed with the Commission on March 31, 1995, File No.
000-21346).
3.3 Certificate of Trust of the Issuer Trust, dated May 28,
1997, as filed with the Secretary of State of Delaware.
4.1 Indenture, dated as of June 3, 1997, between the Company and
Bankers Trust Company, as Trustee.
4.2 Amended and Restated Trust Agreement, dated as of June 3,
1997, among the Company, Bankers Trust Company, as Property
Trustee, Bankers Trust Company (Delaware), as Delaware
Trustee, and the Administrators named therein.
4.3 Form of Guarantee Agreement entered into by the Company and
Bankers Trust Company, as Guarantee Trustee, and registered
under the Securities Act of 1933, as amended.
4.4 Registration Rights Agreement, dated June 3, 1997, between
Issuer Trust, the Company, and the Initial Purchaser named
therein.
4.5 Form of Capital Security.
4.6 Form of Junior Subordinated Debenture.
5.1 Opinion of Alexander M. Donaldson, Senior Vice President and
General Counsel of the Company, as to the legality of the
Subordinated Debentures and the Guarantee.
5.2 Opinion of Richards, Layton & Finger, special Delaware
counsel, as to the legality of the Capital Securities.
8.1 Opinion of Arnold & Porter, special tax counsel, as to
certain federal income tax matters.
12 Statement of Ratios
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Alexander M. Donaldson (included in Exhibit 5.1).
23.4 Consent of Richards, Layton & Finger (included in Exhibit
5.2).
23.5 Consent of Arnold & Porter (included in Exhibit 8.1).
24 Powers of Attorney (contained in the signature page of the
Registration Statement of which this Exhibit List is a
part).
25.1 Form T-1 Statement of Eligibility of Bankers Trust Company
to act as Trustee under the Indenture.
25.2 Form T-1 Statement of Eligibility of Bankers Trust Company
to act as Trustee under the Amended and Restated Trust
Agreement (contained in Exhibit 26.1).
25.3 Form T-1 Statement of Eligibility of Bankers Trust Company
under the Guarantee for the benefit of the holders of the
Capital Securities (contained in Exhibit 26.1).
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
</TABLE>
II-8
<PAGE> 1
EXHIBIT 3.3
CERTIFICATE OF TRUST OF
TRIANGLE CAPITAL TRUST
THIS CERTIFICATE OF TRUST of Triangle Capital Trust (the "Trust"),
dated May 28, 1997, is being duly executed and filed by Bankers Trust
(Delaware), a Delaware banking corporation, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del. C. ss. 3801 et. seq.).
1. Name. The name of the business trust formed hereby is "Triangle
Capital Trust".
2. Delaware Trustee. The name and address of the trustee of the
Trust in the State of Delaware is:
Bankers Trust (Delaware)
1001 Jefferson Street
Suite 550
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective on
May 28, 1997.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as the date first written above.
BANKERS TRUST (DELAWARE)
not in its individual capacity, but
solely as trustee
By:/s/ M. Lisa Wilkins
---------------------------------
Name: M. Lisa Wilkins
Title: Assistant Secretary
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 02:00 PM 05/28/1997
97117328I - 2755709
<PAGE> 1
===============================================================================
JUNIOR SUBORDINATED INDENTURE
Between
TRIANGLE BANCORP, INC.
and
BANKERS TRUST COMPANY
(as Trustee)
dated as of
June 3, 1997
===============================================================================
<PAGE> 2
TRIANGLE CAPITAL TRUST
Certain Sections of this Junior Subordinated
Indenture relating to Sections 310
through 318 of the Trust Indenture
Act of 1939:
Trust Indenture Junior Subordinated
Act Section Indenture Section
- - --------------- -------------------
Section 310(a)(1) ....................................... 6.9
(a)(2)................................. 6.9
(a)(3)................................. Not Applicable
(a)(4)................................. Not Applicable
(a)(5)................................. 6.9
(b).................................... 6.8, 6.10
Section 311(a) ....................................... 6.13
(b).................................... 6.13
(b)(2)................................. 7.3(a)
Section 312(a) ....................................... 7.1, 7.2(a)
(b).................................... 7.2(b)
(c).................................... 7.2(c)
Section 313(a) ....................................... 7.3(a)
(a)(4)................................. 7.3(a)
(b).................................... 7.3(b)
(c).................................... 7.3(a)
(d).................................... 7.3(c)
Section 314(a) ....................................... 7.4
(b).................................... 7.4
(c)(1)................................. 1.2
(c)(2)................................. 1.2
(c)(3)................................. Not Applicable
(e).................................... 1.2
Section 315(a) ....................................... 6.1(a)
(b).................................... 6.2, 7.3
(c).................................... 6.1(b)
(d).................................... 6.1(c)
(e).................................... 5.14
Section 316(a) ....................................... 5.12
(a)(1)(A).............................. 5.12
(a)(1)(B).............................. 5.13
(a)(2)................................. Not Applicable
(b).................................... 5.8
(c).................................... 1.4(f)
Section 317(a)(1) ....................................... 5.3
(a)(2)................................. 5.4
(b).................................... 10.3
Section 318(a) ....................................... 1.7
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................................................1
Section 1.1. Definitions.................................................................................1
Section 1.2. Compliance Certificate and Opinions........................................................11
Section 1.3. Forms of Documents Delivered to Trustee....................................................12
Section 1.4 Acts of Holders.............................................................................12
Section 1.5. Notices, Etc. to Trustee and Company.......................................................14
Section 1.6. Notice to Holders; Waiver..................................................................15
Section 1.7. Conflict with Trust Indenture Act..........................................................15
Section 1.8. Effect of Headings and Table of Contents...................................................15
Section 1.9. Successors and Assigns.....................................................................15
Section 1.10. Separability Clause.......................................................................16
Section 1.11. Benefits of Indenture.....................................................................16
Section 1.12. Governing Law.............................................................................16
Section 1.13. Non-Business Days.........................................................................16
ARTICLE II SECURITY FORMS.......................................................................................16
Section 2.1 Forms Generally.............................................................................16
Section 2.2. Form of Face of Security...................................................................17
Section 2.3. Form of Reverse of Security................................................................21
Section 2.4. Additional Provisions Required in Global Security..........................................26
Section 2.5. Form of Trustee's Certificate of Authentication............................................26
ARTICLE III THE SECURITIES......................................................................................27
Section 3.1. Title and Terms............................................................................27
Section 3.2. Denominations..............................................................................30
Section 3.3. Execution, Authentication, Delivery and Dating.............................................30
Section 3.4. Temporary Securities.......................................................................32
Section 3.5. Global Securities..........................................................................32
Section 3.6. Registration, Transfer and Exchange Generally; Certain Transfers...........................33
and Exchanges; Securities Act Legends...................................................33
Section 3.7. Mutilated, Lost and Stolen Securities......................................................36
Section 3.8. Payment of Interest and Additional Interest; Interest Rights Preserved.....................37
Section 3.9. Persons Deemed Owners......................................................................38
Section 3.10. Cancellation.............................................................................39
Section 3.11. Computation of Interest..................................................................39
Section 3.12. Deferrals of Interest Payment Dates.......................................................39
Section 3.13. Right of Set-Off..........................................................................41
Section 3.14. Agreed Tax Treatment......................................................................41
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Section 3.15. Shortening or Extension of Stated Maturity................................................41
Section 3.16. CUSIP Numbers.............................................................................41
ARTICLE IV SATISFACTION AND DISCHARGE...........................................................................42
Section 4.1. Satisfaction and Discharge of Indenture...................................................42
Section 4.2 Application of Trust Money..................................................................43
ARTICLE V REMEDIES..............................................................................................43
Section 5.1. Events of Default..........................................................................43
Section 5.2. Acceleration of Maturity; Rescission and Annulment........................................44
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee............................46
Section 5.4. Trustee May File Proofs of Claim...........................................................46
Section 5.5. Trustee May Enforce Claim Without Possession of Securities.................................47
Section 5.6. Application of Money Collected.............................................................47
Section 5.7. Limitation on Suits........................................................................48
Section 5.8. Unconditional Right of Holders to Receive Principal, Premium and...........................49
Interest; Direct Action by Holders of Capital Securities................................49
Section 5.9. Restoration of Rights and Remedies.........................................................49
Section 5.10. Rights and Remedies Cumulative............................................................49
Section 5.11. Delay or Omission Not Waiver..............................................................49
Section 5.12. Control by Holders........................................................................50
Section 5.13. Waiver of Past Defaults...................................................................50
Section 5.14. Undertaking for Costs.....................................................................51
Section 5.15. Waiver of Usury, Stay or Extension Laws...................................................51
ARTICLE VI THE TRUSTEE..........................................................................................52
Section 6.1. Certain Duties and Responsibilities........................................................52
Section 6.2. Notice of Defaults.........................................................................53
Section 6.3. Certain Rights of Trustee..................................................................53
Section 6.4. Not Responsible for Recitals or Issuance of Securities.....................................54
Section 6.5. May Hold Securities........................................................................54
Section 6.6. Money Held in Trust........................................................................54
Section 6.7. Compensation and Reimbursement.............................................................55
Section 6.8. Disqualification; Conflicting Interests....................................................56
Section 6.9. Corporate Trustee Required; Eligibility....................................................56
Section 6.10. Resignation and Removal; Appointment of Successor.........................................56
Section 6.11. Acceptance of Appointment by Successor....................................................58
Section 6.12. Merger, Conversion, Consolidation or Succession to Business...............................59
Section 6.13. Preferential Collection of Claims Against Company.........................................59
Section 6.14. Appointment of Authenticating Agent.......................................................59
ARTICLE VII HOLDER'S LISTS AND REPORTS BY TRUSTEE, PAYING AGENT AND COMPANY....................................61
Section 7.1. Company to Furnish Trustee Names and Addresses of Holders..................................61
Section 7.2. Preservation of Information; Communications to Holders.....................................61
Section 7.3. Reports by Trustee and Paying Agent........................................................62
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Section 7.4. Reports by Company.........................................................................62
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...............................................63
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms.......................................63
Section 8.2. Successor Company Substituted.............................................................64
ARTICLE IX SUPPLEMENTAL INDENTURES..............................................................................64
Section 9.1. Supplemental Indentures Without Consent of Holders.........................................64
Section 9.2. Supplemental Indentures with Consent of Holders............................................66
Section 9.3. Execution of Supplemental Indentures.......................................................67
Section 9.4. Effect of Supplemental Indentures..........................................................67
Section 9.5. Conformity with Trust Indenture Act........................................................67
Section 9.6. Reference in Securities to Supplemental Indentures.........................................68
ARTICLE X COVENANTS.............................................................................................68
Section 10.1. Payment of Principal, Premium and Interest................................................68
Section 10.2. Maintenance of Office or Agency...........................................................68
Section 10.3. Money for Security Payments to be Held in Trust...........................................69
Section 10.4. Statement as to Compliance................................................................70
Section 10.5. Waiver of Certain Covenants...............................................................70
Section 10.6. Additional Sums...........................................................................71
Section 10.7. Additional Covenants......................................................................71
Section 10.8. Original Issue Discount...................................................................72
ARTICLE XI REDEMPTION OF SECURITIES.............................................................................72
Section 11.1. Applicability of This Article.............................................................72
Section 11.2. Election to Redeem; Notice to Trustee.....................................................73
Section 11.3. Selection of Securities to be Redeemed....................................................73
Section 11.4. Notice of Redemption......................................................................73
Section 11.5. Deposit of Redemption Price...............................................................74
Section 11.6. Payment of Securities Called for Redemption...............................................75
Section 11.7. Right of Redemption of Securities Initially Issued to an Issuer Trust.....................75
ARTICLE XII SINKING FUNDS.......................................................................................76
ARTICLE XIII SUBORDINATION OF SECURITIES........................................................................76
Section 13.1. Securities Subordinate to Senior Indebtedness.............................................76
Section 13.2. No Payment When Senior Indebtedness in Default; Payment Over of Proceeds Upon
Dissolution, Etc.......................................................................76
Section 13.3. Payment Permitted If No Default...........................................................78
Section 13.4. Subrogation to Rights of Holders of Senior Indebtedness...................................78
Section 13.5. Provisions Solely to Define Relative Rights...............................................78
Section 13.6. Trustee to Effectuate Subordination.......................................................79
Section 13.7. No Waiver of Subordination Provisions.....................................................79
Section 13.8. Notice to Trustee.........................................................................80
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Section 13.9. Reliance on Judicial Order or Certificate of Liquidating Agent............................80
Section 13.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.................................81
Section 13.11. Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights.....81
Section 13.12. Article Applicable to Paying Agents......................................................81
Section 13.13. Certain Conversions or Exchanges Deemed Payment..........................................81
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ANNEX A FORM OF RESTRICTED SECURITIES CERTIFICATE
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EXHIBIT 4.1
JUNIOR SUBORDINATED INDENTURE
THIS JUNIOR SUBORDINATED INDENTURE, dated as of June 3, 1997, is
between TRIANGLE BANCORP, INC., a North Carolina corporation (the "Company"),
having its principal office at 4300 Glenwood Avenue, Raleigh, North Carolina
27612, and BANKERS TRUST COMPANY, as Trustee, having its principal office at
Four Albany Street, 4th Floor, New York, New York 10006 (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
junior subordinated debt securities in series (hereinafter called the
"Securities") of substantially the tenor hereinafter provided, including
Securities issued to evidence loans made to the Company from the proceeds from
the issuance from time to time by one or more business trusts (each an "Issuer
Trust") of undivided preferred beneficial interests in the assets of such Issuer
Trusts (the "Capital Securities") and common undivided interests in the assets
of such Issuer Trusts (the "Common Securities" and, collectively with the
Capital Securities, the "Trust Securities"), and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as such term is defined in Section 1.1 hereof)
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities or of any series thereof, and intending
to be legally bound hereby, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
<PAGE> 8
(1) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";
(4) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect at the time of computation;
(5) Whenever the context may require, any gender shall be deemed to
include the other;
(6) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture; and
(7) The words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4(a).
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Securities of any series the payment of which has not been
made on the applicable Interest Payment Date and which shall accrue at the rate
per annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means any additional taxes, duties and other
governmental charges to which an Issuer Trust has become subject from time to
time as a result of a Tax Event.
"Administrator" means, in respect of any Issuer Trust, each Person
appointed in accordance with the related Trust Agreement, solely in such
Person's capacity as Administrator of such Issuer Trust and not in such Person's
individual capacity, or any successor Administrator appointed as therein
provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly
2
<PAGE> 9
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.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means the board of directors of the Company or the
Executive Committee of the board of directors of the Company (or any other
committee of the board of directors of the Company performing similar functions)
or, for purposes of this Indenture, a committee designated by the board of
directors of the Company (or such committee), comprised of two or more members
of the board of directors of the Company or officers of the Company, or both.
"Board Resolution" means a copy of a resolution certified by the
Secretary or any Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in the City of New York, New York, or the
City of Raleigh, North Carolina, are authorized or required by law or executive
order to remain closed, or (iii) a day on which the Corporate Trust Office of
the Trustee, or, with respect to the Securities of a series initially issued to
an Issuer Trust, the "Corporate Trust Office" (as defined in the related Trust
Agreement) of the Property Trustee or the Delaware Trustee under the related
Trust Agreement, is closed for business.
"Capital Securities" has the meaning specified in the first recital of
this Indenture.
"Capital Treatment Event" means, in respect of any Issuer Trust, the
reasonable determination by the Company that, as a result of the occurrence of
any amendment to, or change (including any announced prospective change) in, the
laws (or any rules or regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement, action or decision is announced on or after the date of the
issuance of the Capital Securities of such Issuer Trust, there is more than an
insubstantial risk that the Company will not be entitled to treat an amount
equal to the Liquidation Amount of such Capital Securities as "Tier "Capital"
(or the then equivalent
3
<PAGE> 10
thereof) for purposes of the risk-based capital adequacy guidelines of the Board
of Governors of the Federal Reserve System, as then in effect and applicable to
the Company.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Common Stock" means the common stock, no par value per share, of the
Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor entity shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor entity.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board
of Directors, any Vice Chairman of the Board of Directors, its President or a
Senior Vice President or Vice President, and by its Chief Financial Officer, its
Treasurer or an Assistant Treasurer, or its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered.
"Creditor" has the meaning specified in Section 6.7(c).
"Defaulted Interest" has the meaning specified in Section 3.8.
"Delaware Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Delaware Trustee" in the related Trust Agreement, solely in
its capacity as Delaware Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor Delaware trustee appointed as therein provided.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.1 with respect to such series (or any successor thereto).
"Discount Security" means any security that provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Dollar" or "$" means the currency of the United States of America
that, as at the time of payment, is legal tender for the payment of public and
private debts.
4
<PAGE> 11
The term "entity" includes a bank, corporation, association, company,
limited liability company, joint-stock company or business trust.
"Event of Default," unless otherwise specified in the supplemental
indenture creating a series of Securities, has the meaning specified in
Article V.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4(f).
"Extension Period" has the meaning specified in Section 3.12.
"Global Security" means a Security in the form prescribed in Section
2.4 evidencing all or part of a series of Securities, issued to the Depositary
or its nominee for such series, and registered in the name of such Depositary or
its nominee.
"Guarantee" means, with respect to any Issuer Trust, the Guarantee
Agreement executed by the Company for the benefit of the Holders of the Capital
Securities issued by such Issuer Trust as modified, amended or supplemented from
time to time.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.1.
"Institutional Accredited Investor" means an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act.
"Interest Payment Date" means, as to each series of Securities, the
Stated Maturity of an installment of interest on such Securities.
"Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by an Issuer Trust of an
Opinion of Counsel (as defined in the relevant Trust Agreement) experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a written change (including any announced prospective
change) in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, there is more than an
insubstantial risk that such Issuer Trust is or will be considered an
"investment company" that is
5
<PAGE> 12
required to be registered under the Investment Company Act, which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Capital Securities of such
Issuer Trust.
"Issuer Trust" has the meaning specified in the first recital of this
Indenture.
"Liquidation Amount" shall have the meaning assigned in the applicable
related Trust Agreement.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chief
Executive Officer, the President or a Vice President, and by the Chief Financial
Officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the party provided herein. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(a) a statement by each officer signing the Officers' Certificate that
such officer has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company or any Affiliate of the Company.
"Original Issue Date" means the date of issuance specified as such in
each Security.
"Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
6
<PAGE> 13
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or that have been paid
pursuant to Section 3.6, unless proof satisfactory to the Trustee is
presented that any such Securities are held by Holders in whose hands
such Securities are valid, binding and legal obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor (other than, for the avoidance of doubt, the
Issuer Trust to which Securities of the applicable series were initially issued)
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities that the Trustee knows to be so owned shall be so disregarded.
Securities so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or such other obligor (other than, for the avoidance of doubt, such
Issuer Trust). Upon the written request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Securities, if any, known by the Company to be owned or held by or for the
account of the Company, or any other obligor on the Securities or any Affiliate
of the Company or such obligor (other than, for the avoidance of doubt, such
Issuer Trust), and, subject to the provisions of Section 6.1, the Trustee shall
be entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of (or premium, if any) or interest on, or other
amounts in respect of any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of (and premium, if any) and interest on
the Securities of such series are payable pursuant to Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.7 in lieu of a
7
<PAGE> 14
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Subsidiary Bank" means each of (i) Triangle Bank, (ii) any
other banking subsidiary of the Company the consolidated assets of which
constitute 20% or more of the consolidated assets of the Company and its
consolidated subsidiaries, (iii) any other banking subsidiary designated as a
Principal Subsidiary Bank pursuant to a Board Resolution and set forth in an
Officers' Certificate delivered to the Trustee, and (iv) any banking subsidiary
of the Company that owns, directly or indirectly, any voting securities, or
options, warrants or rights to subscribe for or purchase voting securities, of
any Principal Subsidiary Bank under clause (i), (ii) or (iii), and in the case
of clause (i), (ii), (iii) or (iv) their respective successors (whether by
consolidation, merger, conversion, transfer of substantially all their assets
and business or otherwise) so long as any such successor is a banking subsidiary
(in the case of clause (i), (ii) or (iii) or a subsidiary (in the case of clause
(iv), of the Company.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Property Trustee" in the related Trust Agreement, solely in
its capacity as Property Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor property trustee appointed as therein provided.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or the terms of such Security.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of such series, the close of
business on the fifteenth day of the month next preceding such Interest Payment
Date (whether or not a Business Day).
"Responsible Officer", when used with respect to the Property Trustee
means any officer assigned to the Corporate Trust Office, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Indenture, and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Restricted Security" means each Security required pursuant to Section
3.6(c) to bear a Restricted Securities Legend.
8
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"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Annex A.
"Restricted Securities Legend" means a legend substantially in the form
of the legend required in the form of Security set forth in Section 2.2 to be
placed upon a Restricted Security.
"Rights Plan" means any plan of the Company providing for the issuance
by the Company to all holders of its Common Stock, of rights entitling the
holders thereof to subscribe for or purchase shares of any class or series of
capital stock of the Company which rights (i) are deemed to be transferred with
such shares of such Common Stock, (ii) are not exercisable, and (iii) are also
issued in respect of future issuances of such Common Stock, in each case until
the occurrence of a specified event or events.
"Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as modified, amended
or supplemented from time to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.6(a).
"Senior Indebtedness" means, whether recourse is to all or a portion of
the assets of the Company and whether or not contingent: (i) every obligation of
the Company for money borrowed; (ii) every obligation of the Company evidenced
by bonds, debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or businesses;
(iii) every reimbursement obligation of the Company with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account of the
Company; (iv) every obligation of the Company issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of the Company; (vi) every obligation of the Company
for claims (as defined in Section 101(4) of the United States Bankruptcy Code of
1978, as amended) in respect of derivative products such as interest and foreign
exchange rate contracts, commodity contracts and similar arrangements; and (vii)
every obligation of the type referred to in clauses (i) through (vi) of another
Person and all dividends of another Person the payment of which, in either case,
the Company has guaranteed or is responsible or liable, directly or indirectly,
as obligor or otherwise; without limiting the generality of the foregoing,
Senior Indebtedness shall include indebtedness incurred pursuant to the
Short-Term Borrowing Agreement dated February 3, 1997 between the Company and
Triangle Bank. "Senior Indebtedness" shall not include (i) any obligations
which, by their terms, are expressly stated to rank pari passu in right of
payment with, or to not be superior in right of payment to, the Junior
Subordinated Debentures, (ii) any Senior Indebtedness of the Company which when
incurred and without respect to any election under Section 1111(b) of the United
States Bankruptcy Code of 1978, as amended, was without recourse to the Company,
(iii) any indebtedness of the Company to any of its subsidiaries, (iv)
indebtedness to any executive officer or director of the Company, or
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(v) any indebtedness in respect of debt securities issued to any trust, or a
trustee of such trust, partnership or other entity affiliated with the Company
that is a financing entity of the Company in connection with the issuance of
such financing entity of securities that are similar to the Capital Securities.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.8.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
pursuant to the terms of such Security as the fixed date on which the principal
of such Security or such installment of principal or interest is due and
payable, as such date may, in the case of such principal, be shortened or
extended as provided pursuant to the terms of such Security and this Indenture.
"Subsidiary" means an entity more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For purposes of this definition, "voting stock" means stock that ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.7 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Tax Event" means the receipt by an Issuer Trust of an Opinion of
Counsel (as defined in the relevant Trust Agreement) experienced in such matters
to the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or which pronouncement or decision is
announced on or after the date of issuance of the Capital Securities of such
Issuer Trust, there is more than an insubstantial risk that (i) such Issuer
Trust is, or will be within 90 days of the delivery of such Opinion of Counsel,
subject to United States Federal income tax with respect to income received or
accrued on the corresponding series of Securities issued by the Company to such
Issuer Trust, (ii) interest payable by the Company on such corresponding series
of Securities is not, or within 90 days of the delivery of such Opinion of
Counsel will not be, deductible by the Company, in whole or in part, for United
States Federal income tax purposes, or (iii) such Issuer Trust is, or will be
within 90 days of the delivery of such Opinion of Counsel, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.
"Trust Agreement" means, with respect to any Issuer Trust, the trust
agreement or other governing instrument of such Issuer Trust.
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<PAGE> 17
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, solely in its capacity as such and not in its
individual capacity, until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder and, if at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
modified, amended or supplemented from time to time, except as provided in
Section 9.5.
"Trust Securities" has the meaning specified in the first recital of
this Indenture.
"Vice President," when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 1.2. COMPLIANCE CERTIFICATE AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent
(including covenants compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent (including covenants compliance with
which constitutes a condition precedent), if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.4) shall include:
(1) a statement by each individual signing such certificate or
opinion that such individual has read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions of
such individual contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or
she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
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(4) a statement as to whether, in the opinion of such
individual, such condition or covenant has been complied with.
SECTION 1.3. FORMS OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his or her certificate or opinion is based
are erroneous. Any such certificate or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.1) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
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Where such execution is by a Person acting in other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be provided in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(f) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next succeeding paragraph.
If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date, provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
(as defined below) by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2), or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such
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<PAGE> 20
Holders remain Holders after such record date, provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect) and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Expiration Date"
and from time to time may change the Expiration Date to any earlier or later
day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 1.6 on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 1.5. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Capital Securities or the
Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee, any Holder or any holder of Capital
Securities shall be sufficient for every purpose (except as otherwise provided
in Section 5.1) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its principal office
specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
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SECTION 1.6. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If, by reason of the suspension
of or irregularities in regular mail services or for any other reason, it shall
be impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture or of
the relevant Securities, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 1.7. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the provision of the Trust Indenture Act shall control.
If any provision of this Indenture modifies or excludes any provision of the
Trust Indenture Act that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded, as
the case may be.
SECTION 1.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. SEPARABILITY CLAUSE.
If any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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SECTION 1.11. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Indebtedness, the Holders of the Securities and,
to the extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and
9.2, the holders of Capital Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.13. NON-BUSINESS DAYS.
If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest or principal (and
premium, if any) or other amounts in respect of such Security need not be made
on such date, but may be made on the next succeeding Business Day (and no
interest shall accrue in respect of the amounts whose payment is so delayed for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, until such next succeeding Business Day) except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day (in each case with the
same force and effect as if made on the Interest Payment Date or Redemption Date
or at the Stated Maturity).
ARTICLE II
SECURITY FORMS
SECTION 2.1 FORMS GENERALLY.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with applicable tax laws or the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the
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<PAGE> 23
delivery of the Company Order contemplated by Section 3.3 with respect to the
authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in
the form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Securities distributed to holders of Global Capital Securities (as
defined in the applicable Trust Agreement) upon the dissolution of an Issuer
Trust shall be distributed in the form of one or more Global Securities
registered in the name of a Depositary or its nominee, and deposited with the
Securities Registrar, as custodian for such Depositary, or with such Depositary,
for credit by the Depositary to the respective accounts of the beneficial owners
of the Securities represented thereby (or such other accounts as they may
direct). Securities distributed to holders of Capital Securities other than
Global Capital Securities upon the dissolution of an Issuer Trust shall not be
issued in the form of a Global Security or any other form intended to facilitate
book-entry trading in beneficial interests in such Securities.
SECTION 2.2. FORM OF FACE OF SECURITY.
TRIANGLE BANCORP, INC.
[Title of Security]
[If the Security is a Restricted Security, insert -- THE SECURITIES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A) BY ANY INITIAL INVESTOR THAT IS NOT A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT,
(I) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 903
OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (B) BY AN INITIAL INVESTOR THAT IS A QUALIFIED
INSTITUTIONAL BUYER OR BY ANY SUBSEQUENT INVESTOR, AS SET FORTH IN (A) ABOVE
AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND, IN EACH
CASE IN
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<PAGE> 24
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
JURISDICTIONS OF THE UNITED STATES. THE HOLDER OF THIS SECURITY AGREES THAT IT
WILL COMPLY WITH THE FOREGOING RESTRICTIONS. SECURITIES OWNED BY AN INITIAL
INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN GLOBAL
FORM AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE TRANSFER COMPLIES
WITH THE FOREGOING RESTRICTIONS, AS PROVIDED IN THE INDENTURE REFERRED TO BELOW.
NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED
BY RULE 144 FOR RESALES OF THE CAPITAL SECURITIES.]
No. $
TRIANGLE BANCORP, INC., a North Carolina corporation (hereinafter
called the "Company", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to _____, or registered assigns, the principal sum of ______ Dollars on ______,
[if the Security is a Global Security, then insert, if applicable--, or such
other principal amount represented hereby as may be set forth in the records of
the Securities Registrar hereinafter referred to in accordance with the
Indenture,] [; provided that the Company may (i) shorten the Stated Maturity of
the principal of this Security to a date not earlier than _________, and
(ii) extend the Stated Maturity of the principal of this Security at any time on
one or more occasions, subject to certain conditions specified in Section 3.15
of the Indenture, but in no event to a date later than _______]. The Company
further promises to pay interest on said principal from ______, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, [monthly] [quarterly] [semi-annually] [if applicable, insert--(subject to
deferral as set forth herein)] in arrears on [insert applicable Interest Payment
Dates] of each year, commencing ________ at the [variable rate equal to [insert
applicable interest rate formula]] [rate of ____%] per annum, [if applicable
insert--together with Additional Sums, if any, as provided in Section 10.6 of
the Indenture,] until the principal hereof is paid or duly provided for or made
available for payment [if applicable, insert--; provided that any overdue
principal, premium or Additional Sums and any overdue installment of interest
shall bear Additional Interest at the [variable rate equal to [insert applicable
interest rate formula]] [rate of ____%] per annum (to the extent that the
payment of such interest shall be legally enforceable), compounded [monthly]
[quarterly] [semi-annually], from the dates such amounts are due until they are
paid or made available for payment, and such interest shall be payable on
demand]. The amount of interest payable for any period less than a full interest
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the actual days elapsed in a partial month in such period. The amount of
interest payable for any full interest period shall be computed by dividing the
applicable rate per annum by [twelve/four/two]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest installment [if applicable, insert--,
which shall be the [_____ or ______] (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date]. Any such interest not
so punctually paid or duly provided for shall forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this
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<PAGE> 25
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee (notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date) or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
[If applicable, insert--So long as no Event of Default has occurred and
is continuing, the Company shall have the right, at any time during the term of
this Security, from time to time to defer the payment of interest on this
Security for up to ____ consecutive [monthly] [quarterly] [semi-annual] interest
payment periods with respect to each deferral period (each an "Extension
Period") [if applicable, insert--, during which Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date, and] at the end of which the Company shall pay all interest then
accrued and unpaid including Additional Interest, as provided below; provided,
however, that no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security [If Stated Maturity can be shortened or extended,
insert--, as then in effect,] and no such Extension Period may end on a date
other than an Interest Payment Date; and provided, further, however, that during
any such Extension Period, the Company shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock, or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to this Security (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
Subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any Rights Plan, or the
issuance of rights, stock or other property under any Rights Plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock). Prior to the termination of any such Extension Period,
the Company may further defer the payment of interest, provided that no
Extension Period shall exceed __ consecutive [monthly] [quarterly] [semi-annual]
interest payment periods, extend beyond the Stated Maturity of the principal of
this Security or end on a date other than an Interest Payment Date. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional
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Interest then due on any Interest Payment Date, the Company may elect to begin a
new Extension Period, subject to the above conditions. No interest shall be due
and payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest (to the extent that the
payment of such interest shall be legally enforceable) at the [variable rate
equal to [insert applicable interest rate formula]] [rate of ____%] per annum,
compounded [monthly] [quarterly] [semi-annually] and calculated as set forth in
the first paragraph of this Security, from the date on which such amounts would
otherwise have been due and payable until paid or made available for payment.
The Company shall give the Holder of this Security and the Trustee notice of its
election to begin any Extension Period at least one Business Day prior to the
next succeeding Interest Payment Date on which interest on this Security would
be payable but for such deferral [if applicable, insert--or so long as such
securities are held by [insert name of applicable Issuer Trust], at least one
Business Day prior to the earlier of (i) the next succeeding date on which
Distributions on the Capital Securities of such Issuer Trust would be payable
but for such deferral, and (ii) the date on which the Property Trustee of such
Issuer Trust is required to give notice to holders of such Capital Securities of
the record date or the date such Distributions are payable, but in any event not
less than one Business Day prior to such record date.]
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert--; provided, however that at the option of
the Company payment of interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Securities
Register, or (ii) if to a Holder of $1,000,000 or more in aggregate principal
amount of this Security, by wire transfer in immediately available funds upon
written request to the Trustee not later than 15 calendar days prior to the date
on which the interest is payable].
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such actions as may be necessary or appropriate to effectuate the subordination
so provided, and (c) appoints the Trustee his or her attorney-in-fact for any
and all such purposes. Each Holder hereof, by his or her acceptance hereof,
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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<PAGE> 27
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
TRIANGLE BANCORP, INC.
By:
---------------------
Name:
Title:
Attest:
- - --------------------------------
Secretary or Assistant Secretary
SECTION 2.3. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under the Junior Subordinated Indenture, dated as of June 3, 1997 (herein
called the "Indenture"), between the Company and Bankers Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Indebtedness and the Holders of the Securities, and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof [if applicable,
insert--, limited in aggregate principal amount to $______].
All terms used in this Security that are defined in the Indenture [if
applicable, insert-- or in [insert name of trust agreement], dated as of _____
(as modified, amended or supplemented from time to time the "Trust Agreement"),
relating to [insert name of Issuer Trust] [the ("Issuer Trust") among the
Company, as Depositor, the Trustees named therein and the Holders from time to
time of the Trust Securities issued pursuant thereto] shall have the meanings
assigned to them in the Indenture [if applicable, insert--or the Trust
Agreement, as the case may be].
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<PAGE> 28
[If applicable, insert--The Company has the right to redeem this
Security (i) on or after _________, in whole at any time or in part from time to
time, or (ii) in whole (but not in part), at any time within 90 days following
the occurrence and during the continuation of a Tax Event, Investment Company
Event, or Capital Treatment Event, in each case at the Redemption Price
described below, and subject to possible regulatory approval.]
[If applicable, insert--In the case of a redemption on or after
___________, the Redemption Price shall equal the following prices, expressed in
percentages of the principal amount hereof, together with accrued interest to
but excluding the date fixed for redemption, if redeemed during the 12-month
period beginning ____________:
Redemption
Year Price
---- ----------
and 100% on or after __________.
In the case of a redemption on or after __________ following a Tax
Event, Investment Company Event or Capital Treatment Event, the Redemption Price
shall equal the Redemption Price then applicable to a redemption under the
preceding paragraph.
In the case of a redemption prior to _________ following a Tax Event,
Investment Company Event or Capital Treatment Event in respect of the Issuer
Trust, the Redemption Price shall equal the Make-Whole Amount for a
corresponding $_________ principal amount hereof, together with accrued interest
to but excluding the date fixed for redemption, which Make-Whole Amount will be
equal to the greater of (i) 100% of the principal amount hereof, and (ii) as
determined by a Quotation Agent (as defined in the Trust Agreement), the sum of
the present values of the principal amount hereof and premium, if any, payable
as part of the Redemption Price with respect to an optional redemption hereof on
___________, together with the present values of scheduled payments of interest
(not including the portion of any such payments of interest accrued as of the
Redemption Date) from the date fixed for redemption to ___________, in each case
discounted to the date fixed for redemption on a [monthly] [quarterly]
[semi-annual] basis (assuming a 360-day year consisting of 30-day months) at the
Adjusted Treasury Rate (as defined in the Trust Agreement).]
[If the Security is subject to redemption of any kind, insert--In the
event of redemption of this Security in part only, a new Security or Securities
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.]
[If applicable, insert--Pursuant to the Registration Rights Agreement,
in the event that: (i) (A) neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement is filed with the Commission on or prior to the
150th day after the Issue Date or (B)
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<PAGE> 29
notwithstanding that the Company and the Issuer Trust have consummated or will
consummate an Exchange Offer, the Company and the Issuer Trust are required to
file a Shelf Registration Statement and such Shelf Registration Statement is not
filed on or prior to the date required by the Registration Rights Agreement,
then commencing on the day after the applicable required filing date, liquidated
damages shall accrue on the principal amount of the Junior Subordinated
Debentures and, if the Exchange Offer has been consummated, the New Junior
Subordinated Debentures, each at a rate of ____% per annum; or (ii) (A) neither
the Exchange Offer Registration Statement nor a Shelf Registration Statement is
declared effective by the Commission on or prior to the _______ day after the
Issue Date or (B) notwithstanding that the Company and the Issuer Trust have
consummated or will consummate an Exchange Offer, the Company and the Issuer
Trust are required to file a Shelf Registration Statement and such Shelf
Registration Statement is not declared effective by the Commission on or prior
to the _____ day after the date such Shelf Registration Statement was required
to be filed, then, commencing on the _____ day after the Issue Date, liquidated
damages shall accrue on the principal amount of the Junior Subordinated
Debentures and, if the Exchange Offer has been consummated, the New Junior
Subordinated Debentures, each at a rate of ____% per annum; or (iii) (A) the
Issuer Trust has not exchanged New Capital Securities for all Capital Securities
validly tendered for exchange by their respective Holders or the Company has not
exchanged the New Guarantee or New Junior Subordinated Debentures for the
Guarantee or Junior Subordinated Debentures validly tendered, in accordance with
the terms of the Exchange Offer on or prior to the _____ day after the date on
which the Exchange Offer Registration Statement was declared effective or (B) if
applicable, the Shelf Registration Statement has been declared effective and
such Shelf Registration Statement ceases to be effective at any time prior to
the expiration of the Rule 144(K) Period (other than after such time as all
Capital Securities have been disposed of thereunder or otherwise cease to be
Registrable Securities), then liquidated damages shall accrue on the principal
amount of the Junior Subordinated Debentures and, if the Exchange Offer has been
consummated, the New Junior Subordinated Debentures, each at a rate of ____% per
annum commencing on (x) the ____ day after such effective date, in the case of
(A) above, or (y) the day such Shelf Registration Statement ceases to be
effective in the case of B above; provided, however, that the liquidated damages
on the Junior Subordinated Debentures and, if the Exchange Offer has been
consummated, the New Junior Subordinated Debentures, may not exceed in the
aggregate ____% per annum; provided, further, however, that (1) upon the filing
of the Exchange Offer Registration Statement or a Shelf Registration Statement
(in the case of clause (i) above), (2) upon the effectiveness of the Exchange
Offer Registration Statement or a Shelf Registration Statement (in the case of
clause (ii) above), or (3) upon the exchange of New Capital Securities, the New
Guarantee and New Junior Subordinated Debentures for all Capital Securities, the
Guarantee and all Junior Subordinated Debentures tendered (in the case of clause
(iii)(A) above), or upon the effectiveness of the Shelf Registration Statement
which had ceased to remain effective (in the case of clause (iii)(B) above)
liquidated damages on the Junior Subordinated Debentures and, if the Exchange
Offer has been consummated, the New Junior Subordinated Debentures, shall cease
to accrue and accumulate.
Any amounts of liquidated damages due pursuant to the preceding
paragraph, will be payable in cash on the next succeeding Interest Payment Date
to Holders on the relevant Regular Record Date.]
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<PAGE> 30
[If applicable, insert--The Indenture contains provisions for
defeasance at any time [of the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance by the Company with certain
conditions set forth in the Indenture.]
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
[If the Security is not a Discount Security, insert--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Securities of this series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders) [if applicable, insert--, provided that, if
upon an Event of Default, the Trustee or such Holders fail to declare the
principal of all the Outstanding Securities of this series to be immediately due
and payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee]; and upon any
such declaration the principal amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIII of the Indenture.]
[If the Security is a Discount Security, insert--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare an amount of principal of the Securities of this series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders) [if applicable, insert--, provided that, if upon an
Event of Default, the Trustee or such Holders fail to declare such principal
amount of the Outstanding Securities of this series to be immediately due and
payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities
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<PAGE> 31
then outstanding shall have the right to make such declaration by a notice in
writing to the Company and the Trustee. The principal amount payable upon such
acceleration shall be equal to--insert formula for determining the amount]. Upon
any such declaration, such amount of the principal of and the accrued interest
(including any Additional Interest) on all the Securities of this series shall
become immediately due and payable, provided that the payment of such principal
and interest (including any Additional Interest) on all the Securities of this
series shall remain subordinated to the extent provided in Article XIII of the
Indenture. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal, premium and interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on this Security shall
terminate.]
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest (including Additional Interest) on this Security at the times, place
and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
for such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $100,000 and any integral multiple of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agrees that for United
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<PAGE> 32
States Federal, state and local tax purposes it is intended that this Security
constitute indebtedness.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
THIS SECURITY IS A DIRECT AND UNSECURED OBLIGATION OF THE COMPANY, DOES
NOT EVIDENCE DEPOSITS AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER INSURER OR GOVERNMENT AGENCY.
SECTION 2.4. ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.
Unless otherwise specified as contemplated by Section 3.1, any Global
Security issued hereunder shall, in addition to the provisions contained in
Sections 2.2 and 2.3, bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE
FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 2.5. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: ___________ BANKERS TRUST COMPANY,
as Trustee
By:
--------------------
Authorized Signatory
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<PAGE> 33
ARTICLE III
THE SECURITIES
SECTION 3.1. TITLE AND TERMS.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities as a series:
(a) the title of the securities of such series, which shall distinguish
the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6 and except for any
Securities that, pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;
(c) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(d) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof, and
any dates on which or circumstances under which, the Company shall have the
right to extend or shorten such Stated Maturity or Maturities;
(e) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which Additional
Interest, if any, shall be payable with respect to any Securities of such
series, the date or dates from which any such interest or Additional Interest
shall accrue, the Interest Payment Dates on which such interest shall be
payable, the right, pursuant to Section 3.12 or as otherwise set forth therein,
of the Company to defer or extend an Interest Payment Date, and the Regular
Record Date for the interest payable on any Interest Payment Date or the method
by which any of the foregoing shall be determined;
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<PAGE> 34
(f) the place or places where the principal of (and premium, if any)
and interest or Additional Interest on the Securities of such series shall be
payable, the place or places where the Securities of such series may be
presented for registration of transfer or exchange, any restrictions that may be
applicable to any such transfer or exchange in addition to or in lieu of those
set forth herein and the place or places where notices and demands to or upon
the Company in respect of the Securities of such series may be made;
(g) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
the Company, and if other than by a Board Resolution, the manner in which any
election by the Company to redeem such Securities shall be evidenced;
(h) the obligation or the right, if any, of the Company to redeem,
repay or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions, or at the option of a Holder thereof, and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(i) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
(j) if other than Dollars, the currency or currencies (including any
currency unit or units) in which the principal of (and premium, if any) and
interest and Additional Interest, if any, on the Securities of the series shall
be payable, or in which the Securities of the series shall be denominated and
the manner of determining the equivalent thereof in Dollars for purposes of the
definition of Outstanding;
(k) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;
(l) if, other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(m) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more dates
prior to the Stated Maturity, the amount which shall be deemed to be the
principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall be
due and payable upon any Maturity other than the Stated Maturity or which shall
be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in
any such case, the manner in which such amount deemed to be the principal amount
shall be determined);
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<PAGE> 35
(n) if applicable, that the Securities of the series, in whole or in
any specified part, shall be defeasible and, if other than by a Board
Resolution, the manner in which any election by the Company to defease such
Securities shall be evidenced;
(o) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(p) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
(q) if applicable, that any Securities of the series shall be issuable
in whole or in part in the form of one or more Global Securities and, in such
case, the respective Depositaries for such Global Securities, the form of any
legend or legends that shall be borne by any such Global Security in addition to
or in lieu of that set forth in Section 2.4 and any circumstances in addition to
or in lieu of those set forth in Section 3.5 in which any such Global Security
may be exchanged in whole or in part for Securities registered, and any transfer
of such Global Security in whole or in part may be registered, in the name or
names of Persons other than the Depositary for such Global Security or a nominee
thereof;
(r) the appointment of any Paying Agent or agents for the Securities of
such series;
(s) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the additions
or changes, if any, to this Indenture with respect to the Securities of such
series to permit or facilitate such conversion or exchange;
(t) if such Securities are to be issued to an Issuer Trust, the form or
forms of the Trust Agreement and Guarantee relating thereto;
(u) if, other than as set forth herein, the relative degree, if any, to
which the Securities or the series shall be senior to or be subordinated to
other series of Securities in right of payment, whether such other series of
Securities are Outstanding or not;
(v) any addition to or change in the Events of Default which applies to
any Securities of the series and any change in the right of the Trustee or the
requisite Holders of such Securities to declare the principal amount thereof due
and payable pursuant to Section 5.2;
(w) any addition to or change in the covenants set forth in Article X
which applies to Securities of the series; and
(x) any other terms of the Securities of such series (which terms shall
not be inconsistent with the provisions of this Indenture, except as permitted
by Section 9.1(6)).
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<PAGE> 36
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth, or determined in the manner
provided, in such Officers' Certificate or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIII.
SECTION 3.2. DENOMINATIONS.
The Securities of each series shall be in registered form without
coupons and shall be issuable in minimum denominations of $100,000 and any
integral multiples of $1,000 in excess thereof, unless otherwise specified as
contemplated by Section 3.1(i).
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced or impressed thereon
and attested by its Secretary or one of its Assistant Secretaries. The signature
of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 2.1, that such
form has been established in conformity with the provisions of this
Indenture;
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(2) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 3.1, that such
terms have been established in conformity with the provisions of this
Indenture; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner that
is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers or signatories, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 3.10, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
SECTION 3.4. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon receipt of a Company Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
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If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive securities
of the same series, of any authorized denominations having the same Original
Issue Date and Stated Maturity and having the same terms as such temporary
Securities. Until so exchanged, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
SECTION 3.5. GLOBAL SECURITIES.
(a) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee in writing that such
Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and the
Company is unable to locate a qualified successor, (ii) the Company executes and
delivers to the Trustee a Company Order stating that the Company elects to
terminate the book-entry system through the Depositary, or (iii) there shall
have occurred and be continuing an Event of Default.
(c) If any Global Security is to be exchanged for other Securities or
cancelled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Securities Registrar for exchange or cancellation as provided
in this Article III. If any Global Security is to be exchanged for other
Securities or cancelled in part, or if another Security is to be exchanged in
whole or in part for a beneficial interest in any Global Security, then either
(i) such Global Security shall be so surrendered for exchange or cancellation as
provided in this Article III or (ii) the principal amount thereof shall be
reduced, subject to Section 3.6(b)(v), or increased by an amount equal to the
portion thereof to be so exchanged or cancelled, or equal to the principal
amount of such other Security to be so exchanged for a beneficial interest
therein, as the case may be, by means of an appropriate adjustment made on the
records of the Securities Registrar, whereupon the Trustee, in accordance with
the Applicable Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security by the Depositary, accompanied by
registration instructions, the Trustee shall, subject to Section 3.6(b) and as
otherwise provided in this Article III, authenticate and deliver any Securities
issuable in exchange for such Global
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Security (or any portion thereof) in accordance with the instructions of the
Depositary. The Trustee shall not be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article III, Section 9.6 or 11.6 or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as the registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or agent. Neither the
Trustee nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Depositary.
(f) The rights of owners of beneficial interests in a Global Security
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Agent Members.
SECTION 3.6. REGISTRATION, TRANSFER AND EXCHANGE GENERALLY; CERTAIN
TRANSFERS AND EXCHANGES; SECURITIES ACT LEGENDS.
(a) The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Securities and
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the
offices or agencies of the Company designated for that purpose, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations of like tenor and aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of like tenor and
aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities that the Holder making the exchange is entitled to receive.
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All Securities issued upon any transfer or exchange of Securities shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or
such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (i) to issue, register the transfer of or exchange
any Security of any series during a period beginning at the opening of business
15 days before the day of selection for redemption of Securities of that series
pursuant to Article XI and ending at the close of business on the day of mailing
of the notice of redemption, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except, in the case of
any such Security to be redeemed in part, any portion thereof not to be
redeemed.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Indenture, transfers and exchanges of Securities and
beneficial interests in a Global Security shall be made only in accordance with
this Section 3.6(b).
(i) Restricted Non-Global Security to Global Security. If the
Holder of a Restricted Security (other than a Global Security) wishes
at any time to transfer all or any portion of such Security to a Person
who wishes to take delivery thereof in the form of a beneficial
interest in a Global Security, such transfer may be effected only in
accordance with the provisions of this clause (b)(i) and subject to the
Applicable Procedures. Upon receipt by the Securities Registrar of (A)
such Security as provided in Section 3.6(a) and instructions
satisfactory to the Securities Registrar directing that a beneficial
interest in the Global Security in a specified principal amount not
greater than the principal amount of such Security be credited to a
specified Agent Member's account and (B) a Restricted Securities
Certificate duly executed by such Holder or such Holder's attorney duly
authorized in writing, then the Securities Registrar shall cancel such
Security (and issue a new Security in respect of any untransferred
portion thereof) as provided in Section 3.6(a) and increase the
aggregate principal amount of the Global Security by the specified
principal amount as provided in Section 3.5(c).
(ii) Non-Global Security to Non-Global Security. A Security
that is not a Global Security may be transferred, in whole or in part,
to a Person who takes delivery in the form of another Security that is
not a Global Security as provided in Section 3.6(a), provided that if
the Security to be transferred in whole or in part is a Restricted
Security,
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the Securities Registrar shall have received a Restricted Securities
Certificate duly executed by the transferor Holder or such Holder's
attorney duly authorized in writing.
(iii) Exchanges Between Global Security and Non-Global
Security. A beneficial interest in a Global Security may be exchanged
for a Security that is not a Global Security as provided in Section
3.5.
(iv) Certain Initial Transfers of Non-Global Securities. In
the case of Securities initially issued other than in global form, an
initial transfer or exchange of such Securities that does not involve
any change in beneficial ownership may be made to an Institutional
Accredited Investor or Investors as if such transfer or exchange were
not an initial transfer or exchange; provided that written
certification shall be provided by the transferee and transferor of
such Securities to the Securities Registrar that such transfer or
exchange does not involve a change in beneficial ownership.
(v) Limitations Relating to Principal Amount. Notwithstanding
any other provision of this Indenture and unless otherwise specified as
permitted by Section 3.1; Securities or portions thereof may be
transferred or exchanged only in principal amounts of not less than
$100,000. Any transfer, exchange or other disposition of Securities in
contravention of this Section 3.6(b)(v) shall be deemed to be void and
of no legal effect whatsoever, any such transferee shall be deemed not
to be the Holder or owner of any beneficial interest in such Securities
for any purpose, including but not limited to the receipt of interest
payable on such Securities, and such transferee shall be deemed to have
no interest whatsoever in such Securities.
(c) Restricted Securities Legend. Except as set forth below, all
Securities shall bear a Restricted Securities Legend:
(i) subject to the following clauses of this Section 3.6(c), a
Security or any portion thereof that is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Restricted Securities Legend while represented thereby;
(ii) subject to the following clauses of this Section 3.6(c),
a new Security which is not a Global Security and is issued in exchange
for another Security (including a Global Security) or any portion
thereof, upon transfer or otherwise, shall, if such new Security is
required pursuant to Section 3.6(b)(ii) or (iii) to be issued in the
form of a Restricted Security, bear a Restricted Securities Legend;
(iii) a new Security (other than a Global Security) that does
not bear a Restricted Securities Legend may be issued in exchange for
or in lieu of a Restricted Security or any portion thereof that bears
such a legend if, in the Company's judgment, placing such a legend upon
such new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the written direction of the Company in the form of an Officers'
Certificate, shall authenticate and deliver such a new Security as
provided in this Article III;
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(iv) notwithstanding the foregoing provisions of this Section
3.6(c), a Successor Security of a Security that does not bear a
Restricted Securities Legend shall not bear such form of legend unless
the Company has reasonable cause to believe that such Successor
Security is a "restricted security" within the meaning of Rule 144, in
which case the Trustee, at the written direction of the Company in the
form of an Officers' Certificate, shall authenticate and deliver a new
Security bearing a Restricted Securities Legend in exchange for such
Successor Security as provided in this Article III; and
(v) Securities distributed to a holder of Capital Securities
upon dissolution of an Issuer Trust shall bear a Restricted Securities
Legend if the Capital Securities so held bear a similar legend.
SECTION 3.7. MUTILATED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series,
of like tenor and aggregate principal amount, bearing the same legends, and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series, of like tenor and aggregate principal amount and bearing the
same legends as such destroyed, lost or stolen Security, and bearing a number
not contemporaneously Outstanding.
If any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section 3.7, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of such series duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.8. PAYMENT OF INTEREST AND ADDITIONAL INTEREST; INTEREST
RIGHTS PRESERVED.
Interest and Additional Interest on any Security of any series that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date, shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest in respect of Securities of such series, except
that, unless otherwise provided in the Securities of such series, interest
payable on the Stated Maturity of the principal of a Security shall be paid to
the Person to whom principal is paid. The initial payment of interest on any
Security of any series that is issued between a Regular Record Date and the
related Interest Payment Date shall be payable as provided in such Security or
in the Board Resolution pursuant to Section 3.1 with respect to the related
series of Securities.
Any interest on any Security that is due and payable, but is not timely
paid or duly provided for, on any Interest Payment Date for Securities of such
series (herein called "Defaulted Interest"), shall forthwith cease to be payable
to the registered Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series in
respect of which interest is in default (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon, the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest, which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first class, postage
prepaid, to each Holder of a Security of such series at the address of
such Holder as it appears in the Securities Register not less than 10
days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a
similar notice to be published at least once in a newspaper,
customarily published in the English language on each Business Day and
of
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general circulation in the Borough of Manhattan, The City of New York,
New York, but such publication shall not be a condition precedent to
the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of the series in respect of
which interest is in default may be listed and, upon such notice as may
be required by such exchange (or by the Trustee if the Securities are
not listed), if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this clause 2, such payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue interest, that were carried by such
other Security.
SECTION 3.9. PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the Trustee
shall treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and (subject
to Section 3.8) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as between a Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.
SECTION 3.10. CANCELLATION.
All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
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Securities previously authenticated and delivered hereunder that the Company may
have acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities shall
be destroyed by the Trustee and the Trustee shall deliver to the Company a
certificate of such destruction.
SECTION 3.11. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed in any partial month in such period, and
interest on the Securities of each series for a full period shall be computed by
dividing the rate per annum by the number of interest periods that together
constitute a full twelve months.
SECTION 3.12. DEFERRALS OF INTEREST PAYMENT DATES.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Company shall have the right, at any time during
the term of such series, from time to time to defer the payment of interest on
such Securities for such period or periods (each an "Extension Period") not to
exceed the number of consecutive quarterly, semi-annual or other periods that
equal five years with respect to each Extension Period, during which Extension
Periods the Company shall, if so specified as contemplated by Section 3.1, have
the right to make partial payments of interest on any Interest Payment Date. No
Extension Period shall end on a date other than an Interest Payment Date. At the
end of any such Extension Period, the Company shall pay all interest then
accrued and unpaid on the Securities (together with Additional Interest thereon,
if any, at the rate specified for the Securities of such series to the extent
permitted by applicable law); provided, however, that no Extension Period shall
extend beyond the Stated Maturity of the principal of the Securities of such
series; and provided further, however, that, during any such Extension Period,
the Company shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock, or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or junior in
interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
Subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to
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the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any Rights Plan, or the issuance of rights, stock or other property under
any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or
(e) any dividend in the form of stock, warrants, options or other rights where
the dividend stock or the stock issuable upon exercise of such warrants, options
or other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to that termination of any
such Extension Period, the Company may further defer the payment of interest,
provided that no Event of Default has occurred and is continuing and provided
further, that no Extension Period shall exceed the period or periods specified
in such Securities, extend beyond the Stated Maturity of the principal of such
Securities or end on a date other than an Interest Payment Date. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period, subject to the
above conditions. No interest or Additional Interest shall be due and payable
during an Extension Period, except at the end thereof, but each installment of
interest that would otherwise have been due and payable during such Extension
Period shall bear Additional Interest as and to the extent as may be specified
as contemplated by Section 3.1. The Company shall give the Holders of the
Securities of such series and the Trustee notice of its election to begin any
such Extension Period at least one Business Day prior to the next succeeding
Interest Payment Date on which interest on Securities of such series would be
payable but for such deferral or, with respect to any Securities of a series
issued to an Issuer Trust, so long as any such Securities are held by such
Issuer Trust, at least one Business Day prior to the earlier of (i) the next
succeeding date on which Distributions on the Capital Securities of such Issuer
Trust would be payable but for such deferral, and (ii) the date on which the
Property Trustee of such Issuer Trust is required to give notice to holders of
such Capital Securities of the record date or the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date.
The Trustee shall promptly give notice of the Company's election to
begin any such Extension Period to the Holders of the Outstanding Securities of
such series.
SECTION 3.13. RIGHT OF SET-OFF.
With respect to the Securities of a series initially issued to an
Issuer Trust, notwithstanding anything to the contrary herein, the Company shall
have the right to set off any payment it is otherwise required to make in
respect of any such Security to the extent the Company has theretofore made, or
is concurrently on the date of such payment making, a payment under the
Guarantee relating to such Security or to a holder of Capital Securities
pursuant to an action undertaken under Section 5.8 of this Indenture.
SECTION 3.14. AGREED TAX TREATMENT.
Each Security issued hereunder shall provide that the Company and, by
its acceptance of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, such Security agree that
for United States Federal, state and local tax purposes it is intended that such
Security constitutes indebtedness.
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SECTION 3.15. SHORTENING OR EXTENSION OF STATED MATURITY.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, the Company shall have the right to
(i) shorten the Stated Maturity of the principal of the Securities of such
series at any time to any date and (ii) extend the Stated Maturity of the
principal of the Securities of such series at any time at its election for one
or more periods, provided that, if the Company elects to exercise its right to
extend the Stated Maturity of the principal of the Securities of such series
pursuant to clause (ii) above, at the time such election is made and at the time
of extension, such conditions as may be specified in such Securities shall have
been satisfied.
SECTION 3.16. CUSIP NUMBERS.
The Company, in issuing the Securities, may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notice of redemption and other similar or related materials as a convenience to
Holders; provided that any such notice or other materials may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or other materials
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities that have been destroyed,
lost or stolen and that have been replaced or paid as provided
in Section 3.7 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or
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(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year of the date of
deposit, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of subclause (B)(i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as trust funds
in trust for such purpose an amount in the currency or currencies in
which the Securities of such series are payable sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for the principal (and
premium, if any) and interest (including any Additional Interest) to
the date of such deposit (in the case of Securities that have become
due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the
obligations of the Trustee to any Authenticating Agent under Section
6.14 and, if money shall have been deposited with the Trustee pursuant
to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive.
SECTION 4.2 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest and Additional Interest for the payment of which such money or
obligations have been deposited with or received by the Trustee.
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ARTICLE V
REMEDIES
SECTION 5.1. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to the Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon any Security
of that series, including any Additional Interest in respect thereof,
when it becomes due and payable, and continuance of such default for a
period of 30 days (subject to the deferral of any due date in the case
of any Extension Period); or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Securities of that series or in this Indenture for a
period of 90 days after the date on which written notice of such
failure, requiring the Company to remedy the same, shall have been
given to the Company by the Trustee by registered or certified mail or
to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that
series; or
(4) entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable federal or state law, at appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of substantially all of the property of the
Company, or ordering the winding-up or liquidation of its affairs, and
the continuance of any such decree of order for relief or any such
other decree or order unstayed and in effect for a period of 90
consecutive days; or
(5) (A) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or (B) the
consent by the Company or the entry of a decree of order for relief in
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respect of itself in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company, or (C) the filing by
the Company of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state law or (D) the consent
by the Company to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of
all or substantially all of the property of the Company, or (E) the
making by the Company of an assignment for the benefit of creditors; or
(6) any other Event of Default provided with respect to
Securities of that series.
SECTION 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4)) with respect to Securities of any series at the time Outstanding
occurs and is continuing, then, and in every such case, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided that, in the case of
the Securities of a series issued to an Issuer Trust, if, upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of such series fail to declare the principal of all
the Outstanding Securities of such series to be immediately due and payable, the
holders of at least 25% in aggregate Liquidation Amount of the related series of
Capital Securities issued by such Issuer Trust then outstanding shall have the
right to make such declaration by a notice in writing to the Company and the
Trustee; and upon any such declaration such principal amount (or specified
portion thereof) of and the accrued interest (including any Additional Interest)
on all the Securities of such series shall become immediately due and payable.
If an Event of Default specified in Section 5.1(4) with respect to Securities of
any series at the time Outstanding occurs, the principal amount of all the
Securities of such series (or, if the Securities of such series are Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms of that series) shall automatically, and without any
declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable. Payment of principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIII notwithstanding that such amount shall become
immediately due and payable as herein provided.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on all
Securities of such series;
(B) any accrued Additional Interest on all Securities
of such series;
(C) the principal of (and premium, if any, on) any
Securities of such series that have become due otherwise than
by such declaration of acceleration and interest and
Additional Interest thereon at the rate borne by the
Securities; and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.13.
In the case of Securities of a series initially issued to an Issuer
Trust, if the Holders of such Securities fail to annul such declaration and
waive such default, the holders of a majority in aggregate Liquidation Amount of
the related series of Capital Securities issued by such Issuer Trust then
outstanding shall also have the right to rescind and annul such declaration and
its consequences by written notice to the Company and the Trustee, subject to
the satisfaction of the conditions set forth in clauses (1) and (2) above of
this section 5.2.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if:
(1) default is made in the payment of any installment of
interest (including any Additional Interest) on any Security of any
series when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (and
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for
the benefit of the Holders of such Securities, the whole amount then
due and payable on such Securities for principal (and premium, if any)
and interest (including any Additional Interest), and, in addition
thereto, all amounts owing the Trustee under Section 6.7.
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If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
monies adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial or
administrative proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
(a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal (and
premium, if any) or interest (including any Additional Interest)) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest (including any Additional
Interest) owing and unpaid in respect to the Securities and to file
such other papers or documents as may be necessary or advisable and to
take any and all actions as are authorized under the Trust Indenture
Act in order to have the claims of the Holders and any predecessor to
the Trustee under Section 6.7 allowed in any such judicial or
administrative proceedings; and
(ii) in particular, the Trustee shall be authorized to collect
and receive any monies or other property payable or deliverable on any
such claims and to distribute the same in accordance with Section 5.6;
and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator, conservator (or other similar official) in any such judicial or
administrative proceeding is hereby authorized by each Holder to make such
payments to the Trustee for distribution in accordance with Section 5.6, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it and any predecessor
Trustee under Section 6.7.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5. TRUSTEE MAY ENFORCE CLAIM WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, subject to
Article XIII and after provision for the payment of all the amounts owing the
Trustee and any predecessor Trustee under Section 6.7, its agents and counsel,
be for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 5.6. APPLICATION OF MONEY COLLECTED.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then due
and unpaid upon Securities of such series for principal (and premium, if any)
and interest (including any Additional Interest) in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such series of
Securities for principal (and premium, if any) and interest (including any
Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7. LIMITATION ON SUITS.
Subject to Section 5.8, no Holder of any Securities of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or for the appointment of a receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) or for any other remedy
hereunder, unless:
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(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by
availing itself of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holders of Securities, or to
obtain or to seek to obtain priority or preference over any other of
such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all
such Holders.
SECTION 5.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST; DIRECT ACTION BY HOLDERS OF CAPITAL SECURITIES.
Notwithstanding any other provision in this Indenture, the Holder of
any Security of any series shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Sections 3.8 and 3.12) interest (including any Additional Interest)
on such Security on the respective Stated Maturities expressed in such Security
(or in the case of redemption, on the Redemption Date) and to institute suit for
the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder. In the case of Securities of a series issued
to an Issuer Trust, any registered holder of the series of Capital Securities
issued by such Issuer Trust shall have the right, upon the occurrence of an
Event of Default described in Section 5.1(1) or 5.1(2), to institute a suit
directly against the Company for enforcement of payment to such holder of
principal of (premium, if any) and (subject to Sections 3.8 and 3.12) interest
(including any Additional Interest) on the Securities having a principal amount
equal to the aggregate Liquidation Amount of such Capital Securities held by
such holder.
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SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee, any Holder or any holder of Capital Securities issued
by any Issuer Trust has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee, such Holder or such
holder of Capital Securities, then, and in every such case, the Company, the
Trustee, such Holders and such holder of Capital Securities shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, such Holder and such holder of Capital Securities shall continue as
though no such proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 3.7, no
right or remedy herein conferred upon or reserved to the Trustee or the Holders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee, any Holder of any Security with
respect to the Securities of the related series or any holder of any Capital
Security to exercise any right or remedy accruing upon any Event of Default with
respect to the Securities of the related series shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein.
Every right and remedy given by this Article or by law to the Trustee
or to the Holders and the right and remedy given to the holders of Capital
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of Capital
Securities, as the case may be.
SECTION 5.12. CONTROL BY HOLDERS.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
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(2) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; and
(3) subject to the provisions of Section 6.1, the Trustee
shall have the right to decline to follow such direction if a
Responsible Officer or Officers of the Trustee shall, in good faith,
determine that the proceeding so directed would be unjustly prejudicial
to the Holders not joining in any such direction or would involve the
Trustee in personal liability.
SECTION 5.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series affected thereby and, in the case of
any Securities of a series initially issued to an Issuer Trust, the holders of a
majority in aggregate Liquidation Amount of the Capital Securities issued by
such Issuer Trust may waive any past default hereunder and its consequences with
respect to such series except a default:
(1) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security of such
series (unless such default has been cured and the Company has paid to
or deposited with the Trustee a sum sufficient to pay all matured
installments of interest (including Additional Interest) and all
principal of (and premium, if any, on) all Securities of that series
due otherwise than by acceleration); or
(2) in respect of a covenant or provision hereof that under
Article IX cannot be modified or amended without the consent of each
Holder of any Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all
the Securities of such series, or in the case of waiver by holders of Capital
Securities issued by such Issuer Trust, by all holders of Capital Securities
issued by such Issuer Trust.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may, in
its discretion, require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may, in its
discretion, assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in
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aggregate principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest (including any Additional
Interest) on any Security on or after the respective Stated Maturities expressed
in such Security.
SECTION 5.15. WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture, but in the case of any such certificates or opinions
that by any provisions hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(c) 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
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(1) this subsection shall not be construed to limit the effect
of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of Holders pursuant to Section 5.12 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of a
series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.2. NOTICE OF DEFAULTS.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of Securities of such series; and provided further,
that, in the case of any default of the character specified in Section 5.1(3),
no such notice to Holders of Securities of such series shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
SECTION 6.3. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.1:
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(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, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction;
(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, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(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.
SECTION 6.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
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SECTION 6.5. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Securities
Registrar or such other agent.
SECTION 6.6. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 6.7. COMPENSATION AND REIMBURSEMENT.
(a) The Company agrees to pay to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder in such
amounts as the Company and the Trustee shall agree from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust).
(b) The Company agrees to reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith.
(c) Since the Issuer Trust is being formed solely to facilitate an
investment in the Trust Securities, the Company, as Holder of the Common
Securities, hereby covenants to pay all debts and obligations (other than with
respect to the Capital Securities and the Common Securities) and all reasonable
costs and expenses of the Issuer Trust (including without limitation all
reasonable costs and expenses relating to the organization of the Issuer Trust,
the fees and expenses of the trustees and all costs and expenses relating to the
operation of the Issuer Trust) and to pay any and all taxes, duties, assessments
or governmental charges of whatever nature (other than withholding taxes)
imposed on the Issuer Trust by the United States, or any taxing authority, so
that the net amounts received and retained by the Issuer Trust and the Property
Trustee after paying such expenses will be equal to the amounts the Issuer Trust
and the Property Trustee would have received had no such costs or expenses been
incurred by or imposed on the Issuer Trust. The foregoing obligations of the
Company are for the benefit of, and shall be enforceable by, any person to whom
any such debts, obligations, costs, expenses and taxes are owed (each, a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations directly against the Company, and the
Company irrevocably waives any right or remedy to require that any such Creditor
take any action against the Issuer Trust or any other person before proceeding
against the Company. The Company shall execute such additional agreements as may
be necessary or desirable to give full effect to the foregoing.
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(d) The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense (including the reasonable compensation
and the expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the reasonable costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. This indemnification shall survive the termination
of this Indenture or the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration under the
Bankruptcy Reform Act of 1978 or any successor statute.
SECTION 6.8. DISQUALIFICATION; CONFLICTING INTERESTS.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of said Section 310(b).
SECTION 6.9. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be:
(a) an entity organized and doing business under the laws of the United
States of America or of any state or territory thereof or of the District of
Columbia, authorized under such laws to exercise corporate trust powers and
subject to supervision or examination by Federal, state, territorial or District
of Columbia authority; or
(b) an entity or other Person organized and doing business under the
laws of a foreign government that is permitted to act as Trustee pursuant to a
rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees;
in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or state authority. If such
entity publishes reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority, then, for
the purposes of this Section, the combined capital and surplus of such entity
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect
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hereinafter specified in this Article. Neither the Company nor any Person
directly or indirectly controlling, controlled by or under common control with
the Company shall serve as Trustee for the Securities of any series issued
hereunder.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months; or
(2) the Trustee shall cease to be eligible under Section 6.9
and shall fail to resign after written request therefor by the Company or by any
such Holder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, (i) the Company, acting pursuant to the authority of a
Board Resolution, may remove the Trustee with respect to the Securities of all
series issued hereunder, or (ii) subject to Section 5.14, any Holder who has
been a bona fide Holder of a Security for at least six months may, on behalf of
such Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to the Securities of
all series issued hereunder and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such resignation,
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removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the Securities of such
series and supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, subject to Section 5.14, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one
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Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees or co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each removal of the retiring Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.
(d) 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.
SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such entity
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated, and in case any Securities shall not
have been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor Trustee or in the name of such
successor Trustee, and in all cases the certificate of authentication shall have
the full force which it is provided anywhere in the Securities or in this
Indenture that the certificate of the Trustee shall have.
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
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SECTION 6.14. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities, which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be an entity organized and doing business under
the laws of the United States of America, or of any state or territory thereof
or of the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or state
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any entity into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any entity succeeding to all or substantially all of the corporate
trust business of an Authenticating Agent shall be the successor Authenticating
Agent hereunder, provided such entity shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent, which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance hereunder shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provision of
this Section.
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The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payment, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:___________ BANKERS TRUST COMPANY,
as Trustee
By:
-----------------------
As Authenticating Agent
Name:
Title:
By:
-----------------------
Authorized Signatory
Name:
Title:
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE,
PAYING AGENT AND COMPANY
SECTION 7.1. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after June 15 and December 15
in each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such date; 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, excluding from any such list names and addresses received by the
Trustee in its capacity as Securities Registrar.
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SECTION 7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. REPORTS BY TRUSTEE AND PAYING AGENT.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act, at the times and in the manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than January 31 in each
calendar year, commencing with the first January 31 after the first issuance of
Securities under this Indenture.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each securities exchange upon which any
Securities are listed and also with the Commission. The Company will notify the
Trustee when any Securities are listed on any securities exchange.
(d) The Paying Agent shall comply with all withholding, backup
withholding, tax and information reporting requirements under the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations issued thereunder
with respect to payments on, or with respect to, the Securities.
SECTION 7.4. REPORTS BY COMPANY.
The Company shall file or cause to be filed with the Trustee and with
the Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided in the Trust Indenture
Act. In the case of information, documents or reports required to be filed with
the Commission pursuant to Section 13(a) or Section 15(d) of the Exchange Act,
the
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Company shall file or cause the filing of such information documents or reports
with the Trustee within 15 days after the same are required to be filed with the
Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:
(1) If the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the entity formed by such
consolidation or into which the Company is merged or the Person that
acquires by conveyance or transfer, or that leases, the properties and
assets of the Company substantially as an entirety shall be an entity
organized and existing under the laws of the United States of America
or any state thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any), and interest
(including any Additional Interest) on all the Securities of every
series and the performance of every covenant of this Indenture on the
part of the Company to be performed or observed; provided, however,
that nothing herein shall be deemed to restrict or prohibit, and no
supplemental indenture shall be required in the case of, the merger of
a Principal Subsidiary Bank with and into a Principal Subsidiary Bank
or the Company, the consolidation of Principal Subsidiary Banks into a
Principal Subsidiary Bank or the Company, or the sale or other
disposition of all or substantially all of the assets of any Principal
Subsidiary Bank to another Principal Subsidiary Bank or the Company,
if, in any such case in which the surviving, resulting or acquiring
entity is not the Company, the Company would own, directly or
indirectly, at least 80% of the voting securities of the Principal
Subsidiary Bank (and of any other Principal Subsidiary Bank any voting
securities of which are owned, directly or indirectly, by such
Principal Subsidiary Bank) surviving such merger, resulting from such
consolidation or acquiring such assets;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event that, after notice or lapse of time, or
both, would constitute an Event of Default, shall have occurred and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with and, in
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the case of a transaction subject to this Section 8.1 but not requiring
a supplemental indenture under paragraph (1) of this Section 8.1, an
Officer's Certificate or Opinion of Counsel to the effect that the
surviving, resulting or successor entity is legally bound by the
Indenture and the Securities; and the Trustee, subject to Section 6.1,
may rely upon such Officers' Certificates and Opinions of Counsel as
conclusive evidence that such transaction complies with this Section
8.1.
SECTION 8.2. SUCCESSOR COMPANY SUBSTITUTED.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
8.1, the successor entity formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein; and in the event of any such conveyance,
transfer or lease the Company shall be discharged from all obligations and
covenants under the Indenture and the Securities.
Such successor Person may cause to be executed, and may issue either in
its own name or in the name of the Company, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities that such successor Person thereafter shall cause
to be executed and delivered to the Trustee on its behalf for the purpose
pursuant to such provisions. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may amend
or waive any provision of this Indenture or may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
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(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Securities contained; or
(2) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee or to surrender any right or power
herein conferred upon the Company; or
(3) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 or 3.1; or
(4) to facilitate the issuance of Securities of any series in
certificated or other definitive form; or
(5) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of the series specified) or to surrender any right or power
herein conferred upon the Company; or
(6) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional
Events of Defaults are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are
expressly being included solely for the benefit of the series
specified); or
(7) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall (a)
become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental indenture
that is entitled to the benefit of such provision or (b) not apply to
any Outstanding Securities; or
(8) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this clause (8) shall not adversely affect the
interest of the Holders of Securities of any series in any material
respect or, in the case of the Securities of a series issued to an
Issuer Trust and for so long as any of the corresponding series of
Capital Securities issued by such Issuer Trust shall remain
outstanding, the holders of such Capital Securities; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.11(b); or
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(10) to comply with the requirements of the Commission in
order to effect or maintain the qualification of this Indenture under
the Trust Indenture Act.
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
by such supplemental indenture, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security of each series affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, any
Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or
reduce the amount of principal of a Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2, or change the place of payment where, or the
coin or currency in which, any Security or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 5.13
or Section 10.5, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Security affected
thereby;
provided, further, that, in the case of the Securities of a series
issued to an Issuer Trust, so long as any of the corresponding series
of Capital Securities issued by such Issuer Trust remains outstanding,
(i) no such amendment shall be made that adversely affects the holders
of such Capital Securities in any material respect, and no termination
of this Indenture shall occur, and no waiver of any Event of Default or
compliance with any covenant under this Indenture shall be effective,
without the prior consent of the holders of at least a majority of the
aggregate Liquidation Amount of such Capital Securities then
outstanding unless and until the principal of (and premium, if any, on)
the Securities of such series and all accrued and (subject to Section
3.8) unpaid interest (including
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any Additional Interest) thereon have been paid in full, and (ii) no
amendment shall be made to Section 5.8 of this Indenture that would
impair the rights of the holders of Capital Securities issued by an
Issuer Trust provided therein without the prior consent of the holders
of each such Capital Security then outstanding unless and until the
principal of (and premium, if any, on) the Securities of such series
and all accrued and (subject to Section 3.8) unpaid interest (including
any Additional Interest) thereon have been paid in full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities or any corresponding
series of Capital Securities of an Issuer Trust that holds the Securities of any
series, or that modifies the rights of the Holders of Securities of such series
or holders of such Capital Securities of such corresponding series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series or holders
of Capital Securities of any other such corresponding series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent herein provided for relating to such action have
been complied with. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
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SECTION 9.6. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including any Additional Interest) on the Securities of
that series in accordance with the terms of such Securities and this Indenture.
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company initially appoints the Trustee, acting through its
Corporate Trust Office, as its agent for said purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain such office
or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation and any
change in the location of any such office or agency.
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SECTION 10.3. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest (including Additional Interest)
on any of the Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest (including Additional Interest) so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to 10:00 a.m., New York City time, on each due date of the principal of
(or premium, if any) or interest, including Additional Interest on any
Securities, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest, including Additional Interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal (and premium, if any) or interest, including Additional Interest,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest (including Additional Interest) on
the Securities of a series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon such Securities) in the making of any payment of
principal (and premium, if any) or interest (or Additional Interest) in
respect of any Security of any Series;
(3) at any time during the continuance of any default with
respect to a series of Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent with respect to such series; and
(4) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent.
The Company may, at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
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Any money deposited with the Trustee or any Paying Agent, or then held
by the Company in trust for the payment of the principal of (and premium, if
any) or interest (including Additional Interest) on any Security and remaining
unclaimed for two years after such principal (and premium, if any) or interest
(including Additional Interest) has become due and payable shall (unless
otherwise required by mandatory provision of applicable escheat or abandoned or
unclaimed property law) be paid on Company Request to the Company, or (if then
held by the Company) shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, the City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 10.4. STATEMENT AS TO COMPLIANCE.
The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate covering the preceding calendar year, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants and conditions of this Indenture, and if the Company shall
be in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge. For the purpose of this Section 10.4, compliance
shall be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
SECTION 10.5. WAIVER OF CERTAIN COVENANTS.
Subject to the rights of holders of Capital Securities specified in
Section 9.2, if any, the Company may omit in any particular instance to comply
with any covenant or condition provided pursuant to Section 3.1, 9.1(3) or
9.1(4) with respect to the Securities of any series, if before or after the time
for such compliance the Holders of at least a majority in aggregate principal
amount of the Outstanding Securities of such series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company in
respect of any such covenant or condition shall remain in full force and effect.
SECTION 10.6. ADDITIONAL SUMS.
In the case of the Securities of a series initially issued to an Issuer
Trust, so long as no Event of Default has occurred and is continuing and except
as otherwise specified as
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contemplated by Section 2.1 or Section 3.1, if (i) an Issuer Trust is the Holder
of all of the Outstanding Securities of such series, and (ii) a Tax Event has
occurred and is continuing in respect of such Issuer Trust, the Company shall
pay to such Issuer Trust (and its permitted successors or assigns under the
related Trust Agreement) for so long as such Issuer Trust (or its permitted
successor or assignee) is the registered holder of the Outstanding Securities of
such series, such additional sums as may be necessary in order that the amount
of Distributions (including any Additional Amounts (as defined in such Trust
Agreement)) then due and payable by such Issuer Trust on the related Capital
Securities and Common Securities that at any time remain outstanding in
accordance with the terms thereof shall not be reduced as a result of such
Additional Taxes (the "Additional Sums"). Whenever in this Indenture or the
Securities there is a reference in any context to the payment of principal of or
interest on the Securities, such mention shall be deemed to include mention of
the payments of the Additional Sums provided for in this paragraph to the extent
that, in such context, Additional Sums are, were or would be payable in respect
thereof pursuant to the provisions of this paragraph and express mention of the
payment of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided, however, that the deferral of the payment
of interest pursuant to Section 3.12 on the Securities shall not defer the
payment of any Additional Sums that may be due and payable.
SECTION 10.7. ADDITIONAL COVENANTS.
The Company covenants and agrees with each Holder of Securities of each
series that it shall not (x) declare or pay any dividends or distributions on,
or redeem, purchase, acquire or make a liquidation payment with respect to, any
shares of the Company's capital stock, or (y) make any payment of principal of
or interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or junior in
interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period or other event referred to below, (b) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a Subsidiary of the Company) for any
class or series of the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's capital stock,
(c) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (d) any declaration of a dividend in
connection with any Rights Plan, or the issuance of rights, stock or other
property under any Rights Plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock) if at
such time (i) there shall have occurred any event (A) of which the Company has
actual knowledge that with the
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giving of notice or the lapse of time, or both, would constitute an Event of
Default with respect to the Securities of such series, and (B) which the Company
shall not have taken reasonable steps to cure, (ii) if the Securities of such
series are held by an Issuer Trust, the Company shall be in default with respect
to its payment of any obligations under the Guarantee relating to the Capital
Securities issued by such Issuer Trust, or (iii) the Company shall have given
notice of its election to begin an Extension Period with respect to the
Securities of such series as provided herein and shall not have rescinded such
notice, or such Extension Period, or any extension thereof, shall be continuing.
The Company also covenants with each Holder of Securities of a series
issued to an Issuer Trust (i) to hold, directly or indirectly, 100% of the
Common Securities of such Issuer Trust, provided that any permitted successor of
the Company as provided under Section 8.2 may succeed to the Company's ownership
of such Common Securities, (ii) as holder of such Common Securities, not to
voluntarily terminate, windup or liquidate such Issuer Trust, other than (a) in
connection with a distribution of the Securities of such series to the holders
of the related Capital Securities in liquidation of such Issuer Trust, or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement, and (iii) to use its reasonable efforts, consistent
with the terms and provisions of such Trust Agreement, to cause such Issuer
Trust to continue not to be taxable as a corporation for United States Federal
income tax purposes.
SECTION 10.8. ORIGINAL ISSUE DISCOUNT.
On or before December 15 of each year during which any Securities are
outstanding, the Company shall furnish to each Paying Agent such information as
may be reasonably requested by each Paying Agent in order that each Paying Agent
may prepare the information which it is required to report for such year on
Internal Revenue Service Forms 1096 and 1099 pursuant to Section 6049 of the
Internal Revenue Code of 1986, as amended. Such information shall include the
amount of original issue discount includible in income for each authorized
minimum denomination of principal amount at Stated Maturity of outstanding
Securities during such year.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. APPLICABILITY OF THIS ARTICLE.
Redemption of Securities of any series as permitted or required by any
form of Security issued pursuant to this Indenture shall be made in accordance
with such form of Security and this Article; provided, however, that, if any
provision of any such form of Security shall conflict with any provision of this
Article, the provision of such form of Security shall govern. Except as
otherwise set forth in the form of Security for such series, each Security of a
series shall be subject to partial redemption only in the amount of $100,000 or
any integral multiples of $1,000 in excess thereof.
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SECTION 11.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election
of the Company, the Company shall, not less than 30 nor more than 60 days prior
to the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee and, in the case of Securities of a series held by
an Issuer Trust, the Property Trustee under the related Trust Agreement, of such
date and of the principal amount of Securities of the applicable series to be
redeemed and provide the additional information required to be included in the
notice or notices contemplated by Section 11.4; provided that, in the case of
any series of Securities initially issued to an Issuer Trust, for so long as
such Securities are held by such Issuer Trust, such notice shall be given not
less than 45 nor more than 75 days prior to such Redemption Date (unless a
shorter notice shall be satisfactory to the Property Trustee under the related
Trust Agreement). In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
and an Opinion of Counsel evidencing compliance with such restriction.
SECTION 11.3. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.
The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security that has been or is to be
redeemed.
SECTION 11.4. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the thirtieth day, and not earlier than the
sixtieth day, prior to the Redemption Date, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register.
With respect to Securities of such series to be redeemed, each notice
of redemption shall state:
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(a) the Redemption Date;
(b) the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the estimate of
the Redemption Price provided pursuant to the Indenture together with a
statement that it is an estimate and that the actual Redemption Price will be
calculated on the third Business Day prior to the Redemption Date (if such an
estimate of the Redemption Price is given, a subsequent notice shall be given as
set forth above setting forth the Redemption Price promptly following the
calculation thereof);
(c) if less than all Outstanding Securities of such particular series
are to be redeemed, the identification (and, in the case of partial redemption,
the respective principal amounts) of the particular Securities to be redeemed;
(d) that, on the Redemption Date, the Redemption Price will become due
and payable upon each such Security or portion thereof, and that interest
thereon, if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price;
(f) such other provisions as may be required in respect of the terms of
a particular series of Securities; and
(g) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice, if mailed in the manner provided above, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
SECTION 11.5. DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m., New York City time, on the Redemption Date
specified in the notice of redemption given as provided in Section 11.4, the
Company will deposit with the Trustee or with one or more Paying Agents (or if
the Company is acting as its own Paying Agent, the Company will segregate and
hold in trust as provided in Section 10.3) an amount of money sufficient to pay
the Redemption Price of, and any accrued interest (including Additional
Interest) on, all the Securities (or portions thereof) that are to be redeemed
on that date.
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SECTION 11.6. PAYMENT OF SECURITIES CALLED FOR REDEMPTION.
If any notice of redemption has been given as provided in Section 11.4,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with accrued
interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said Securities or the specified portions thereof shall be
paid and redeemed by the Company at the applicable Redemption Price, together
with accrued interest (including any Additional Interest) to the Redemption
Date; provided, however, that, unless otherwise specified as contemplated by
Section 3.1, installments of interest (including Additional Interest) whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant record dates according to their
terms and the provisions of Section 3.8.
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of the same
series, of authorized denominations, in aggregate principal amount equal to the
unredeemed portion of the Security so presented and having the same Original
Issue Date, Stated Maturity and terms.
If any Security called for redemption shall not be so paid under
surrender thereof for redemption, the principal of and premium, if any, on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
SECTION 11.7. RIGHT OF REDEMPTION OF SECURITIES INITIALLY ISSUED TO AN
ISSUER TRUST.
In the case of the Securities of a series initially issued to an Issuer
Trust, except as otherwise specified as contemplated by Section 3.1, the
Company, at its option, may redeem such Securities (i) on or after the date
specified in such Security, in whole at any time or in part from time to time,
or (ii) upon the occurrence and during the continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event, at any time within 90
days following the occurrence and during the continuation of such Tax Event,
Investment Company Event or Capital Treatment Event, in whole (but not in part),
in each case at a Redemption Price specified in such Security, together with
accrued interest (including Additional Interest) to the Redemption Date.
If less than all the Securities of any such series are to be redeemed,
the aggregate principal amount of such Securities remaining Outstanding after
giving effect to such redemption shall be sufficient to satisfy any provisions
of the Trust Agreement related to the Issuer Trust to which such Securities were
issued.
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ARTICLE XII
SINKING FUNDS
Except as may be provided in any supplemental or amended indenture, no
sinking fund shall be established or maintained for the retirement of Securities
of any series.
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the payment of the principal
of (and premium, if any) and interest (including any Additional Interest) on
each and all of the Securities of each and every series are hereby expressly
made subordinate and subject in right of payment to the prior payment in full of
all Senior Indebtedness.
SECTION 13.2. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT; PAYMENT
OVER OF PROCEEDS UPON DISSOLUTION, ETC.
If the Company shall default in the payment of any principal of (or
premium, if any) or interest on any Senior Indebtedness when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, then, upon written notice of such
default to the Company by the holders of Senior Indebtedness or any trustee
therefor, unless and until such default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the principal of (or premium, if any) or interest (including
Additional Interest) on any of the Securities, or in respect of any redemption,
repayment, retirement, purchase or other acquisition of any of the Securities.
In the event of (i) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to the Company, its creditors or its property, (ii) any
proceeding for the liquidation, dissolution or other winding-up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (iii) any assignment by the Company for the benefit of creditors or
(iv) any other marshalling of the assets of the Company (each such event, if
any, herein sometimes referred to as a "Proceeding"), all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made to any Holder of
any of the Securities on account thereof. Any payment or distribution, whether
in cash, securities or other property (other than securities of the Company or
any other entity provided for by a plan of reorganization or
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readjustment, the payment of which is subordinate, at least to the extent
provided in these subordination provisions with respect to the indebtedness
evidenced by the Securities, to the payment of all Senior Indebtedness at the
time outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), which would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the Securities
of any series shall be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any Proceeding) shall have been paid in full.
In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior Indebtedness, the Holders of the Securities, together
with the holders of any obligations of the Company ranking on a parity with the
Securities, shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of unpaid principal of
(and premium, if any) and interest on the Securities and such other obligations
before any payment or other distribution; whether in cash, property or
otherwise, shall be made on account of any capital stock or any obligations of
the Company ranking junior to the Securities, and such other obligations. If,
notwithstanding the foregoing, any payment or distribution of any character or
any security, whether in cash, securities or other property (other than
securities of the Company or any other entity provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any plan of reorganization or readjustment), shall be received by
the Trustee or any Holder in contravention of any of the terms hereof and before
all Senior Indebtedness shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Indebtedness at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any Holder
to endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
The Trustee and the Holders shall take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Indebtedness or consent to the filing of a financing statement with respect
hereto) as may, in the opinion of counsel designated by the holders of a
majority in principal amount of the Senior Indebtedness at the time outstanding,
be necessary or appropriate to assure the effectiveness of the subordination
effected by these provisions.
The provisions of this Section 13.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Company in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
The securing of any obligations of the Company, otherwise ranking on a
parity with the Securities or ranking junior to the Securities shall not be
deemed to prevent such obligations from
76
<PAGE> 83
constituting, respectively, obligations ranking on a parity with the Securities
or ranking junior to the Securities.
SECTION 13.3. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time, except during
the pendency of the conditions described in the first paragraph of Section 13.2
or of any Proceeding referred to in Section 13.2, from making payments at any
time of principal of (and premium, if any) or interest (including Additional
Interest) on the Securities, or (b) the application by the Trustee of any monies
deposited with it hereunder to the payment of or on account of the principal of
(and premium, if any) or interest (including any Additional Interest) on the
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.
SECTION 13.4. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the payment in full of all amounts due or to become due on
all Senior Indebtedness, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of the Company that by its express terms is subordinated to
Senior Indebtedness of the Company to substantially the same extent as the
Securities are subordinated to the Senior Indebtedness and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Indebtedness) to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium if any) and interest (including Additional Interest) on the Securities
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Indebtedness
by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
SECTION 13.5. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall: (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest (including any
77
<PAGE> 84
Additional Interest) on the Securities as and when the same shall become due and
payable in accordance with their terms; or (b) affect the relative rights
against the Company of the Holders of the Securities and creditors of the
Company other than their rights in relation to the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security (or to
the extent expressly provided herein, the holder of any Capital Security) from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, including filing and voting claims in any Proceeding, subject to
the rights, if any, under this Article of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 13.6. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by his or her acceptance thereof authorizes
and directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination provided
in this Article and appoints the Trustee his or her attorney-in-fact for any and
all such purposes.
SECTION 13.7. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
be otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities of any series, without incurring responsibility to such Holders of
the Securities and without impairing or releasing the subordination provided in
this Article or the obligations hereunder of such Holders of the Securities to
the holders of Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extent the time of payment of,
or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 13.8. NOTICE TO TRUSTEE.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other
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<PAGE> 85
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a holder of Senior
Indebtedness or from any trustee, agent or representative therefor; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, the
payment of the principal of (and premium, if any, on) or interest (including any
Additional Interest) on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself or herself to be a holder of Senior Indebtedness (or a trustee or
attorney-in-fact therefor) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee or attorney-in-fact therefor). In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 13.9. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, conservator,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 13.10. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS.
The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and
shall not be liable to any such holders if it shall in good faith mistakenly pay
over or distribute to Holders of Securities or to the
79
<PAGE> 86
Company or to any other Person cash, property or securities to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 13.11. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness that
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
SECTION 13.12. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee.
SECTION 13.13. CERTAIN CONVERSIONS OR EXCHANGES DEEMED PAYMENT.
For purposes of this Article only, (a) the issuance and delivery of
junior securities upon conversion or exchange of Securities of any series shall
not be deemed to constitute a payment or distribution on account of the
principal of (or premium, if any, on) or interest (including any Additional
Interest) on such Securities or on account of the purchase or other acquisition
of such Securities, and (b) the payment, issuance or delivery of cash, property
or securities (other than junior securities) upon conversion or exchange of a
Security of any series shall be deemed to constitute payment on account of the
principal of such security. For the purposes of this Section, the term "junior
securities" means (i) shares of any stock of any class of the Company, and (ii)
securities of the Company that are subordinated in right of payment to all
Senior Indebtedness that may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article.
* * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
[Remainder of page left intentionally blank; signatures appear on following
page.]
80
<PAGE> 87
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: TRIANGLE BANCORP, INC.
-----------------
By:
---------------------
Name:
Title:
Attest: BANKERS TRUST COMPANY, as Trustee,
----------------- and not in its individual capacity
By:
---------------------
Name:
Title:
81
<PAGE> 88
ANNEX A
FORM OF RESTRICTED SECURITIES CERTIFICATE
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 3.6(b) of
the Indenture referred to below)
[ ],
as Securities Registrar
[address]
Re: [Title of Securities] of Triangle Bancorp, Inc. (the "Securities")
Reference is made to the Junior Subordinated Indenture, dated as of
June 3, 1997 (the "Indenture"), between Triangle Bancorp, Inc., a North Carolina
corporation, and Bankers Trust Company, as Trustee. Terms used herein and
defined in the Indenture or in Regulation S, Rule 144A or Rule 144 under the
U.S. Securities Act of 1933 (the "Securities Act") are used here as so defined.
This certificate relates to $ aggregate principal amount of Securities,
which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
CERTIFICATE No(s).
CURRENTLY IN GLOBAL FORM: Yes ____ No ____ (check one)
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through a Depositary or an Agent Member in the name of the Undersigned, as or on
behalf of the Owner. If the Specified Securities are not represented by a Global
Security, they are registered in the name of the Undersigned, as or on behalf of
the Owner.
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<PAGE> 89
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A, Rule 904 of Regulation S or Rule 144 under the Securities Act and all
applicable securities laws of the states of the United States and other
jurisdictions.
Accordingly, the Owner hereby further certifies that
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to
a person that the Owner and any person acting on its behalf
reasonably believe is a "qualified institutional buyer" within
the meaning of Rule 144A, acquiring for its own account or for
the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf
have taken reasonable steps to ensure that the Transferee is
aware that the Owner may be relying on Rule 144A in connection
with the transfer; and
(2) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities,
an affiliate of the Company or any such distributor or a
person acting in behalf of any of the foregoing;
(B) the offer of the Specified Securities was not
made to a person in the United States;
(C) either;
(i) at the time the buy order was
originated, the Transferee was outside the United
States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was
outside the United States, or
(ii) the transaction is being executed in,
on or through the facilities of the Eurobond market,
as regulated by the Association of International Bond
Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on
its behalf know that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts within the meaning of
Rule 902 of Regulation S have been made in the United States
by or on behalf of the Owner or any affiliate thereof; and
83
<PAGE> 90
(E) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act.
(3) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least two years (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the date the Specified
Securities were acquired from the Company or from an affiliate
(as such term is defined in Rule 144), or such shorter period
as Rule 144 may hereinafter require, of the Company, whichever
is later, and is being effected in accordance with the
applicable amount, manner of sale and notice requirements of
paragraphs (e), (f) and (h) of Rule 144;
(B) the transfer is occurring after a holding period
by the Owner of at least three years has elapsed since the
date the Specified Securities were acquired from the Company
or from an affiliate (as such term is defined in Rule 144) of
the Company, whichever is later, and the Owner is not, and
during the preceding three months has not been, an affiliate
of the Company; or
(C) the Owner is a Qualified Institutional Buyer
under Rule 144A or has acquired the Securities otherwise in
accordance with Sections (1), (2) or (3) hereof and is
transferring the Securities to an institutional accredited
investor in a transaction exempt from the requirements of the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers (as defined in
the Trust Agreement relating to the Issuer Trust to which the Securities were
initially issued).
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
Dated: By:
------------------ ----------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
84
<PAGE> 1
EXHIBIT 4.2
AMENDED AND RESTATED
TRUST AGREEMENT
among
TRIANGLE BANCORP, INC.,
as Depositor,
BANKERS TRUST COMPANY
as Property Trustee,
and
BANKERS TRUST (DELAWARE),
as Delaware Trustee
Dated as of June 3, 1997
--------------------
TRIANGLE CAPITAL TRUST
--------------------
<PAGE> 2
TRIANGLE CAPITAL TRUST
Certain Sections of this Trust Agreement relating, to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Act Trust Agreement Section
Section
- - ------------------- -----------------------
Section 310(a)(1)......................................... 8.7
(a)(2)......................................... 8.7
(a)(3)......................................... 8.9
(a)(4)......................................... 2.7(a)(ii)
(b)............................................ 8.8, 10.10(b)
Section 311(a)............................................ 8.13, 10.10(b)
(b)............................................ 8.13, 10.10(b)
Section 312(a)............................................ 10.10(b)
(b)............................................ 10.10(b), (f)
(c)............................................ 5.7
Section 313(a)............................................ 8.15(a)
(a)(4)......................................... 10.10(c)
(b)............................................ 8.15(c), 10.10(c)
(c)............................................ 10.8, 10.10(c)
(d)............................................ 10.10(c)
Section 314(a)............................................ 8.16, 10.10(d)
(b)............................................ Not Applicable
(c)(1)......................................... 8.17, 10.10(d), (e)
(c)(2)......................................... 8.17, 10.10(d), (e)
(c)(3)......................................... 8.17, 10.10(d), (e)
(e)............................................ 8.17, 10.10(e)
Section 315(a)............................................ 8.1(d)
(b)............................................ 8.2
(c)............................................ 8.1(c)
(d)............................................ 8.1(d)
(e)............................................ Not Applicable
Section 316(a)............................................ Not Applicable
(a)(1)(A)...................................... Not Applicable
(a)(1)(B)...................................... Not Applicable
(a)(2)......................................... Not Applicable
(b)............................................ 5.13
(c)............................................ 6.7
Section 317(a)(1)......................................... Not Applicable
(a)(2)......................................... 8.14
(b)............................................ 5.10
Section 318(a)............................................ 10.10(a)
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Trust Agreement.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I DEFINED TERMS..........................................................................................1
Section 1.1 Definitions..................................................................................1
ARTICLE II CONTINUATION OF THE ISSUER TRUST.....................................................................15
Section 2.1 Name........................................................................................15
Section 2.2 Office of the Delaware Trustee; Principal Place of Business.................................16
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses.............................16
Section 2.4 Issuance of the Capital Securities..........................................................16
Section 2.5 Issuance of the Common Securities; Subscription and Purchase of Junior Subordinated
Debentures..............................................................................................16
Section 2.6 Declaration of Trust........................................................................17
Section 2.7 Authorization to Enter into Certain Transactions............................................17
Section 2.8 Assets of Trust.............................................................................21
Section 2.9 Title to Trust Property.....................................................................21
ARTICLE III PAYMENT ACCOUNT.....................................................................................21
Section 3.1 Payment Account.............................................................................21
ARTICLE IV DISTRIBUTIONS; REDEMPTION............................................................................22
Section 4.1 Distributions...............................................................................22
Section 4.2 Redemption..................................................................................23
Section 4.3 Subordination of Common Securities..........................................................26
Section 4.4 Payment Procedures..........................................................................26
Section 4.5 Tax Returns and Reports.....................................................................27
Section 4.6 Payment of Taxes, Duties, Etc. of the Issuer Trust..........................................27
Section 4.7 Payments under Indenture or Pursuant to Direct Actions......................................27
Section 4.8 Liability of the Holder of Common Securities................................................28
ARTICLE V TRUST SECURITIES CERTIFICATES.........................................................................28
Section 5.1 Initial Ownership...........................................................................28
Section 5.2 The Trust Securities Certificates...........................................................28
Section 5.11 Execution and Delivery of Trust Securities Certificates....................................29
Section 5.12 Global Capital Security....................................................................29
Section 5.13 Registration of Transfer and Exchange Generally; Certain Transfers and Exchanges; Capital
Securities Certificates; Securities Act Legends.........................................................31
Section 5.14 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.........................34
Section 5.15 Persons Deemed Holders.....................................................................35
Section 5.16 Access to List of Holders' Names and Addresses.............................................35
Section 5.17 Maintenance of Office or Agency............................................................35
Section 5.18 Appointment of Paying Agent................................................................35
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
Section 5.19 Ownership of Common Securities by Depositor................................................36
Section 5.20 Notices to Clearing Agency.................................................................36
Section 5.21 Rights of Holders..........................................................................36
ARTICLE VI ACTS OF HOLDERS; MEETINGS; VOTING....................................................................39
Section 6.1 Limitations on Holder's Voting Rights.......................................................39
Section 6.2 Notice of Meetings..........................................................................40
Section 6.3 Meetings of Holders.........................................................................40
Section 6.4 Voting Rights...............................................................................41
Section 6.5 Proxies, etc................................................................................41
Section 6.6 Holder Action by Written Consent............................................................41
Section 6.7 Record Date for Voting and Other Purposes...................................................41
Section 6.8 Acts of Holders.............................................................................42
Section 6.9 Inspection of Records.......................................................................43
ARTICLE VII REPRESENTATIONS AND WARRANTIES......................................................................43
Section 7.1 Representations and Warranties of the Property Trustee and the Delaware Trustee.............43
Section 7.2 Representations and Warranties of Depositor.................................................44
ARTICLE VIII THE ISSUER TRUSTEES; THE ADMINISTRATORS............................................................45
Section 8.1 Certain Duties and Responsibilities.........................................................45
Section 8.2 Certain Notices.............................................................................48
Section 8.3 Certain Rights of Property Trustee..........................................................48
Section 8.4 Not Responsible for Recitals or Issuance of Securities......................................50
Section 8.5 May Hold Securities.........................................................................50
Section 8.6 Compensation; Indemnity; Fees...............................................................50
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees and Administrators.............51
Section 8.8 Conflicting Interests.......................................................................52
Section 8.9 Co-Trustees and Separate Trustee............................................................52
Section 8.10 Resignation and Removal; Appointment of Successor..........................................54
Section 8.11 Acceptance of Appointment by Successor.....................................................55
Section 8.12 Merger, Conversion, Consolidation or Succession to Business................................56
Section 8.13 Preferential Collection of Claims Against Depositor or Issuer Trust........................56
Section 8.14 Trustee May File Proofs of Claim...........................................................56
Section 8.15 Reports by Property Trustee................................................................57
Section 8.16 Reports to the Property Trustee............................................................57
Section 8.17 Evidence of Compliance with Conditions Precedent...........................................58
Section 8.18 Number of Issuer Trustees..................................................................58
Section 8.19 Delegation of Power........................................................................58
Section 8.20 Appointment of Administrators..............................................................58
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE IX DISSOLUTION, LIQUIDATION AND MERGER..................................................................59
Section 9.1 Termination Upon Expiration Date............................................................59
Section 9.2 Early Termination...........................................................................59
Section 9.3 Termination.................................................................................60
Section 9.4 Liquidation.................................................................................60
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of the Issuer Trust..................62
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................63
Section 10.1 Limitation of Rights of Holders............................................................63
Section 10.2 Amendment..................................................................................63
Section 10.3 Separability...............................................................................65
Section 10.4 Governing Law..............................................................................65
Section 10.5 Payments Due on Non-Business Day...........................................................66
Section 10.6 Successors.................................................................................66
Section 10.7 Headings...................................................................................66
Section 10.8 Reports, Notices and Demands...............................................................66
Section 10.9 Agreement Not to Petition..................................................................67
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act....................................67
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and Indenture..........................69
</TABLE>
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depositary Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Capital Securities Certificate
Exhibit E Form of Restricted Securities Certificate
<PAGE> 6
AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of June 3,
1997, is by and among (i) Triangle Bancorp, Inc., a North Carolina corporation
(including any successors or assigns, the "Depositor"), (ii) Bankers Trust
Company, a New York banking corporation, as property trustee, (in such capacity,
the "Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), and (iii) Bankers Trust (Delaware), a
Delaware banking corporation, as Delaware trustee (the "Delaware Trustee") (the
Property Trustee and the Delaware Trustee are referred to collectively herein as
the "Issuer Trustees") and (iv) the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and the Delaware Trustee have heretofore
duly declared and established a business trust pursuant to the Delaware Business
Trust Act by entering into a certain Trust Agreement, dated as of May 28, 1997
(the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on May 28, 1997 (the "Certificate of Trust"),
attached as Exhibit A; and
WHEREAS, the Depositor and the Delaware Trustee desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Issuer Trust to the Depositor, (ii) the issuance and sale of the Capital
Securities by the Issuer Trust pursuant to the Purchase Agreement, (iii) the
acquisition by the Issuer Trust from the Depositor of all of the right, title
and interest in the Junior Subordinated Debentures, (iv) the appointment of the
Administrators and (v) the addition of the Property Trustee as a party to this
Trust Agreement.
NOW THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees, intending to be legally
bound, as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
<PAGE> 7
(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) The words "include," "includes" and "including" shall be deemed
to be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the
meanings assigned to them in accordance with United States generally accepted
accounting principles as in effect at the time of computation;
(e) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement;
(f) The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(g) all references to the date the Capital Securities were
originally issued shall refer to the date the 9.375% Capital Securities were
originally issued.
"Act" has the meaning specified in Section 6.8.
"Additional Amounts" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of Additional
Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of
Debentures for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, the Treasury Rate plus (i) 1.85% if such Redemption Date occurs on or
before June 1, 1998 or (ii) 1.25% if such Redemption Date occurs after June 1,
1998.
"Administrators" means each Person appointed in accordance with
Section 8.20 solely in such Person's capacity as Administrator of the Issuer
Trust heretofore formed and continued hereunder and not in such Person's
individual capacity, or any successor Administrator appointed as herein
provided; with the initial Administrators being Debra L. Lee and Alexander M.
Donaldson.
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<PAGE> 8
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Capital Security or beneficial interest therein,
the rules and procedures of the Depositary for such Capital Security, in each
case to the extent applicable to such transaction and as in effect from time to
time.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction
in the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
State bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding-up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated
a bankrupt or insolvent, or the consent by it to the institution of bankruptcy
or insolvency proceedings against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable federal
or State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board of Directors" means the board of directors of the Depositor
or the Executive Committee of the board of directors of the Depositor (or any
other committee of the board of directors of the Depositor performing similar
functions) or a committee designated by the board
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<PAGE> 9
of directors of the Depositor (or any such committee), comprised of two or more
members of the board of directors of the Depositor or officers of the Depositor,
or both.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Depositor to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full force and effect on
the date of such certification, and delivered to the Issuer Trustees.
"Business Day" means a day other than (a) a Saturday or Sunday, (b)
a day on which banking institutions in the City of New York, New York, or the
City of Raleigh, North Carolina are authorized or required by law or executive
order to remain closed or (c) a day on which the Property Trustee's Corporate
Trust Office or the Delaware Trustee's Corporate Trust Office or the Corporate
Trust Office of the Debenture Trustee is closed for business.
"Capital Securities Certificate" means a certificate evidencing
ownership of Capital Securities, substantially in the form attached as Exhibit
D.
"Capital Security" means a preferred undivided beneficial interest
in the assets of the Issuer Trust, having a Liquidation Amount of $1,000 and
having the rights provided therefor in this Trust Agreement, including the right
to receive Distributions and a Liquidation Distribution as provided herein.
"Capital Treatment Event" means, in respect of the Issuer Trust,
the reasonable determination by the Depositor that, as a result of the
occurrence of any amendment to, or change (including any announced prospective
change) in, the laws (or any rules or regulations thereunder) of the United
States or any political subdivision thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement, action or decision is announced on or after the
date of the issuance of the Capital Securities of the Issuer Trust, there is
more than an insubstantial risk that the Depositor will not be entitled to treat
an amount equal to the Liquidation Amount of such Capital Securities as "Tier 1
Capital" (or the then equivalent thereof) for purposes of the risk-based capital
adequacy guidelines of the Board of Governors of the Federal Reserve System, as
then in effect and applicable to the Depositor.
"Cede" means Cede & Co.
"Certificate Depositary Agreement" means the agreement among the
Issuer Trust, the Depositor and the Depositary, as the initial Clearing Agency,
dated as of the Closing Date, substantially in the form attached as Exhibit B,
as the same may be amended and supplemented from time to time.
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<PAGE> 10
"Certificate of Trust" has the meaning specified in the preamble to
this Trust Agreement.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depositary shall be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Time, which date is also the date
of execution and delivery of this Trust Agreement.
"Closing Time" has the meaning in the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, as amended, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial interest in the
assets of the Issuer Trust, having a Liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Comparable Treasury Issue" means with respect to any Redemption
Date the United States Treasury security selected by the Quotation Agent as
having a maturity comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security has a maturity which is
within a period from three months before to three months after June 1, 2007, the
two most closely corresponding United States Treasury securities shall be used
as the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
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<PAGE> 11
"Comparable Treasury Price" means (A) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest of such Reference Treasury Dealer Quotations, or (B) if the Debenture
Trustee obtains fewer than five such Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations.
"Corporate Trust Office" means the principal office of the Property
Trustee located in the City of New York which at the time of the execution of
this Trust Agreement is located at Four Albany Street, New York, New York 10006;
Attention: Corporate Trust and Agency Group - Corporate Market Services.
"Debenture Event of Default" means an "Event of Default" as defined
in the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures
to be redeemed under the Indenture, the date fixed for redemption of such
Debentures under the Indenture.
"Debenture Trustee" means Bankers Trust Company, a New York banking
corporation and any successor.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. ' 3801, et seq., as it may be amended from time to
time.
"Delaware Trustee" means the corporation identified as the
"Delaware Trustee" in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Issuer Trust continued hereunder and not in
its individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositary" means The Depository Trust Company or any successor
thereto.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation
6
<PAGE> 12
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 Issuer Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a period
of 30 days; or
(c) default by the Issuer 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 Issuer Trustees in this Trust Agreement
(other than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clause (b) or (c) above) and continuation of
such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Issuer Trustees and the Depositor by the
Holders of at least 25% in aggregate Liquidation Amount of the Outstanding
Capital Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) the occurrence of any Bankruptcy Event with respect to the
Property Trustee or all or substantially all of its property if a successor
Property Trustee has not been appointed within a period of 90 days thereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor statute thereto, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Global Capital Securities Certificate" means a Capital Securities
Certificate evidencing ownership of Global Capital Securities.
"Global Capital Security" means a Capital Security, the ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 5.4.
"Guarantee" means the Guarantee Agreement executed and delivered by
the Depositor and Bankers 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.
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<PAGE> 13
"Holder" means a Person in whose name a Trust Security or Trust
Securities is registered in the Securities Register; any such Person shall be
deemed to be a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Indenture" means the Junior Subordinated Indenture, dated as of
June 3, 1997, between the Depositor and the Debenture Trustee (as amended or
supplemented from time to time) relating to the issuance of the Junior
Subordinated Debentures.
"Initial Purchaser" has the meaning specified in the Purchase
Agreement.
"Institutional Accredited Investor" means an institutional
accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended.
"Investment Company Event" means the receipt by the Issuer Trust of
an Opinion of Counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or a written change
(including any announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the Issuer
Trust is or will be considered an "investment company" that is required to be
registered under the Investment Company Act, which change or prospective change
becomes effective or would become effective, as the case may be, on or after the
date of the issuance of the Capital Securities.
"Issuer Trust" means Triangle Capital Trust.
"Issuer Trustees" means, collectively, the Property Trustee and the
Delaware Trustee.
"Junior Subordinated Debentures" means the aggregate principal
amount of the Depositor's 9.375% Junior Subordinated Deferrable Interest
Debentures, due June 1, 2027, issued pursuant to the Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed
of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
Junior Subordinated Debentures to Holders of Trust Securities in connection with
a dissolution or liquidation of the
8
<PAGE> 14
Issuer Trust, Junior Subordinated Debentures having a principal amount equal to
the Liquidation Amount of the Trust Securities of the Holder to whom such Junior
Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust
Security.
"Liquidation Date" means the date on which Junior Subordinated
Debentures are to be distributed to Holders of Trust Securities in connection
with a dissolution and liquidation of the Issuer Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified in
Section 9.4(d).
"Majority in Liquidation Amount of the Capital Securities" or
"Majority in Liquidation Amount of the Common Securities" means, except as
provided by the Trust Indenture Act, Capital Securities or Common Securities, as
the case may be, representing more than 50% of the aggregate Liquidation Amount
of all then Outstanding Capital Securities or Common Securities, as the case may
be.
"Officers' Certificate" means a certificate signed by the Chief
Executive Officer, President or an Executive Vice President, a Senior Vice
President or Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Depositor, and delivered to the
party provided herein. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Agreement
shall include:
(a) a statement by each officer signing the Officers' Certificate
that such officer has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Depositor or any Affiliate of the Depositor.
"Original Trust Agreement" has the meaning specified in the
preamble to this Trust Agreement.
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<PAGE> 15
"Other Capital Securities" means the Capital Securities sold by the
Initial Purchaser in the initial offering contemplated by the Purchase Agreement
to Institutional Accredited Investors in reliance on an exemption from the
registration requirement of the Securities Act other than Rule 144A.
"Outstanding," with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed and delivered
under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property Trustee
or delivered to the Property Trustee for cancellation;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Capital Securities, provided that if such
Trust Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid, or in exchange for, or
in lieu of which, other Trust Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.6 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Issuer Trustee, any Administrator or any
Affiliate of the Depositor, shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Issuer Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Capital Securities that such Issuer Trustee or
such Administrator, as the case may be, knows to be so owned shall be so
disregarded and (b) the foregoing shall not apply at any time when all of the
Outstanding Capital Securities are owned by the Depositor, one or more of the
Issuer Trustees, one or more of the Administrators and/or any such Affiliate.
Capital Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrators the pledgee's right so to act with respect to such Capital
Securities and that the pledgee is not the Depositor or any Affiliate of the
Depositor.
"Owner" means each Person who is the beneficial owner of Global
Capital Securities as reflected in the records of the Clearing Agency or, if a
Clearing Agency Participant is not the Owner, then as reflected in the records
of a Person maintaining an account with such Clearing Agency (directly or
indirectly), in accordance with the rules of such Clearing Agency.
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<PAGE> 16
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.10 and shall initially be the Property Trustee.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained with the Property Trustee in its trust department for
the benefit of the Holders in which all amounts paid in respect of the Junior
Subordinated Debentures will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Holders in accordance with
Sections 4.1 and 4.2.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, company, limited liability company, trust, unincorporated organization
or government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Property Trustee of the Issuer Trust formed and continued hereunder and not in
its individual capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement, dated as of May
29, 1997, among the Issuer Trust, the Depositor and the Initial Purchaser, as
the same may be amended from time to time.
"Quotation Agent" means Wheat, First Securities, Inc. and its
successors; provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Depositor shall substitute therefor another Primary Treasury
Dealer.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Junior Subordinated Debenture Redemption Date and
the stated maturity of the Junior Subordinated Debentures shall be a Redemption
Date for a Like Amount of Trust Securities, including but not limited to any
date of redemption pursuant to the occurrence of any Special Event.
"Redemption Price" means:
(a) in the case of a redemption, other than as provided in
paragraph (b) below, the following prices expressed in percentages of the
Liquidation Amount, together with accumulated Distributions to but excluding the
date fixed for redemption, if redeemed during the 12-month period beginning June
1:
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<PAGE> 17
Year Redemption Price
---- ----------------
2007..................................................... 104.69%
2008..................................................... 104.22%
2009..................................................... 103.75%
2010..................................................... 103.28%
2011..................................................... 102.81%
2012..................................................... 102.34%
2013..................................................... 101.88%
2014..................................................... 101.41%
2015..................................................... 100.94%
2016..................................................... 100.47%
and 100% on or after June 1, 2017.
(b) in the case of a redemption prior to June 1, 2007 following a
Tax Event, Investment Company Event or Capital Treatment Event, an amount equal
to for each Capital Security the Make-Whole Amount for a corresponding $1,000
principal amount of Junior Subordinated Debentures together with accumulated
Distributions to but excluding the date fixed for redemption. The "Make-Whole
Amount" will be equal to the greater of (i) 100% of the principal amount of such
Junior Subordinated Debentures, and (ii) as determined by a Quotation Agent, the
sum of the present values of the principal amount and premium payable as part of
the Redemption Price with respect to an optional redemption of such Junior
Subordinated Debentures on June 1, 2007, together with the present values of
scheduled payments of interest (not including the portion of any such payments
of interest accrued as of the Redemption Date) from the Redemption Date to June
1, 2007 (the "Remaining Life"), in each case discounted to the Redemption Date
on a semi-annual basis (assuming a 360-day year consisting of 30-day months) at
the Adjusted Treasury Rate. The Redemption Price in the case of a redemption on
or after June 1, 2007 following a Tax Event, Investment Company Event or Capital
Treatment Event shall equal the Redemption Price then applicable to a redemption
under paragraph (a) above.
"Reference Treasury Dealer" means (i) the Quotation Agent and
(ii) any other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Depositor.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Debenture Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Debenture Trustee by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.
"Regulation D" means Regulation D under the Securities Act (or
any successor provision), as it may be amended from time to time.
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<PAGE> 18
"Relevant Trustee" has the meaning specified in Section 8.10.
"Responsible Officer" when used with respect to the Property
Trustee means any officer assigned to the Corporate Trust Office, including any
managing director, vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
the Indenture, and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Restricted Capital Securities" means all Capital Securities, the
Capital Securities Certificate for which is required pursuant to Section 5.5(c)
to bear a Restricted Capital Securities Legend. Such term includes the Global
Capital Securities Certificate.
"Restricted Capital Securities Legend" means a legend substantially
in the form of the legend required in the form of a Capital Securities
Certificate set forth in Exhibit D to be placed upon a Restricted Capital
Security.
"Restricted Securities Certificate" means a certificate
substantially in the form set forth in Exhibit E.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Rule 144A Capital Securities" means the Capital Securities
purchased by the Initial Purchaser from the Issuer Trust pursuant to the
Purchase Agreement, other than the Other Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended, and
any successor statute thereto, in each case as amended from time to time.
"Senior Indebtedness" has the meaning specified in the Indenture.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.5.
"Special Event" means any Tax Event, Capital Treatment Event or
Investment Company Event.
"Successor Capital Securities Certificate" of any particular
Capital Securities Certificate means every Capital Securities Certificate issued
after, and evidencing all or a portion
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<PAGE> 19
of the same beneficial interest in the Issuer Trust as that evidenced by, such
particular Capital Securities Certificate; and, for the purposes of this
definition, any Capital Securities Certificate executed and delivered under
Section 5.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen
Capital Securities Certificate shall be deemed to evidence the same beneficial
interest in the Issuer Trust as the mutilated, destroyed, lost or stolen Capital
Securities Certificate.
"Successor Capital Security" has the meaning specified in
Section 9.5.
"Tax Event" means the receipt by the Issuer Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement, action or decision is announced on or after
the date of issuance of the Capital Securities, there is more than an
insubstantial risk that (i) the Issuer Trust is, or will be within 90 days of
the delivery of such Opinion of Counsel, subject to United States Federal income
tax with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Depositor on the Junior Subordinated
Debentures is not, or within 90 days of the delivery of such Opinion of Counsel
will not be, deductible by the Depositor, in whole or in part, for United States
federal income tax purposes, or (iii) the Issuer Trust is, or will be within 90
days of the delivery of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the week immediately prior to the calculation date,
appearing in the most recently published statistical release designated "H.15
(519)" or any successor publication which is published weekly by the Board of
Governors of the Federal Reserve System and which establishes yields on actively
traded United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding to the
Remaining Life (if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Redemption Date. The
Treasury Rate shall be calculated on the third Business Day preceding the
Redemption Date.
"Trust Agreement" means this Amended and Restated Trust Agreement,
as the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof,
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including (i) all exhibits hereto, and (ii) for all purposes of this Amended and
Restated Trust Agreement any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Amended and Restated Trust Agreement and any modification, amendment or
supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 or any
successor statute, in each case as amended from time to time.
"Trust Property" means (a) the Junior Subordinated Debentures, (b)
any cash on deposit in, or owing to, the Payment Account, (c) all proceeds and
rights in respect of the foregoing and (d) any other property and assets for the
time being held or deemed to be held by the Property Trustee pursuant to the
trusts of this Trust Agreement.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the
Capital Securities.
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1 NAME.
The Issuer Trust continued hereby shall be known as "Triangle
Capital Trust", as such name may be modified from time to time by the
Administrators following written notice to the Holders of Trust Securities and
the Issuer Trustees, in which name the Administrators and the Issuer Trustees
may engage in the transactions contemplated hereby, make and execute contracts
and other instruments on behalf of the Issuer Trust and sue and be sued.
SECTION 2.2 OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS.
The address of the Delaware Trustee in the State of Delaware is
Bankers Trust (Delaware), 1001 Jefferson Street, Suite 550, Wilmington, Delaware
19801, Attention: Lisa Wilkins, or such other address in the State of Delaware
as the Delaware Trustee may designate by written notice to the Holders and the
Depositor. The principal executive office of the Issuer Trust is in care of
Triangle Bancorp, Inc., 4300 Glenwood Avenue, Raleigh, North Carolina 27612,
Attention: Alexander M. Donaldson, Esq.
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SECTION 2.3 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES.
The Property Trustee acknowledges receipt in trust from the
Depositor in connection with this Trust Agreement of the sum of $10, which
constitutes the initial Trust Property. The Depositor shall pay all
organizational expenses of the Issuer Trust as they arise or shall, upon request
of any Issuer Trustee, promptly reimburse such Issuer Trustee for any such
expenses paid by such Issuer Trustee. The Depositor shall make no claim upon the
Trust Property for the payment of such expenses.
SECTION 2.4 ISSUANCE OF THE CAPITAL SECURITIES.
The Depositor and the Issuer Trust executed and delivered the
Purchase Agreement as of May 29, 1997 pursuant to the Original Trust Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement, an
Administrator, on behalf of the Issuer Trust, shall manually execute in
accordance with Section 5.3 and the Property Trustee shall authenticate in
accordance with Section 5.3 and deliver to the Initial Purchaser, Capital
Securities Certificates, registered in the names requested by the Initial
Purchaser, in an aggregate amount of 20,000 Capital Securities having an
aggregate Liquidation Amount of $20,000,000, against receipt of the aggregate
purchase price of such Capital Securities of $19,949,800, by the Property
Trustee.
SECTION 2.5 ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND
PURCHASE OF JUNIOR SUBORDINATED DEBENTURES.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrator, on behalf of the Issuer Trust, shall execute or
cause to be executed in accordance with Section 5.2 and the Property Trustee
shall deliver to the Depositor Common Securities Certificates, registered in the
name of the Depositor, in an aggregate amount of 619 Common Securities having an
aggregate Liquidation Amount of $619,000 against receipt of the aggregate
purchase price of such Common Securities of $617,446.31 by the Property Trustee.
Contemporaneously therewith, an Administrator, on behalf of the Issuer Trust,
shall subscribe for and purchase from the Depositor the Junior Subordinated
Debentures, registered in the name of the Issuer Trust and having an aggregate
principal amount equal to $20,619,000, and, in satisfaction of the purchase
price for such Junior Subordinated Debentures, the Property Trustee, on behalf
of the Issuer Trust, shall deliver to the Depositor the sum of $20,567,246.31
(being the sum of the amounts delivered to the Property Trustee pursuant to (i)
the second sentence of Section 2.4, and (ii) the first and second sentences of
this Section 2.5) and receive on behalf of the Issuer Trust the Junior
Subordinated Debentures.
SECTION 2.6 DECLARATION OF TRUST.
The exclusive purposes and functions of the Issuer Trust are to (a)
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Junior Subordinated Debentures, and (b) engage in only those other
activities necessary, convenient or incidental thereto. The Depositor hereby
appoints the Issuer Trustees as trustees of the Issuer Trust, to have all the
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rights, powers and duties to the extent set forth herein, and the Issuer
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Issuer Trust and the Holders. The
Depositor hereby appoints the Administrators, with such Administrators having
all rights, powers and duties set forth herein with respect to accomplishing the
purposes of the Issuer Trust, and the Administrators hereby accept such
appointment; provided, however, that it is the intent of the parties hereto that
such Administrators shall not be trustees or, to the fullest extent permitted by
law, fiduciaries with respect to the Issuer Trust and this Agreement shall be
construed in a manner consistent with such intent. The Property Trustee shall
have the right and power to perform those duties assigned to the Administrators.
The Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities, of the Property
Trustee or the Administrators set forth herein. The Delaware Trustee shall be
one of the trustees of the Issuer Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware Business Trust Act
and for taking such actions as are required to be taken by a Delaware trustee
under the Delaware Business Trust Act.
SECTION 2.7 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Issuer Trustees and the Administrators shall conduct the
affairs of the Issuer Trust in accordance with the terms of this Trust
Agreement. Subject to the limitations set forth in paragraph (b) of this Section
and in accordance with the following provisions (i), (ii) and (iii), the Issuer
Trustees and the Administrators shall act as follows:
(i) Each Administrator shall:
(A) comply with the Purchase Agreement regarding the
issuance and sale of the Trust Securities;
(B) assist in compliance with the Securities Act,
applicable state securities or blue sky laws, and the Trust
Indenture Act;
(C) assist in the listing of the Capital Securities
upon such securities exchange or exchanges as shall be
determined by the Depositor, with the registration of the
Capital Securities under the Exchange Act, if required, and
the preparation and filing of all periodic and other reports
and other documents pursuant to the foregoing;
(D) execute the Trust Securities on behalf of the
Issuer Trust in accordance with this Trust Agreement;
(E) execute and deliver an application for a taxpayer
identification number for the Issuer Trust;
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(F) unless otherwise determined by the Property
Trustee or Holders of at least a Majority in Liquidation
Amount of the Capital Securities or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act,
execute on behalf of the Issuer Trust any documents that the
Administrators have the power to execute pursuant to this
Trust Agreement, including without limitation, a Junior
Subordinated Debentures Purchase Agreement and a Common
Securities Purchase Agreement, both by and between the Issuer
Trust and the Depositor; and
(G) take any action incidental to the foregoing as
necessary or advisable to give effect to the terms of this
Trust Agreement.
(ii) The Property Trustee shall have the power and authority
to act on behalf of the Issuer Trust with respect to the following
matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Junior Subordinated
Debentures;
(C) the receipt and 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 Holders
in respect of the Trust Securities;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Junior Subordinated Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Junior
Subordinated Debentures to the Holders 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 Issuer
Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State of the
State of Delaware; and
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(I) after an Event of Default (other than under
paragraph (b), (c), (d), or (f) of the definition of such term
if such Event of Default is by or with respect to the Property
Trustee), comply with the provisions of this Trust Agreement
and take any action to give effect to the terms of this Trust
Agreement and protect and conserve the Trust Property for the
benefit of the Holders (without consideration of the effect of
any such action on any particular Holder);
provided, however, that nothing in this Section 2.7(a)(ii) shall
require the Property Trustee to take any action that is not otherwise
required in this Trust Agreement.
(iii) The Property Trustee shall comply with the listing
requirements of the Capital Securities upon such securities exchange or
exchanges as shall be determined by the Depositor, the registration of
the Capital Securities under the Exchange Act, if required, and the
preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing.
(b) So long as this Trust Agreement remains in effect, the Issuer Trust
(or the Issuer Trustees or Administrators acting on behalf of the Issuer Trust)
shall not undertake any business, activities or transaction except as expressly
provided herein or contemplated hereby. In particular, neither the Issuer
Trustees nor the Administrators shall (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 Holders, except as expressly
provided herein, (iii) take any action that would reasonably be expected to
cause the Issuer Trust to become taxable as a corporation for United States
Federal income tax purposes, (iv) incur any indebtedness for borrowed money or
issue any other debt, or (v) take or consent to any action that would result in
the placement of a Lien on any of the Trust Property. The Property Trustee shall
defend all claims and demands of all Persons at any time claiming any Lien on
any of the Trust Property adverse to the interest of the Issuer Trust or the
Holders in their capacity as Holders.
(b) In connection with the issue and sale of the Capital Securities,
the Depositor shall have the right and responsibility to assist the Issuer Trust
with respect to, or effect on behalf of the Issuer Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation by the Issuer Trust of an offering
memorandum in relation to the Capital Securities, including any
amendments thereto and the taking of any action necessary or desirable
to sell the Capital Securities in a transaction or a series of
transactions exempt from the registration requirements of the
Securities Act;
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(ii) the determination of the states in which to take
appropriate action to qualify or register for sale all or part of the
Capital Securities and the determination of any and all such acts,
other than actions that must be taken by or on behalf of the Issuer
Trust, and the advice to the Issuer Trustees of actions they must take
on behalf of the Issuer Trust, and the preparation for execution and
filing of any documents to be executed and filed by the Issuer Trust or
on behalf of the Issuer Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such
States in connection with the sale of the Capital Securities;
(iii) the negotiation of the terms of, and the execution and
delivery of, the Purchase Agreement providing for the sale of the
Capital Securities; and
(iv) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(c) Notwithstanding anything herein to the contrary, the Administrators
and the Property Trustee are authorized and directed to conduct the affairs of
the Issuer Trust and to operate the Issuer Trust so that the Issuer Trust will
not be deemed to be an "investment company" required to be registered under the
Investment Company Act, and will not be taxable as a corporation for the United
States Federal income tax purposes and so that the Junior Subordinated
Debentures will be treated as indebtedness of the Depositor for United States
income tax purposes. In this connection, the Property Trustee and the Holders of
Common Securities are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that the
Property Trustee and Holders of Common Securities determine in their discretion
to be necessary or desirable for such purposes, as long as such action does not
adversely affect in any material respect the interests of the holders of the
Outstanding Capital Securities. In no event shall the Administrators or the
Issuer Trustees be liable to the Issuer Trust or the Holders for any failure to
comply with this section that results from a change in law or regulations or in
the interpretation thereof.
SECTION 2.8 ASSETS OF TRUST.
The assets of the Issuer Trust shall consist solely of the Trust
Property.
SECTION 2.9 TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in
the Property Trustee (in its capacity as such) and shall be held and
administered by the Property Trustee for the benefit of the Issuer Trust and the
Holders in accordance with this Trust Agreement.
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ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and its agents shall have
exclusive control and sole right of withdrawal with respect to the Payment
Account for the purpose of making deposits in and withdrawals from the Payment
Account in accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account shall be held by the
Property Trustee in the Payment Account for the exclusive benefit of the Holders
and for distribution as herein provided, including (and subject to) any priority
of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Junior Subordinated Debentures.
Amounts held in the Payment Account shall not be invested by the Property
Trustee pending distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 DISTRIBUTIONS.
(a) The Trust Securities represent undivided beneficial interests
in the Trust Property, and Distributions (including of Additional Amounts) will
be made on the Trust Securities at the rate and on the dates that payments of
interest (including of Additional Interest, as defined in the Indenture) are
made on the Junior Subordinated Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be
cumulative and will accumulate whether or not there are funds of
the Issuer Trust available for the payment of Distributions.
Distributions shall accumulate from June 3, 1997, and, except in
the event (and to the extent) that the Depositor exercises its
right to defer the payment of interest on the Debentures pursuant
to the Indenture, shall be payable semi-annually in arrears on June
1 and December 1 of each year, commencing on December 1, 1997. If
any date on which a Distribution is otherwise payable on the Trust
Securities is not a Business Day, then the payment of such
Distribution shall be made on the next succeeding day that is a
Business Day (without any additional Distributions or other payment
in respect of any such delay), with the same force and effect as if
made on the
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date on which such payment was originally payable (each
date on which distributions are payable in accordance with this
Section 4.1(a), a "Distribution Date").
(ii) The Trust Securities shall be entitled to
Distributions payable at a rate of 9.375% per annum of the
Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any period less than a full Distribution
period shall be computed on the basis of a 360-day year of twelve
30-day months and the actual number of days elapsed in a partial
month in a period. Distributions payable for each full Distribution
period will be computed by dividing the rate per annum by two. The
amount of Distributions payable for any period shall include any
Additional Amounts in respect of such period.
(iii) So long as no Debenture Event of Default has
occurred and is continuing, the Depositor has the right under the
Indenture to defer the payment of interest on the Junior
Subordinated Debentures at any time and from time to time for a
period not exceeding 10 consecutive semi-annual periods (an
"Extension Period"), provided that no Extension Period may extend
beyond June 1, 2027. As a consequence of any such deferral,
semi-annual Distributions on the Trust Securities by the Trust will
also be deferred (and the amount of Distributions to which Holders
of the Trust Securities are entitled will accumulate additional
Distributions thereon at a rate of 9.375% per annum, compounded
semi-annually) from the relevant payment date for such
Distributions, computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in
such period. Additional Distributions payable for each full
Distribution period will be computed by dividing the rate per annum
by two. The term "Distributions" as used in Section 4.1 shall
include any such additional Distributions provided pursuant to this
Section 4.1(a)(iii).
(iv) Distributions on the Trust Securities shall be made
by the Property Trustee from the Payment Account and shall be
payable on each Distribution Date only to the extent that the
Issuer Trust has funds then on hand and available in the Payment
Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on May 15 or
November 15 (whether or not a Business Day).
SECTION 4.2 REDEMPTION.
(a) On each Junior Subordinated Debenture Redemption Date and on
the stated maturity of the Junior Subordinated Debentures, the Issuer Trust will
be required to redeem a Like Amount of Trust Securities at the Redemption Price.
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(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price, or if the Redemption Price
cannot be calculated prior to the time the notice is required to be
sent, the estimate of the Redemption Price provided pursuant to the
Indenture together with a statement that it is an estimate and that
the actual Redemption Price will be calculated on the third
Business Day prior to the Redemption Date (and if an estimate is
provided, a further notice shall be sent of the actual Redemption
Price on the date, or as soon as practicable thereafter, that
notice of such actual Redemption Price is received pursuant to the
Indenture);
(iii) the CUSIP number or CUSIP numbers of the Capital
Securities affected;
(iv) if less than all the Outstanding Trust Securities are
to be redeemed, the identification and the total Liquidation Amount
of the particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be redeemed
and that Distributions thereon will cease to accumulate on and
after said date, except as provided in Section 4.2(d) below; and
(vi) the place or places where Trust Securities are to be
surrendered for the payment of the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use "CUSIP" or
"private placement" numbers (if then generally in use), and, if so, the Property
Trustee shall indicate the "CUSIP" or "private placement" numbers of the Trust
Securities in notices of redemption and related materials as a convenience to
Holders; provided, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Trust Securities
or as contained in any notice of redemption and related material.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption of Junior Subordinated Debentures. Redemptions of the
Trust Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Issuer
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Trust has funds then on hand and available in the Payment Account for the
payment of such Redemption Price.
(d) If the Issuer Trust gives a notice of redemption in respect of
any Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, with
respect to Capital Securities held in global form, irrevocably deposit with the
Clearing Agency for such Capital Securities, to the extent available therefor,
funds sufficient to pay the applicable Redemption Price and will give such
Clearing Agency irrevocable instructions and authority to pay the Redemption
Price to the Holders of the Capital Securities. With respect to Capital
Securities that are not held in global form, the Property Trustee, subject to
Section 4.2(c), will irrevocably deposit with the Paying Agent, to the extent
available therefor, funds sufficient to pay the applicable Redemption Price and
will give the Paying Agent irrevocable instructions and authority to pay the
Redemption Price to the Holder of the Capital Securities upon surrender of their
Capital Securities Certificates. Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Register for the Trust Securities on the relevant record dates for
the related Distribution Dates. If notice of redemption shall have been given
and funds deposited as required, then, upon the date of such deposit, all rights
of Holders holding Trust Securities so called for redemption will cease, except
the right of such Holders to receive the Redemption Price and any Distribution
payable in respect of the Trust Securities on or prior to the Redemption Date,
but without interest, and such Securities will cease to be Outstanding. In the
event that any date on which any applicable Redemption Price is payable is not a
Business Day, then payment of the applicable Redemption Price payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day 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 Issuer Trust or by the Depositor
pursuant to the Guarantee, Distributions on such Trust Securities will continue
to accumulate, as set forth in Section 4.1, from the Redemption Date originally
established by the Issuer Trust for such Trust Securities to the date such
applicable Redemption Price is actually paid, in which case the actual payment
date will be the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
(e) Subject to Section 4.3(a), if less than all the Outstanding
Trust Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Trust Securities to be redeemed shall be allocated
pro rata to the Common Securities and the Capital Securities based on the
relative Liquidation Amounts of such classes, subject to the requirement that no
Holder shall hold Capital Securities with an aggregate Liquidation Amount of
less than $100,000 after such redemption. The particular Capital Securities to
be redeemed shall be selected on a pro rata basis based on their respective
Liquidation Amounts not more than 60 days
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prior to the Redemption Date by the Property Trustee from the Outstanding
Capital Securities not previously called for redemption, or if the Capital
Securities are then held in the form of a Global Capital Security in accordance
with the customary procedures for the Clearing Agency, provided that, after
giving effect to such redemption, no Holder shall hold Capital Securities with
an aggregate Liquidation Amount of less than $100,000, provided, however, that
with respect to Holders that would be required to hold less than 100 but more
than zero Capital Securities as a redeem each such Holder to either 100 Capital
Securities or zero Capital Securities and shall use such method (including,
without limitation, by lot) as the Property Trustee shall deem fair and
appropriate. 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 aggregate Liquidation Amount of
Capital Securities that has been or is to be redeemed.
SECTION 4.3 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, the Redemption Price of, and the Liquidation Distribution in
respect of, the Trust Securities, as applicable, shall be made, subject to
Section 4.2(e), pro rata among the Common Securities and the Capital Securities
based on the Liquidation Amount of such Trust Securities; provided, however,
that if on any Distribution Date or Redemption Date any Event of Default
resulting from a Debenture Event of Default in Section 5.1(1) or 5.1(2) of the
Indenture shall have occurred and be continuing, no payment of any Distribution
(including any Additional Amounts) on, Redemption Price of, or Liquidation
Distribution in respect of, any Common Security, and no other payment on account
of the redemption, liquidation or other acquisition of Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions (including any Additional Amounts) on all Outstanding Capital
Securities for all Distribution periods terminating on or prior thereto, or, in
the case of payment of the Redemption Price, the full amount of such Redemption
Price on all Outstanding Capital Securities then called for redemption, or in
the case of payment of the Liquidation Distribution the full amount of such
Liquidation Distribution on all Outstanding Capital Securities, shall have been
made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including any Additional Amounts) on, or the Redemption Price of,
Capital Securities then due and payable. The existence of an Event of Default
does not entitle the Holders of Capital Securities to accelerate the maturity
thereof.
(f) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holders of the Common Securities shall
be deemed to have waived any right to act with respect to any such Event of
Default under this Trust Agreement until the effects of all such Events of
Default with respect to the Capital Securities have been
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cured, waived or otherwise eliminated. Until all such Events of Default under
this Trust Agreement with respect to the Capital Securities have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the Holders of the Capital Securities and not on behalf of the Holder of the
Common Securities, and only the Holders of the Capital Securities will have the
right to direct the Property Trustee to act on their behalf.
SECTION 4.4 PAYMENT PROCEDURES.
Payments of Distributions (including any Additional Amounts) in
respect of the Capital Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Capital Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which will credit the relevant accounts on the applicable Distribution
Dates. Payments of Distributions to Holders of $1,000,000 or more in aggregate
Liquidation Amount of Capital Securities may be made by wire transfer of
immediately available funds upon written request of such Holder to the
Securities Registrar not later than 15 calendar days prior to the date on which
the Distribution is payable. Payments in respect of the Common Securities shall
be made in such manner as shall be mutually agreed between the Property Trustee
and the Holder of the Common Securities.
SECTION 4.5 TAX RETURNS AND REPORTS.
The Administrators shall prepare (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
Issuer Trust. In this regard, the Administrators shall (a) prepare and file (or
cause to be prepared and filed) all Internal Revenue Service forms required to
be filed in respect of the Issuer Trust in each taxable year of the Issuer Trust
and (b) prepare and furnish (or cause to be prepared and furnished) to each
Holder all Internal Revenue Service forms required to be provided by the Issuer
Trust. The Administrators shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing. The Issuer Trustees shall comply with United States Federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Holders under the Trust Securities.
On or before December 15 of each year during which any Capital
Securities are outstanding, the Administrators shall furnish to the Paying Agent
such information as may be reasonably requested by the Property Trustee in order
that the Property Trustee may prepare the information which it is required to
report for such year on Internal Revenue Service Forms 1096 and 1099 pursuant to
Section 6049 of the Internal Revenue Code of 1986, as amended. Such information
shall include the amount of original issue discount includible in income for
each outstanding Capital Security during such year, if any.
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SECTION 4.6 PAYMENT OF TAXES, DUTIES, ETC. OF THE ISSUER TRUST.
Upon receipt under the Junior Subordinated Debentures of Additional
Sums, the Property Trustee shall promptly pay any taxes, duties or governmental
charges of whatsoever nature (other than withholding taxes) imposed on the
Issuer Trust by the United States or any other taxing authority.
SECTION 4.7 PAYMENTS UNDER INDENTURE OR PURSUANT TO DIRECT ACTIONS.
Any amount payable hereunder to any Holder of Capital Securities
shall be reduced by the amount of any corresponding payment such Holder has
directly received pursuant to Section 5.8 of the Indenture or Section 5.13 of
this Trust Agreement.
SECTION 4.8 LIABILITY OF THE HOLDER OF COMMON SECURITIES.
The Holder of Common Securities shall be liable for the debts and
obligations of the Issuer Trust as set forth in Section 6.7 of the Indenture
regarding allocation of expenses.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1 INITIAL OWNERSHIP.
Upon the formation of the Issuer Trust and the contribution by the
Depositor pursuant to Section 2.3 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 Issuer Trust.
SECTION 5.2 THE TRUST SECURITIES CERTIFICATES.
(a) The Capital Securities Certificates shall be issued in fully
registered form in minimum blocks of at least 100 (representing a minimum of
$100,000 aggregate Liquidation Amount and multiples of $1,000 in excess
thereof), and shall be at all times held in minimum blocks of 100, and the
Common Securities Certificates shall be issued in minimum blocks of 100
(representing a minimum of $100,000 aggregate Liquidation Amount). The Trust
Securities Certificates shall be executed on behalf of the Issuer Trust by
manual or facsimile signature of at least one Administrator except as provided
in Section 5.3. Trust Securities Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Issuer Trust, shall be validly
issued and entitled to the benefits of this Trust Agreement, notwithstanding
that such individuals or any of
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them shall have ceased to be so authorized prior to the delivery of such Trust
Securities Certificates or did not hold such offices at the date of delivery of
such Trust Securities Certificates. A transferee of a Trust Securities
Certificate shall become a Holder, and shall be entitled to the rights and
subject to the obligations of a Holder hereunder, upon due registration of such
Trust Securities Certificate in such transferee's name pursuant to Section 5.5.
(b) Upon their original issuance, Capital Securities Certificates
representing Rule 144A Capital Securities shall be issued in the form of a
Global Capital Securities Certificate registered in the name of Cede as DTC's
nominee and deposited with or on behalf of Depository for credit by Depository
to the respective accounts of the Owners thereof (or such other accounts as they
may direct). Except as set forth herein, record ownership of the Global Capital
Security may be transferred, in whole or in part, only to another nominee of
Depository or to a successor of Depository or its nominee.
(c) Upon their original issuance, Capital Securities Certificates
representing Other Capital Securities shall be issued in definitive form and may
not be represented by the Global Capital Security.
(d) 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 5.3 EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
At the Closing Time, an Administrator shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 2.4 and
2.5, to be executed on behalf of the Issuer Trust and delivered to the Property
Trustee and upon such delivery the Property Trustee shall authenticate such
Trust Securities Certificates and deliver such Trust Securities Certificates
upon the written order of the Trust, executed by an Administrator thereof,
without further corporate action by the Depositor, in authorized denominations.
SECTION 5.4 GLOBAL CAPITAL SECURITY.
(a) The Global Capital Security issued under this Trust Agreement
shall be registered in the name of the nominee of the Clearing Agency and
delivered to such custodian therefor, and such Global Capital Security shall
constitute a single Capital Security for all purposes of this Trust Agreement.
(b) Notwithstanding any other provision in this Trust Agreement,
the Global Capital Security may not be exchanged in whole or in part for Capital
Securities registered, and no transfer of the Global Capital Security in whole
or in part may be registered, in the name of any Person other than the Clearing
Agency for such Global Capital Security, Cede, or other nominee thereof unless
(i) such Clearing Agency advises the Depositor and the Property Trustee in
writing
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that such Clearing Agency is no longer willing or able to properly discharge its
responsibilities as Clearing Agency with respect to such Global Capital
Security, and the Depositor is unable to locate a qualified successor, (ii) the
Issuer Trust at its option advises the Depositary in writing that it elects to
terminate the book-entry system through the Clearing Agency, or (iii) there
shall have occurred and be continuing an Event of Default.
(c) If the Global Capital Security is to be exchanged for Other
Capital Securities or cancelled in whole, it shall be surrendered by or on
behalf of the Clearing Agency or its nominee to the Securities Registrar for
exchange or cancellation as provided in this Article V. If the Global Capital
Security is to be exchanged for Other Capital Securities or cancelled in part,
or if another Capital Security is to be exchanged in whole or in part for a
beneficial interest in the Global Capital Security, then either (i) such Global
Capital Security shall be so surrendered for exchange or cancellation as
provided in this Article V or (ii) the Liquidation Amount thereof shall be
reduced or increased by an amount equal to the portion thereof to be so
exchanged or cancelled or equal to the Liquidation Amount of such other Capital
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Security
Registrar, whereupon the Property Trustee, in accordance with the Applicable
Procedures, shall instruct the Clearing Agency or its authorized representative
to make a corresponding adjustment to its records. Upon any such surrender or
adjustment of the Global Capital Security by the Clearing Agency, accompanied by
registration instructions, the Property Trustee shall, subject to Section 5.4(b)
and as otherwise provided in this Article V, authenticate and deliver any
Capital Securities issuable in exchange for such Global Capital Security (or any
portion thereof) in accordance with the instructions of the Clearing Agency. The
Property Trustee shall not be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions.
(d) Every Capital Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, the Global
Capital Security or any portion thereof, whether pursuant to this Article V or
Article IV or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Capital Security, unless such Global Capital Security is
registered in the name of a Person other than the Clearing Agency for such
Global Capital Security or a nominee thereof.
(e) The Clearing Agency or its nominee, as the registered owner of
the Global Capital Security, shall be considered the Holder of the Capital
Securities represented by the Global Capital Security for all purposes under
this Trust Agreement and the Capital Securities, and owners of beneficial
interests in the Global Capital Security shall hold such interests pursuant to
the Applicable Procedures and, except as otherwise provided herein, shall not be
entitled to have any of the individual Capital Securities represented by the
Global Security registered in their names, shall not receive nor be entitled to
receive physical delivery of any such Capital Securities in definitive form and
shall not be considered the Holders thereof under this Trust Agreement.
Accordingly, any such owner's beneficial interest in the Global Capital Security
shall be shown
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only on, and the transfer of such interest shall be effected only through,
records maintained by the Clearing Agency or its nominee. Neither the Property
Trustee nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Clearing Agency.
(f) The rights of owners of beneficial interests in the Global
Capital Security shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such owners and
the Clearing Agency.
SECTION 5.5 REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY; CERTAIN
TRANSFERS AND EXCHANGES; CAPITAL SECURITIES CERTIFICATES; SECURITIES ACT
LEGENDS.
(a) The Property Trustee shall keep or cause to be kept at its
Corporate Trust Office a register or registers for the purpose of registering
Capital Securities Certificates and transfers and exchanges of Capital
Securities Certificates in which the registrar and transfer agent with respect
to the Capital Securities (the "Securities Registrar"), subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Capital Securities Certificates and Common Securities Certificates (subject
to Section 5.11 in the case of Common Securities Certificates) and registration
of transfers and exchanges of Capital Securities Certificates as herein
provided. Such register is herein sometimes referred to as the "Securities
Register." The Property Trustee is hereby appointed Securities Registrar for the
purpose of registering Capital Securities and transfers of Capital Securities as
herein provided.
Upon surrender for registration of transfer of any Capital Security
at the offices or agencies of the Property Trustee designated for that purpose
the Depositor shall execute, and authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Capital Securities of the
same series of any authorized denominations of like tenor and aggregate
principal amount and bearing such restrictive legends as may be required by this
Trust Agreement.
At the option of the Holder, Capital Securities may be exchanged
for other Capital Securities of any authorized denominations, of like tenor and
aggregate Liquidation Amount and bearing such restrictive legends as may be
required by this Trust Agreement, upon surrender of the Capital Securities to be
exchanged at such office or agency. Whenever any securities are so surrendered
for exchange, the Property Trustee shall execute and authenticate and deliver
the Capital Securities that the Holder making the exchange is entitled to
receive.
All Capital Securities issued upon any transfer or exchange of
Capital Securities shall be the valid obligations of the Issuer Trust,
evidencing the same debt, and entitled to the same benefits under this Trust
Agreement, as the Capital Securities surrendered upon such transfer or exchange.
Every Capital Security presented or surrendered for transfer or
exchange shall (if so required by the Property Trustee) be duly endorsed, or be
accompanied by a written instrument of
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transfer in form satisfactory to the Property Trustee and the Securities
Registrar, duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Capital Securities, but the Property Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Capital Securities.
Neither the Issuer Trust nor the Property Trustee shall be
required, pursuant to the provisions of this Section, (i) to issue, register the
transfer of or exchange any Capital Security during a period beginning at the
opening of business 15 days before the day of selection for redemption of
Capital Securities pursuant to Article IV and ending at the close of business on
the day of mailing of the notice of redemption, or (ii) to register the transfer
of or exchange any Capital Security so selected for redemption in whole or in
part, except, in the case of any such Capital Security to be redeemed in part,
any portion thereof not to be redeemed.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Trust Agreement, transfers and exchanges of Capital Securities
and beneficial interests in a Global Capital Security shall be made only in
accordance with this Section 5.5(b).
(i) Non-Global Restricted Capital Security to Global
Security. If the Holder of a Restricted Capital Security (other
than the Global Security) wishes at any time to transfer all or any
portion of such Trust Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in the Global
Security, such transfer may be effected only in accordance with the
provisions of this Clause (b)(i) and subject to the Applicable
Procedures. Upon receipt by the Security Registrar of (A) such
Trust Security as provided in Section 5.5(a) and instructions
satisfactory to the Security Registrar directing that a beneficial
interest in the Global Security in a specified Liquidation Amount
not greater than the Liquidation Amount of such Trust Security to
be credited to a specified Clearing Agency Participant's account
and (B) a Restricted Trust Securities Certificate duly executed by
such Holder or such Holder's attorney duly authorized in writing,
then the Security Registrar shall cancel such Trust Security (and
issue a new Trust Security in respect of any untransferred portion
thereof) as provided in Section 5.5(a) and increase the aggregate
Liquidation Amount of the Global Capital Security by the specified
Liquidation Amount as provided in Section 5.4(c).
(ii) Non-Global Capital Security to Non-Global Capital
Security. A Trust Security that is not a Global Capital Capital
Security may be transferred, in whole or in part, to a Person who
takes delivery in the form of another Trust Security that is not a
Global Security as provided in Section 5.5(a) provided that if the
Trust Security to be transferred in whole or in part is a
Restricted Capital Security, the Security Registrar
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shall have received a Restricted Securities Certificate duly
executed by the transferor Holder or such Holder's attorney duly
authorized in writing.
(iii) Exchanges Between Global Capital Security and
Non-Global Trust Security. A beneficial interest in the Global
Capital Security may be exchanged for a Trust Security that is not
a Global Capital Security as provided in Section 5.4.
(iv) Certain Initial Transfers of Non-Global Trust
Securities. In the case of Trust Securities initially issued other
than in global form, an initial transfer or exchange of such Trust
Securities that does not involve any change in beneficial ownership
may be made to an Institutional Accredited Investor or Investors as
if such transfer or exchange were not an initial transfer or
exchange; provided that written certification shall be provided by
the transferee and transferor of such Securities to the Securities
Registrar that such transfer or exchange does not involve a change
in beneficial ownership.
(v) Limitations Relating to Principal Amount.
Notwithstanding any other provision of this Trust Agreement and
unless otherwise specified as permitted by this Trust Agreement,
Trust Securities or portions thereof may be transferred or
exchanged only in principal amounts of not less than $100,000. Any
transfer, exchange or other disposition of Trust Securities in
contravention of this Section 5.5(b)(v) shall be deemed to be void
and of no legal effect whatsoever, any such transferee shall be
deemed not to be the Holder or owner of any beneficial interest in
such Trust Securities for any purpose, including but not limited to
the receipt of interest payable on such Trust Securities, and such
transferee shall be deemed to have no interest whatsoever in such
Trust Securities.
(c) Restricted Securities Legend. Except as set forth below, all
Capital Securities shall bear a Restricted Capital Securities Legend:
(i) subject to the following Clauses of this Section
5.5(c), a Capital Security or any portion thereof that is
exchanged, upon transfer or otherwise, for a Global Capital
Security or any portion thereof shall bear the Restricted Capital
Securities Legend while represented thereby;
(ii) subject to the following Clauses of this Section
5.5(c), a new Capital Security which is not a Global Capital
Security and is issued in exchange for another Capital Security
(including a Global Capital Security) or any portion thereof, upon
transfer or otherwise, shall, if such new Capital Security is
required to be issued in the form of a Restricted Capital Security,
bear a Restricted Capital Securities Legend;
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(iii) a new Capital Security (other than a Global Capital
Security) that does not bear a Restricted Capital Securities Legend
may be issued in exchange for or in lieu of a Restricted Capital
Security or any portion thereof that bears such a legend if, in the
Depositor's judgment, placing such a legend upon such new Capital
Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Property
Trustee, at the written direction of the Issuer Trust in the form
of an Officers' Certificate, shall authenticate and deliver such
new Capital Security as provided in this Article V;
(iv) notwithstanding the foregoing provisions of this
Section 5.5(c), a Successor Capital Security of a Capital Security
that does not bear a Restricted Capital Securities Legend shall not
bear such form of legend unless the Depositor has reasonable cause
to believe that such Successor Capital Security is a "restricted
security" within the meaning of Rule 144 under the Securities Act,
in which case the Property Trustee, at the written direction of the
Issuer Trust in the form of an Officers' Certificate, shall
authenticate and deliver a new Capital Security bearing a
Restricted Capital Securities Legend in exchange for such Successor
Capital Security as provided in this Article V; and
(v) Trust Securities distributed to a holder of Capital
Securities upon dissolution of the Issuer Trust shall bear a
Restricted Capital Securities Legend if the Capital Securities so
held bear a similar legend.
SECTION 5.6 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrators such security or indemnity as may be required
by them to save each of them harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide purchaser,
the Administrators, or any one of them, on behalf of the Issuer Trust shall
execute and make available for delivery, and the Property Trustee shall
authenticate, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Trust Securities Certificate, a new Trust Securities Certificate of
like class, tenor and denomination. In connection with the issuance of any new
Trust Securities Certificate under this Section, the Administrators or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section shall
constitute conclusive evidence of an undivided beneficial interest in the assets
of the Issuer Trust corresponding to that evidenced by the lost, stolen or
destroyed Trust Certificate, as if originally issued, whether or not the lost,
stolen or destroyed Trust Securities Certificate shall be found at any time.
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SECTION 5.7 PERSONS DEEMED HOLDERS.
The Issuer Trustees or the Securities Registrar shall treat the
Person in whose name any Trust Securities are issued as the owner of such Trust
Securities for the purpose of receiving Distributions and for all other purposes
whatsoever, and none of the Issuer Trustees, the Administrators nor the
Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.8 ACCESS TO LIST OF HOLDERS' NAMES AND ADDRESSES.
Each Holder and each Owner shall be deemed to have agreed not to
hold the Depositor, the Property Trustee, or the Administrators accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
SECTION 5.9 MAINTENANCE OF OFFICE OR AGENCY.
The Property Trustee shall designate, with the consent of the
Administrators, which consent shall not be unreasonably withheld, an office or
offices or agency or agencies where Capital Securities Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Issuer Trustees in respect of the Trust Securities
Certificates may be served. The Property Trustee initially designates its
Corporate Trust Office at Four Albany Street, New York, NY 10006, Attention:
Corporate Trust and Agency Group - Corporate Market Services, as its corporate
trust office for such purposes. The Property Trustee shall give prompt written
notice to the Depositor, the Administrators and to the Holders of any change in
the location of the Securities Register or any such office or agency.
SECTION 5.10 APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Holders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrators. Any Paying Agent shall have the
revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Property Trustee may
revoke such power and remove any Paying Agent in its sole discretion. The Paying
Agent shall initially be the Property Trustee. Any Person acting as Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Administrators, and the Property Trustee. In the event that the Property Trustee
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Property Trustee shall appoint a successor
(which shall be a bank or trust company) that is reasonably acceptable to the
Administrators to act as Paying Agent. Such successor Paying Agent or any
additional Paying Agent appointed by the Administrators shall execute and
deliver to the Issuer Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Issuer Trustees that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Holders in trust for the benefit
of the
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Holders entitled thereto until such sums shall be paid to such Holders. The
Paying Agent shall return all unclaimed funds to the Property Trustee and upon
removal of a Paying Agent such Paying Agent shall also return all funds in its
possession to the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6
herein shall apply to the Bank also in its role as Paying Agent, for so long as
the Bank shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Trust Agreement to the
Paying Agent shall include any co-paying agent chosen by the Property Trustee
unless the context requires otherwise.
SECTION 5.11 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
At each Closing Time, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. Neither the Depositor
nor any successor Holder of the Common Securities may transfer less than all the
Common Securities, and the Depositor or any such successor Holder may transfer
the Common Securities only (i) in connection with a consolidation or merger of
the Depositor into another corporation or any conveyance, transfer or lease by
the Depositor of its properties and assets substantially as an entirety to any
Person, pursuant to Section 8.1 of the Indenture, or (ii) to an Affiliate of the
Depositor in compliance with applicable law (including the Securities Act and
applicable state securities and blue sky laws). To the fullest extent permitted
by law, any attempted transfer of the Common Securities, other than as set forth
in the immediately preceding sentence, shall be void. The Administrators shall
cause each Common Securities Certificate issued to the Depositor to contain a
legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR
AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11
OF THE TRUST AGREEMENT."
SECTION 5.12 NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Holders
is required under this Trust Agreement, for so long as Capital Securities are
represented by a Global Capital Securities Certificate, the Administrators and
the Issuer Trustees shall give all such notices and communications specified
herein to be given to the Clearing Agency, and shall have no obligations to the
Owners.
SECTION 5.13 RIGHTS OF HOLDERS.
(a) The legal title to the Trust Property is vested exclusively in
the Property Trustee (in its capacity as such) in accordance with Section 2.9,
and the Holders shall not have any right or title therein other than the
undivided beneficial ownership interest in the assets of the Issuer Trust
conferred by their Trust Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Issuer Trust except
as described below. The Trust Securities shall be personal property giving only
the rights specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights and
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when issued and delivered to Holders against payment of the purchase price
therefor, as provided herein, will be fully paid and nonassessable by the Issuer
Trust. Except as otherwise provided in Section 4.8, the Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
(b) For so long as any Capital Securities remain Outstanding, if,
upon a Debenture Event of Default, the Debenture Trustee fails or the holders of
not less than 25% in principal amount of the outstanding Junior Subordinated
Debentures fail to declare the principal of all of the Junior Subordinated
Debentures to be immediately due and payable, the Holders of at least 25% in
Liquidation Amount of the Capital Securities then Outstanding shall have such
right to make such declaration by a notice in writing to the Property Trustee,
the Depositor and the Debenture Trustee.
At any time after such a declaration of acceleration with respect
to the Junior Subordinated Debentures has been made and before a judgment or
decree for payment of the money due has been obtained by the Debenture Trustee
as provided in the Indenture, the Holders of a Majority in Liquidation Amount of
the Capital Securities, by written notice to the Property Trustee, the Depositor
and the Debenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all of
the Junior Subordinated Debentures,
(B) any accrued Additional Interest on all of the
Junior Subordinated Debentures,
(C) the principal of (and premium, if any, on) any
Junior Subordinated Debentures which have become due otherwise
than by such declaration of acceleration and interest and
Additional Interest thereon at the rate borne by the Junior
Subordinated Debentures, and
(D) all sums paid or advanced by the Debenture
Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee
and the Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Junior
Subordinated Debentures, other than the non-payment of the principal of
the Junior Subordinated
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Debentures which has become due solely by such acceleration, have been
cured or waived as provided in Section 5.13 of the Indenture.
If the Property Trustee fails to annul any such declaration and
waive such default, the Holders of at least a Majority in Liquidation Amount of
the Capital Securities shall also have the right to rescind and annul such
declaration and its consequences by written notice to the Depositor, the
Property Trustee and the Debenture Trustee, subject to the satisfaction of the
conditions set forth in Clause (i) and (ii) of this Section 5.13.
The Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, on behalf of the Holders of all the Capital Securities,
waive any past default under the Indenture, except a default in the payment of
principal or interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Junior
Subordinated Debentures. No such rescission shall affect any subsequent default
or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of the
Capital Securities all or part of which is represented by Global Capital
Securities, a record date shall be established for determining Holders of
Outstanding Capital Securities entitled to join in such notice, which record
date shall be at the close of business on the day the Property Trustee receives
such notice. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such notice, whether or not
such Holders remain Holders after such record date; provided, that, unless such
declaration of acceleration, or rescission and annulment, as the case may be,
shall have become effective by virtue of the requisite percentage having joined
in such notice prior to the day which is 90 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving, after expiration of such 90-day period, a new
written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.13(b).
(c) For so long as any Capital Securities remain Outstanding, to
the fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, upon a Debenture Event of Default specified in
Section 5.1(1) or 5.1(2) of the Indenture, any Holder of Capital Securities
shall have the right to institute a proceeding directly against the Depositor,
pursuant to Section 5.9 of the Indenture, for enforcement of payment to such
Holder of the principal amount of or interest on Junior Subordinated Debentures
having an aggregate principal
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amount equal to the aggregate Liquidation Amount of the Capital Securities of
such Holder (a "Direct Action"). Except as set forth in Sections 5.13(b) and
5.13 (c), the Holders of Capital Securities shall have no right to exercise
directly any right or remedy available to the holders of, or in respect of, the
Junior Subordinated Debentures.
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1 LIMITATIONS ON HOLDER'S VOTING RIGHTS.
(a) Except as provided in this Trust Agreement and in the Indenture
and as otherwise required by law, no Holder of Capital Securities shall have any
right to vote or in any manner otherwise control the administration, operation
and management of the Issuer Trust or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Trust
Securities Certificates be construed so as to constitute the Holders from time
to time as members of an association.
(b) So long as any Junior Subordinated Debentures are held by the
Property Trustee on behalf of the Issuer Trust, the Property Trustee shall not
(i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or executing any trust or power
conferred on the Property Trustee with respect to such Junior Subordinated
Debentures, (ii) waive any past default that may be waived under Section 5.13 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Junior Subordinated Debentures shall be due and payable
or (iv) consent to any amendment, modification or termination of the Indenture
or the Junior Subordinated Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders of at least a
Majority in Liquidation Amount of the Capital Securities, provided, however,
that where a consent under the Indenture would require the consent of each
Holder of Junior Subordinated Debentures affected thereby, no such consent shall
be given by the Property Trustee without the prior written consent of each
Holder of Capital Securities. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of Capital
Securities, except by a subsequent vote of the Holders of Capital Securities.
The Property Trustee shall notify all Holders of the Capital Securities of any
notice of default received with respect to the Junior Subordinated Debentures.
In addition to obtaining the foregoing approvals of the Holders of the Capital
Securities, prior to taking any of the foregoing actions, the Property Trustee
shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced
in such matters to the effect that such action will not cause the Issuer Trust
to be taxable as a corporation for United States Federal income tax purposes.
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(c) If any proposed amendment to the Trust Agreement provides for,
or the Issuer Trust otherwise proposes to effect, (i) any action that would
adversely affect in any material respect the interests, powers, preferences or
special rights of the Capital Securities, whether by way of amendment to the
Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination
of the Issuer Trust, other than pursuant to the terms of this Trust Agreement,
then the Holders of Outstanding Trust 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 Capital Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Issuer Trust to be
taxable as a corporation for United States Federal income tax purposes.
SECTION 6.2 NOTICE OF MEETINGS.
Notice of all meetings of the Holders, stating the time, place and
purpose of the meeting, shall be given by the Property Trustee pursuant to
Section 10.8 to each Holder of record, at his registered address, at least 15
days and not more than 90 days before the meeting. At any such meeting, any
business properly before the meeting may be so considered whether or not stated
in the notice of the meeting. Any adjourned meeting may be held as adjourned
without further notice.
SECTION 6.3 MEETINGS OF HOLDERS.
No annual meeting of Holders is required to be held. The Property
Trustee, however, shall call a meeting of Holders to vote on any matter upon the
written request of the Holders of record of 25% of the aggregate Liquidation
Amount of the Capital Securities and the Administrators or the Property Trustee
may, at any time in their discretion, call a meeting of Holders of Capital
Securities to vote on any matters as to which Holders are entitled to vote.
Holders of at least a Majority in Liquidation Amount of the Capital
Securities, present in person or represented by proxy, shall constitute a quorum
at any meeting of Holders of the Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the
Holders of record present, in person or by proxy, holding Capital Securities
representing at least a Majority in Liquidation Amount of the Capital Securities
held by the Holders present, either in person or by proxy, at such meeting shall
constitute the action of the Holders of Capital Securities, unless this Trust
Agreement requires a greater number of affirmative votes.
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SECTION 6.4 VOTING RIGHTS.
Holders shall be entitled to one vote for each $1,000 of
Liquidation Amount represented by their Outstanding Trust Securities in respect
of any matter as to which such Holders are entitled to vote.
SECTION 6.5 PROXIES, ETC.
At any meeting of Holders, any Holder entitled to vote thereat may
vote by proxy, provided that no proxy shall be voted at any meeting unless it
shall have been placed on file with the Property Trustee, or with such other
officer or agent of the Issuer Trust as the Property Trustee may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of the Property Trustee, proxies may be solicited in the name of the
Property Trustee or one or more officers of the Property Trustee. Only Holders
of record shall be entitled to vote. When Trust Securities are held jointly by
several persons, any one of them may vote at any meeting in person or by proxy
in respect of such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
SECTION 6.6 HOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Holders at a meeting may be taken
without a meeting if Holders holding at least a Majority in Liquidation Amount
of all Trust Securities entitled to vote in respect of such action (or such
larger proportion thereof as shall be required by any other provision of this
Trust Agreement) shall consent to the action in writing.
SECTION 6.7 RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Holders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrators or Property Trustee may from time to time fix a
date, not more than 90 days prior to the date of any meeting of Holders or the
payment of a distribution or other action, as the case may be, as a record date
for the determination of the identity of the Holders of record for such
purposes.
SECTION 6.8 ACTS OF HOLDERS.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Trust Agreement to be
given, made or taken by Holders may be
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embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to the Property
Trustee. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Issuer Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Issuer Trustee or Administrator receiving the same
deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Trust Security shall bind every future
Holder of the same Trust Security and the Holder of every Trust Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Issuer Trustees, the Administrators or the Issuer Trust in reliance thereon,
whether or not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise among the Holders, the Administrators or
the Issuer Trustees with respect to the authenticity, validity or binding nature
of any request, demand, authorization, direction, consent, waiver or other Act
of such Holder or Issuer Trustee under this Article VI, then the determination
of such matter by the Property Trustee shall be conclusive with respect to such
matter.
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A Holder 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 Issuer Trust, any Issuer Trustee, any Administrator or
any person or entity.
SECTION 6.9 INSPECTION OF RECORDS.
Upon reasonable notice to the Administrators and the Property
Trustee, the records of the Issuer Trust shall be open to inspection by Holders
during normal business hours for any purpose reasonably related to such Holder's
interest as a Holder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE.
The Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Holders that:
(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
New York, with trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of this Trust Agreement.
(b) The execution, delivery and performance by the Property Trustee
of this Trust Agreement has been duly authorized by all necessary corporate
action on the part of the Property Trustee; and this Trust Agreement has been
duly executed and delivered by the Property Trustee, and constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(c) The execution, delivery and performance of this Trust Agreement
by the Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Property Trustee.
(d) At the Closing Time, the Property Trustee has not knowingly
created any liens or encumbrances on the Trust Securities.
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(e) No consent, approval or authorization of, or registration with
or notice to, any New York State or federal banking authority is required for
the execution, delivery or performance by the Property Trustee, of this Trust
Agreement.
(f) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Trust Agreement.
(g) The execution, delivery and performance by the Delaware Trustee
of this Trust Agreement has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee; and this Trust Agreement has been
duly executed and delivered by the Delaware Trustee, and constitutes a legal,
valid and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' right
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(h) The execution, delivery and performance of this Trust Agreement
by the Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Delaware Trustee.
(i) No consent, approval or authorization of, or registration with
or notice to any state or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of this Trust
Agreement.
(j) The Delaware Trustee is an entity which has its principal place
of business in the State of Delaware.
SECTION 7.2 REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Holders that:
(a) the Trust Securities Certificates issued at the Closing Time on
behalf of the Issuer Trust have been duly authorized and will have been duly and
validly executed, and, subject to payment therefor, issued and delivered by the
Issuer Trustees pursuant to the terms and provisions of, and in accordance with
the requirements of, this Trust Agreement, and the Holders will be, as of each
such date, entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable
by the Issuer Trust (or the Issuer Trustees on behalf of the Issuer Trust) under
the laws of the State of Delaware or any political subdivision thereof in
connection with the execution, delivery and
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performance by either the Property Trustee or the Delaware Trustee, as the case
may be, of this Trust Agreement.
ARTICLE VIII
THE ISSUER TRUSTEES; THE ADMINISTRATORS
SECTION 8.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Issuer Trustees and the
Administrators shall be as provided by this Trust Agreement and, in the case of
the Property Trustee, by the Trust Indenture Act. Notwithstanding the foregoing,
no provision of this Trust Agreement shall require the Issuer Trustees or the
Administrators to expend or risk their own funds or otherwise incur any
financial liability in the performance of any of their duties hereunder, or in
the exercise of any of their rights or powers, if they shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Trust Agreement relating to the
conduct or affecting the liability of or affording protection to the Issuer
Trustees or the Administrators shall be subject to the provisions of this
Section. Nothing in this Trust Agreement shall be construed to release an
Administrator or an Issuer Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct. To the extent
that, at law or in equity, an Issuer Trustee or Administrator has duties and
liabilities relating to the Issuer Trust or to the Holders, such Issuer Trustee
or Administrator shall not be liable to the Issuer Trust or to any Holder for
such Issuer Trustee's or Administrator's good faith reliance on the provisions
of this Trust Agreement. The provisions of this Trust Agreement, to the extent
that they restrict the duties and liabilities of the Issuer Trustees and
Administrators otherwise existing at law or in equity, are agreed by the
Depositor and the Holders to replace such other duties and liabilities of the
Issuer Trustees and Administrators.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that neither the Issuer Trustees nor
the Administrators are personally liable to it for any amount distributable in
respect of any Trust Security or for any other liability in respect of any Trust
Security. This Section 8.1(b) does not limit the liability of the Issuer
Trustees expressly set forth elsewhere in this Trust Agreement or, in the case
of the Property Trustee, in the Trust Indenture Act.
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(c) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.10), and no implied
covenants shall be read into this Trust Agreement against the Property Trustee.
If an Event of Default has occurred (that has not been cured or waived pursuant
to Section 5.13 of the Indenture), the Property Trustee shall enforce this Trust
Agreement for the benefit of the Holders and shall exercise such of the rights
and powers vested in it by this Trust Agreement, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express
provisions of this Trust Agreement (including pursuant to
Section 10.10), and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Trust
Agreement (including pursuant to Section 10.10); and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively
rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee
and conforming to the requirements of this Trust
Agreement; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust
Indenture Act are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not
they conform to the requirements of this Trust Agreement;
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by an authorized officer of
the Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of at least a
Majority in Liquidation Amount of the Capital Securities relating
to the time, method and place of conducting any proceeding for any
remedy available to the
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Property Trustee, or exercising any trust or power conferred upon
the Property Trustee under this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Junior
Subordinated Debentures and the Payment Account shall be to deal
with such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Property
Trustee under this Trust Agreement and the Trust Indenture Act;
(v) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree with the Depositor; and money held by the Property Trustee
need not be segregated from other funds held by it except in
relation to the Payment Account maintained by the Property Trustee
pursuant to Section 3.1 and except to the extent otherwise required
by law;
(vi) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Depositor
with their respective duties under this Trust Agreement, nor shall
the Property Trustee be liable for the default or misconduct of any
other Issuer Trustee, the Administrators or the Depositor; and
(vii) no provision of this Trust Agreement shall require
the Property Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Property Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured
to it under the terms of this Trust Agreement or adequate indemnity
against such risk or liability is not reasonably assured to it.
(e) The Administrators shall not be responsible for monitoring the
compliance by the Issuer Trustee or the Depositor with their respective duties
under this Trust Agreement, nor shall either Administrator be liable for the
default or misconduct of any other Administrator, the Issuer Trustees or the
Depositor.
SECTION 8.2 CERTAIN NOTICES.
(a) Within five Business Days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Property Trustee, the
Property Trustee shall transmit, in the manner and to the extent provided in
Section 10.8, notice of such Event of Default to the Holders and the
Administrators, unless such Event of Default shall have been cured or waived.
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(b) Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the Junior
Subordinated Debentures pursuant to the Indenture, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.8, notice of
such exercise to the Holders and the Administrators, unless such exercise shall
have been revoked.
SECTION 8.3 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any direction or act of the Depositor contemplated by this
Trust Agreement shall be sufficiently evidenced by an Officers' Certificate;
(c) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
re-recording, refiling or reregistration thereof;
(d) the Property Trustee may consult with counsel of its own
choosing (which counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees) and the advice of such counsel
shall be full and complete authorization and protection in respect of any action
taken suffered or omitted by it hereunder in good faith and in reliance thereon
and in accordance with such advice; the Property Trustee shall have the right at
any time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(e) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Holders pursuant to this Trust Agreement, unless such
Holders shall have offered to the Property Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction; provided that,
nothing contained in this Section 8.3(e) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Trust Agreement;
(f) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice,
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request, consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing to do so by
one or more Holders, but the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(g) the Property Trustee may execute any of the trusts or powers
hereunder or perform any of its duties hereunder either directly or by or
through its agents or attorneys, provided that the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(h) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders (which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be fully protected in
acting in accordance with such instructions; and
(i) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on any Issuer Trustee or Administrator to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to any Issuer Trustee or
Administrator shall be construed to be a duty.
SECTION 8.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Issuer Trust, and the
Issuer Trustees and the Administrators do not assume any responsibility for
their correctness. The Issuer Trustees and the Administrators shall not be
accountable for the use or application by the Depositor of the proceeds of the
Junior Subordinated Debentures.
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SECTION 8.5 MAY HOLD SECURITIES.
Except as provided in the definition of the term "Outstanding" in
Article I, the Administrators, any Issuer Trustee or any other agent of any
Issuer Trustee or the Issuer Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and, subject to Sections 8.8 and
8.13, may otherwise deal with the Issuer Trust with the same rights it would
have if it were not an Administrator, Issuer Trustee or such other agent.
SECTION 8.6 COMPENSATION; INDEMNITY; FEES.
The Depositor, as borrower, agrees:
(a) to pay to the Issuer Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) to reimburse the Issuer Trustees upon request for all
reasonable expenses, disbursements and advances incurred or made by the Issuer
Trustees in accordance with any provision of this Trust Agreement (including the
reasonable compensation, expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to their
negligence or willful misconduct; and
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Issuer Trustee, (ii) each Administrator, (iii) any
Affiliate of any Issuer Trustee, (iv) any officer, director, shareholder,
employee, representative or agent of any Issuer Trustee, and (v) any employee or
agent of the Issuer Trust, (referred to herein as an "Indemnified Person") from
and against any loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person arising out of or
in connection with the creation, operation or dissolution of the Issuer Trust or
any act or omission performed or omitted by such Indemnified Person in good
faith on behalf of the Issuer Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Trust Agreement, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement.
No Issuer Trustee may claim any lien or charge on any Trust
Property as a result of any amount due pursuant to this Section 8.6.
The Depositor, any Administrator and any Issuer Trustee may engage
in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Issuer Trust, and the Issuer Trust and the Holders of
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Trust Securities shall have no rights by virtue of this Trust Agreement in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Issuer
Trust, shall not be deemed wrongful or improper. Neither the Depositor, any
Administrator, nor any Issuer Trustee shall be obligated to present any
particular investment or other opportunity to the Issuer Trust even if such
opportunity is of a character that, if presented to the Issuer Trust, could be
taken by the Issuer Trust, and the Depositor, any Administrator or any Issuer
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Issuer Trustee may engage or be interested in any
financial or other transaction with the Depositor or any Affiliate of the
Depositor, or may act as depository for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the
Depositor or its Affiliates.
SECTION 8.7 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF
TRUSTEES AND ADMINISTRATORS.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article VIII. At the time of appointment, the Property Trustee must have
securities rated in one of the three highest rating categories by a nationally
recognized statistical rating organization.
(b) There shall at all times be one or more Administrators
hereunder. Each Administrator shall be either a natural person who is at least
21 years of age or a legal entity that shall act through one or more persons
authorized to bind that entity. An employee, officer or Affiliate of the
Depositor may serve as an Administrator.
(c) There shall at all times be a Delaware Trustee. The Delaware
Trustee shall either be (i) a natural person who is at least 21 years of age and
a resident of the State of Delaware or (ii) a legal entity with its principal
place of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or more
persons authorized to bind such entity.
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SECTION 8.8 CONFLICTING INTERESTS.
(a) If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Property Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Trust Agreement.
(b) The Guarantee and the Indenture shall be deemed to be
sufficiently described in this Trust Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9 CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be continuing,
at any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Property Trustee shall have power to
appoint, and upon the written request of the Property Trustee, the Depositor and
the Administrators shall for such purpose join with the Property Trustee in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. Any co-trustee or
separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.
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 by one or more
Administrators, and the Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Property Trustees specified hereunder, shall be
exercised, solely by the Property Trustee and not by such co-trustee or separate
trustee.
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(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 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 8.9.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act
of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of any Issuer 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 8.11.
Subject to the immediately preceding paragraph, a Relevant Trustee
may resign at any time by giving written notice thereof to the Holders. The
Relevant Trustee shall appoint a successor by requesting from at least three
Persons meeting the eligibility requirements its expenses and charges to serve
as the successor Trustee on a form provided by the Administrators, and selecting
the Person who agrees to the lowest expenses and charges, subject to the prior
consent of the Depositor which consent shall not be unreasonably withheld. If
the instrument of
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acceptance by the successor Trustee required by Section 8.11 shall not have been
delivered to the Relevant Trustee within 60 days after the giving of such notice
of resignation, the Relevant Trustee may petition, at the expense of the Issuer
Trust, any court of the State of Delaware for the appointment of a successor
Relevant Trustee.
The Property Trustee or the Delaware Trustee may be removed at any
time by Act of the Holders of at least a Majority in Liquidation Amount of the
Capital Securities, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Issuer Trust) (i) for cause (including upon the
occurrence of an Event of Default described in subparagraph (f) of the
definition thereof with respect to the Relevant Trustee), or (ii) if a Debenture
Event of Default shall have occurred and be continuing at any time.
If any Issuer Trustee shall resign, it shall appoint its successor.
If a resigning Relevant Trustee shall fail to appoint a successor, or if a
Relevant Trustee shall be removed or become incapable of acting as Issuer
Trustee, or if any vacancy shall occur in the office of any Issuer Trustee for
any cause, the Holders of the Capital Securities, by Act of the Holders of
record of not less than 25% in aggregate Liquidation Amount of the Capital
Securities then Outstanding delivered to such Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees, and such successor Issuer
Trustee shall comply with the applicable requirements of Section 8.11. If no
successor Trustee shall have been so appointed by the Holders of the Capital
Securities and accepted appointment in the manner required by Section 8.11, any
Holder, on behalf of himself and all others similarly situated, or any other
Issuer Trustee, may petition any court in the State of Delaware for the
appointment of a successor Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Relevant Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 10.8 and shall give notice to the
Depositor and to the Administrators. Each notice shall include the name of the
Relevant Trustee and the address of its Corporate Trust Office if it is the
Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Delaware Trustee who is a natural person dies or
becomes, in the opinion of the Holders of the Common Securities, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by the Property Trustee following the procedures regarding expenses
and charges set forth above (with the successor in each case being a Person who
satisfies the eligibility requirement for Administrators or Delaware Trustee, as
the case may be, set forth in Section 8.7).
SECTION 8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each such successor Relevant Trustee
with respect to the Trust Securities
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shall execute, acknowledge and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a) 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 Issuer Trust, and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Issuer Trust by more than one Relevant
Trustee, it being understood that nothing herein or in such amendment shall
constitute such Relevant co-trustees and upon the execution and delivery of such
amendment 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; but,
on request of the Issuer 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 Issuer
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 first or second preceding paragraph, as the case may
be.
No successor Relevant Trustee shall accept its appointment unless
at the time of such acceptance such successor Relevant Trustee shall be
qualified and eligible under this Article VIII.
SECTION 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee or the Delaware Trustee
may be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article VIII, without the execution or filing
of any paper or any further act on the part of any of the parties hereto.
SECTION 8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR
ISSUER TRUST.
If and when the Property Trustee shall be or become a creditor of
the Depositor (or any other obligor upon the Trust Securities), the Property
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of claims against the Depositor (or any such other obligor) only
if this Trust Agreement is subject to the Trust Indenture Act.
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SECTION 8.14 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Issuer Trust or any other obligor upon the Trust
Securities or the property of the Issuer Trust or of such other obligor, the
Property Trustee (irrespective of whether any Distributions on the Trust
Securities shall then be due and payable and irrespective of whether the
Property Trustee shall have made any demand on the Issuer Trust for the payment
of any past due Distributions) shall be entitled and empowered, to the fullest
extent permitted by law, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or compensation affecting
the Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 8.15 REPORTS BY PROPERTY TRUSTEE.
(a) Not later than January 31 of each year commencing with January
31, 1998, the Property Trustee shall transmit to all Holders in accordance with
Section 10.8, and to the Depositor, a brief report dated as of the immediately
preceding December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof,
if to the best of its knowledge it has continued to be eligible
under said Section, a written statement to such effect; and
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(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last report
and any action taken by the Property Trustee in the performance of
its duties hereunder which it has not previously reported and which
in its opinion materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to Holders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with the Depositor.
SECTION 8.16 REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrators on behalf of the Issuer Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act. The Depositor and the Administrators shall annually file with the Property
Trustee a certificate specifying whether such Person is in compliance with all
the terms and covenants applicable to such Person hereunder.
SECTION 8.17 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrators on behalf of the
Issuer Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.18 NUMBER OF ISSUER TRUSTEES.
(a) The number of Issuer Trustees shall be two. The Property
Trustee and the Delaware Trustee may be the same Person, in which case, the
number of Issuer Trustees may be one.
(b) If an Issuer Trustee ceases to hold office for any reason, a
vacancy shall occur. The vacancy shall be filled with an Issuer Trustee
appointed in accordance with Section 8.10.
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(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to annul the Issuer Trust.
SECTION 8.19 DELEGATION OF POWER.
(a) Any Administrator may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.7(a) or making any governmental filing; and
(b) The Administrators shall have power to delegate from time to
time to such of their number the doing of such things and the execution of such
instruments either in the name of the Issuer Trust or the names of the
Administrators or otherwise as the Administrators may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of this Trust Agreement.
SECTION 8.20 APPOINTMENT OF ADMINISTRATORS.
(a) The Administrators shall be appointed by the Holders of a
Majority in Liquidation Amount of the Common Securities and may be removed by
the Holders of a Majority in Liquidation Amount of the Common Securities or may
resign at any time. Upon any resignation or removal, the Depositor shall appoint
a successor Administrator. Each Administrator shall execute this Trust Agreement
thereby agreeing to comply with, and be legally bound by, all of the terms,
conditions and provisions of this Trust Agreement. If at any time there is no
Administrator, the Property Trustee or any Holder who has been a Holder of Trust
Securities for at least six months may petition any court of competent
jurisdiction for the appointment of one or more Administrators.
(b) Whenever a vacancy in the number of Administrators shall occur,
until such vacancy is filled by the appointment of an Administrator in
accordance with this Section 8.20, the Administrators in office, regardless of
their number (and notwithstanding any other provision of this Agreement), shall
have all the powers granted to the Administrators and shall discharge all the
duties imposed upon the Administrators by this Trust Agreement.
(c) Notwithstanding the foregoing, or any other provision of this
Trust Agreement, in the event any Administrator or a Delaware Trustee who is a
natural person dies or becomes, in the opinion of the Holders of a Majority in
Liquidation Amount of the Common Securities, incompetent, or incapacitated, the
vacancy created by such death, incompetence or incapacity may be filled by the
remaining Administrators, if there were at least two of them prior to such
vacancy, and by the Depositor, if there were not two such Administrators
immediately prior to such vacancy (with the successor in each case being a
Person who satisfies the eligibility requirement for Administrators or Delaware
Trustee, as the case may be, set forth in Section 8.7).
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Except as otherwise provided in this Trust Agreement, or by
applicable law, any one Administrator may execute any document or otherwise take
any action which the Administrators are authorized to take under this Trust
Agreement.
ARTICLE IX
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 9.1 TERMINATION UPON EXPIRATION DATE.
Unless earlier dissolved, the Issuer Trust shall automatically
dissolve on June 30, 2028 (the "Expiration Date"), and thereafter the Trust
Property shall be distributed in accordance with Section 9.4.
SECTION 9.2 EARLY TERMINATION.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of the appointment of a receiver or other
similar official in any liquidation, insolvency or similar proceeding with
respect to the Depositor or all or substantially all of its property, or a court
or other governmental agency shall enter a decree or order and such decree or
order shall remain unstayed and undischarged for a period of 60 days, unless the
Depositor shall transfer the Common Securities as provided by Section 5.11, in
which case this provision shall refer instead to any such successor Holder of
the Common Securities;
(b) the written direction to the Property Trustee from the Holder
of the Common Securities at any time to dissolve the Issuer Trust and to
distribute the Junior Subordinated Debentures to Holders in exchange for the
Capital Securities (which direction, subject to Section 9.4(a), is optional and
wholly within the discretion of the Holders of the Common Securities);
(c) the repayment of all of the Capital Securities in connection
with the redemption of all the Junior Subordinated Debentures; and
(d) the entry of an order for dissolution of the Issuer Trust by a
court of competent jurisdiction.
SECTION 9.3 TERMINATION.
As soon as is practicable after the occurrence of an event referred
to in Section 9.1 or 9.2, and upon the completion of the winding-up and
liquidation of the Issuer Trust, the Administrators and the Issuer Trustees
(each of whom is hereby authorized to take such action) shall file a certificate
of cancellation with the Secretary of State of the State of Delaware
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terminating the Issuer Trust and, upon such filing, the respective obligations
and responsibilities of the Issuer Trustees, the Administrators and the Issuer
Trust created and continued hereby shall terminate.
SECTION 9.4 LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b) or
(d) of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be
wound-up and liquidated by the Property Trustee as expeditiously as the Property
Trustee determines to be possible by distributing, after paying or making
reasonable provision to pay all claims and obligations of the Issuer Trust in
accordance with Section 3808(e) of the Delaware Business Trust Act, to each
Holder a Like Amount of Junior Subordinated Debentures, subject to Section
9.4(d). Notice of liquidation shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not later than 15 nor more than 45
days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that, from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be Outstanding and any
Trust Securities Certificates not surrendered for exchange will be
deemed to represent a Like Amount of Junior Subordinated
Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Junior Subordinated Debentures, or if Section
9.4(d) applies receive a Liquidation Distribution, as the
Administrators or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to
effect the liquidation of the Issuer Trust and distribution of the Junior
Subordinated Debentures to Holders, the Property Trustee shall establish a
record date for such distribution (which shall be not more than 30 days prior to
the Liquidation Date) and, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish such procedures as it
shall deem appropriate to effect the distribution of Junior Subordinated
Debentures in exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) the Clearing Agency for the Capital Securities or its nominee,
as the registered holder of the Global Capital Securities Certificate, shall
receive a registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution with respect to
Capital Securities
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held by the Clearing Agency or its nominee, and, (iii) any Trust Securities
Certificates not held by the Clearing Agency for the Capital Securities or its
nominee as specified in clause (ii) above will be deemed to represent Junior
Subordinated Debentures having a principal amount equal to the stated
Liquidation Amount of the Trust Securities represented thereby and bearing
accrued and unpaid interest in an amount equal to the accumulated and unpaid
Distributions on such Trust Securities until such certificates are presented to
the Securities Registrar for transfer or reissuance.
(d) If, notwithstanding the other provisions of this Section 9.4,
whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Junior Subordinated Debentures is
not practical, or if any Early Termination Event specified in clause (c) of
Section 9.2 occurs, the Issuer Trust shall be dissolved, and the Trust Property
shall be liquidated, by the Property Trustee in such manner as the Property
Trustee determines. In such event, on the date of the dissolution of the Issuer
Trust, Holders will be entitled to receive out of the assets of the Issuer Trust
available for distribution to Holders, after paying or making reasonable
provision to pay all claims and obligations of the Issuer Trust in accordance
with Section 3808(e) of the Delaware Business Trust Act, an amount equal to the
aggregate of Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Issuer Trust has insufficient assets available
to pay in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Issuer Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holders of the Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, pro rata (determined as aforesaid) with
Holders of Capital Securities, except that, if a Debenture Event of Default has
occurred and is continuing, the Capital Securities shall have a priority over
the Common Securities as provided in Section 4.3.
SECTION 9.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF
THE ISSUER TRUST.
The Issuer Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to, any entity, except pursuant to this
Section 9.5. At the request of the Holders of the Common Securities, and with
the consent of the Holders of at least a Majority in Liquidation Amount of the
Capital Securities, but without the consent of the Issuer Trustees, the Issuer
Trust may merge with or into, consolidate, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to a trust organized as such under the laws of any state; provided, however,
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Issuer Trust with respect to the Capital Securities or (b)
substitutes for the Capital Securities other securities having substantially the
same terms as the Capital Securities (the "Successor Capital Securities") so
long as the Successor Capital Securities have the same
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priority as the Capital Securities with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) a trustee of such successor
entity possessing the same powers and duties as the Property Trustee is
appointed to hold the Junior Subordinated Debentures, (iii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Capital Securities (including any Successor Capital Securities) to be
downgraded by any nationally recognized statistical rating organization, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Capital Securities)
in any material respect, (v) such successor entity has a purpose substantially
identical to that of the Issuer Trust, (vi) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Issuer Trustee has
received an Opinion of Counsel from independent counsel experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights
preferences and privileges of the holders of the Capital Securities (including
any Successor Capital Securities) in any material respect, and (b) following
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither the Issuer Trust nor such successor entity will be required to
register as an "investment company" under the Investment Company Act and (vii)
the Depositor or any permitted transferee to whom it has transferred the Common
Securities hereunder owns all of the Common Securities of such successor entity
and guarantees the obligations of such successor entity under the Successor
Capital Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Issuer Trust shall not, except with the
consent of holders of 100% in Liquidation Amount of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer Trust or the successor
entity to be taxable as a corporation for United States Federal income tax
purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 LIMITATION OF RIGHTS OF HOLDERS.
Except as set forth in Section 9.2, the death or incapacity of any
person having an interest, beneficial or otherwise, in Trust Securities shall
not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such person or any Holder for such person, to claim
an accounting, take any action or bring any proceeding in any court for a
partition or winding-up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them. Any merger or similar agreement shall be executed by the Administrators on
behalf of the Trust.
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SECTION 10.2 AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee and the Holders of a Majority in Liquidation Amount of the
Common Securities, without the consent of any Holder of the Capital Securities
(i) to cure any ambiguity, correct or supplement any provision herein which may
be inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement,
provided, however, that such amendment shall not adversely affect in any
material respect the interests of any Holder or (ii) to modify, eliminate or add
to any provisions of this Trust Agreement to such extent as shall be necessary
to ensure that the Issuer Trust will not be taxable as a corporation for United
States Federal income tax purposes at any time that any Trust Securities are
Outstanding or to ensure that the Issuer Trust will not be required to register
as an investment company under the Investment Company Act.
(b) Except as provided in Section 10.2(c) hereof, any provision of
this Trust Agreement may be amended by the Property Trustee and the Holders of a
Majority in Liquidation Amount of the Common Securities with (i) the consent of
Holders of at least a Majority in Liquidation Amount of the Capital Securities
and (ii) receipt by the Issuer Trustees of an Opinion of Counsel to the effect
that such amendment or the exercise of any power granted to the Issuer Trustees
in accordance with such amendment will not affect the Issuer Trust's not being
taxable as a corporation for United States federal income tax purposes or the
Issuer 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 Holder (such consent being
obtained in accordance with Section 6.3 or 6.6 hereof), this Trust Agreement may
not be amended to (i) change the amount or timing of any Distribution on the
Trust Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a specified date or
(ii) restrict the right of a Holder to institute suit for the enforcement of any
such payment on or after such date.
(d) Notwithstanding any other provisions of this Trust Agreement,
no Issuer Trustee shall enter into or consent to any amendment to this Trust
Agreement which would cause the Issuer Trust to fail or cease to qualify for the
exemption from status as an "investment company" under the Investment Company
Act or be taxable as a corporation for United States Federal income tax
purposes.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor and the Administrators, this
Trust Agreement may not be amended in a manner which imposes any additional
obligation on the Depositor or the Administrators.
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(f) In the event that any amendment to this Trust Agreement is
made, the Administrators or the Property Trustee shall promptly provide to the
Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
(h) Any amendments to this Trust Agreement shall become effective
when notice of such amendment is given to the holders of the Trust Securities.
SECTION 10.3 SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 10.4 GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE ISSUER TRUST, THE DEPOSITOR, THE ISSUER TRUSTEES AND THE
ADMINISTRATORS SHALL GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR
ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER, THAT THERE
SHALL NOT BE APPLICABLE TO THE HOLDERS, THE ISSUER TRUST, THE DEPOSITOR, THE
ISSUER TRUSTEES, THE ADMINISTRATORS OR THIS TRUST AGREEMENT ANY PROVISION OF THE
LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS OTHER
THAN THE DELAWARE BUSINESS TRUST ACT THAT RELATE TO OR REGULATE, IN A MANNER
INCONSISTENT WITH THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR GOVERNMENTAL
BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES, (B)
AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS, AGENTS OR
EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER
GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL
OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF
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<PAGE> 69
RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR
LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST
INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF
HOLDING OR INVESTING TRUST ASSETS OR (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER
STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES
THAT ARE INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR AUTHORITIES AND
POWERS OF THE ISSUER TRUSTEES OR THE ADMINISTRATOR AS SET FORTH OR REFERENCED IN
THIS TRUST AGREEMENT. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT
APPLY TO THE ISSUER TRUST.
SECTION 10.5 PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a
day that is not a Business Day, then such payment need not be made on such date
but may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.2(d)), with the same force and effect as though
made on the date fixed for such payment, and no Distributions shall accumulate
on such unpaid amount for the period after such date.
SECTION 10.6 SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Issuer Trust, the Administrators
and any Issuer Trustee, including any successor by operation of law. Except in
connection with a consolidation, merger or sale involving the Depositor that is
permitted under Article VIII of the Indenture and pursuant to which the assignee
agrees in writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.
SECTION 10.7 HEADINGS.
The Article and Section headings are for convenience only and shall
not affect the construction of this Trust Agreement.
SECTION 10.8 REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Holder or the Depositor may be given or served in writing by
deposit thereof, first class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Holder of Capital Securities, to such Holder as such Holder's name and address
may appear on the Securities Register; and (b) in the case of the Holder of
Common Securities or the Depositor, to Triangle Bancorp, Inc., 4300 Glenwood
Avenue, Raleigh, North Carolina 27612, Attention:
64
<PAGE> 70
Alexander M. Donaldson, Esq., facsimile no.: (919) 781-6042 or to such other
address as may be specified in a written notice by the Depositor to the Property
Trustee. Such notice, demand or other communication to or upon a Holder shall be
deemed to have been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission. Such notice, demand or other communication to
or upon the Depositor shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Depositor.
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 Issuer Trust, the Property Trustee, the Delaware Trustee, the
Administrators, or the Issuer Trust shall be given in writing addressed (until
another address is published by the Issuer Trust) as follows: (a) with respect
to the Property Trustee to Bankers Trust Company, Four Albany Street, 4th Floor,
New York, NY 10006, Attention: Corporate Trust and Agency Group Corporate Market
Services; (b) with respect to the Delaware Trustee to Bankers Trust (Delaware),
1001 Jefferson Street, Suite 550, Wilmington, Delaware 19801, Attention: Lisa
Wilkins; and (c) with respect to the Administrators, to them at the address
above for notices to the Depositor, marked "Attention: Office of the Secretary".
Such notice, demand or other communication to or upon the Issuer Trust or the
Property Trustee shall be deemed to have been sufficiently given or made only
upon actual receipt of the writing by the Issuer Trust, the Property Trustee, or
such Administrator.
SECTION 10.9 AGREEMENT NOT TO PETITION.
Each of the Issuer Trustees, the Administrators and the Depositor
agree for the benefit of the Holders that, until at least one year and one day
after the Issuer Trust has been terminated in accordance with Article IX, they
shall not file, or join in the filing of, a petition against the Issuer Trust
under any bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Issuer Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.9, the Property Trustee
agrees, for the benefit of Holders, that at the expense of the Depositor, it
shall file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by the Depositor against the Issuer Trust or the
commencement of such action and raise the defense that the Depositor has agreed
in writing not to take such action and should be estopped and precluded
therefrom and such other defenses, if any, as counsel for the Issuer Trustee or
the Issuer Trust may assert. If any Issuer Trustee or Administrator takes action
in violation of this Section 10.9, the Depositor agrees, for the benefit of the
Holders, that at the expense of the Depositor, it shall file an answer with the
bankruptcy court or otherwise properly contest the filing of such petition by
such Person against the Depositor or the commencement of such action and raise
the defense that such Person has agreed in writing not to take such action and
should be estopped and precluded therefrom and such other defenses, if any, as
counsel for the Issuer Trustee or the Issuer Trust may assert. The provisions of
this Section 10.9 shall survive the termination of this Trust Agreement.
65
<PAGE> 71
SECTION 10.10 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) Trust Indenture Act; Application. (i) This Trust Agreement is
subject to the provisions of the Trust Indenture Act that are required to be a
part of this Trust Agreement and shall, to the extent applicable, be governed by
such provisions; (ii) if and to the extent that any provision of this Trust
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control; (iii) for purposes of this Trust Agreement, the Property Trustee, to
the extent permitted by applicable law and/or the rules and regulations of the
Commission, shall be the only Issuer Trustee which is a trustee for the purposes
of the Trust Indenture Act; and (iv) the application of the Trust Indenture Act
to this Trust Agreement shall not affect the nature of the Preferred Securities
and the Common Securities as equity securities representing undivided beneficial
interests in the assets of the Issuer Trust.
(b) Lists of Holders of Preferred Securities. (i) Each of the
Depositor and the Administrators on behalf of the Trust shall provide the
Property Trustee with such information as is required under Section 312(a) of
the Trust Indenture Act at the times and in the manner provided in Section
312(a) and (ii) the Property Trustee shall comply with its obligations under
Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
(c) Reports by the Property Trustee. Within 60 days after May 15 of
each year, the Property Trustee shall provide to the Holders of the Trust
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form, in the manner and at the times provided by Section 313
of the Trust Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
(d) Periodic Reports to Property Trustee. Each of the Depositor and
the Administrators on behalf of the Issuer Trust shall provide to the Property
Trustee, the Commission and the Holders of the Trust Securities, as applicable,
such documents, reports and information as required by Section 315(a)(1) - (3)
(if any) of the Trust Indenture Act and the compliance certificates required by
Section 314(a)(4) and (c) of the Trust Indenture Act (provided that any
certificate to be provided pursuant to Section 314(a)(4) of the Trust Indenture
Act shall be provided within 120 days of the end of each fiscal year of the
Issuer Trust.
(e) Evidence of Compliance with Conditions Precedent. Each of the
Depositor and the Administrators on behalf of the Issuer Trust shall provide to
the Property Trustee such evidence of compliance with any conditions precedent,
if any, provided for in this Trust Agreement which relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given pursuant to Section 314(c) shall comply with
Section 314(e) of the Trust Indenture Act.
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<PAGE> 72
(f) Disclosure Information. The disclosure of information as to the
names and addresses of the Holders of Trust Securities in accordance with
Section 312 of the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any existing
law or any law hereafter enacted which does not specifically refer to Section
312 of the Trust Indenture Act, nor shall the Property Trustee be held
accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act.
SECTION 10.11 ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH
TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE
GUARANTEE AND THE INDENTURE, AND THE AGREEMENT TO THE SUBORDINATION PROVISIONS
AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS.
* * * *
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed, all as of the day and year first above written.
67
<PAGE> 73
TRIANGLE BANCORP, INC.
as Depositor
By:
-------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Property Trustee, and not in its
individual capacity
By:
-------------------
Name:
Title:
BANKERS TRUST (DELAWARE),
as Delaware Trustee, and not
in its individual capacity
By:
-------------------
Name:
Title:
Agreed to and Accepted by,
- - -----------------------------
Name: Debra L. Lee
Title: Administrator
- - -----------------------------
Name: Alexander M. Donaldson
Title: Administrator
68
<PAGE> 74
EXHIBIT A
[INSERT CERTIFICATE OF TRUST FILED WITH DELAWARE]
- 1 -
<PAGE> 75
EXHIBIT B
[INSERT FORM OF CERTIFICATE DEPOSITARY AGREEMENT]
- 1 -
<PAGE> 76
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE
DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR
IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.11 OF THE TRUST AGREEMENT
Certificate Number Number of Common Securities
C-__
Certificate Evidencing Common Securities
of
Triangle Capital Trust
_____% Common Securities
(liquidation amount $1,000 per Common Security)
Triangle Capital Trust, a statutory business trust formed under the
laws of the State of Delaware (the "Issuer Trust"), hereby certifies that
Triangle Bancorp, Inc. (the "Holder") is the registered owner of ____________
(________) common securities of the Issuer Trust representing undivided
beneficial interests in the assets of the Issuer Trust and has designated the
____% Common Securities (liquidation amount $1,000 per Common Security) (the
"Common Securities"). Except in accordance with Section 5.11 of the Trust
Agreement (as defined below) the Common Securities are not transferable and any
attempted transfer hereof other than in accordance therewith shall be void. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Trust Agreement
of the Issuer Trust, dated as of June __, 1997, as the same may be amended from
time to time (the "Trust Agreement") among Triangle Bancorp, Inc., as Depositor,
Bankers Trust Company, as Property Trustee, Bankers Trust (Delaware), as
Delaware Trustee, and the Holders of Trust Securities, including the designation
of the terms of the Common Securities as set forth therein. The Issuer Trust
will furnish a copy of the Trust Agreement to the Holder without charge upon
written request to the Issuer Trust at its principal place of business or
registered office.
- 1 -
<PAGE> 77
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
Terms used but not defined herein have the meanings set forth in
the Trust Agreement.
IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust
has executed this certificate this ___ day of _______, ____.
TRIANGLE CAPITAL TRUST
By: ______________________________
Name:
Administrator
COUNTERSIGNED AND REGISTERED:
BANKERS TRUST COMPANY,
as Securities Registrar
By: ________________________
Name:
Authorized Signatory
- 2 -
<PAGE> 78
EXHIBIT D
[IF THE CAPITAL SECURITIES CERTIFICATE IS TO BE A GLOBAL CAPITAL
SECURITIES CERTIFICATE, INSERT -- This Capital Securities Certificate is a
Global Capital Securities Certificate within the meaning of the Trust Agreement
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Capital Securities Certificate is exchangeable for
Capital Securities Certificates registered in the name of a person other than
the Depositary or its nominee only in the limited circumstances described in the
Trust Agreement and may not be transferred except as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary, except in the limited
circumstances described in the Trust Agreement.
Unless this Capital Securities Certificate is presented by an
authorized representative of The Depository Trust Company, a New York
Corporation ("DTC"), to Triangle Capital Trust or its agent for registration of
transfer, exchange or payment, and any Capital Securities Certificate issued is
registered in the name of such nominee as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such entity
as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL inasmuch
as the registered owner hereof, has an interest herein.]
THE CAPITAL SECURITIES EVIDENCED HEREBY AND ANY JUNIOR SUBORDINATED
DEBENTURES ISSUABLE IN CONNECTION THEREWITH HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A) BY
THE INITIAL PURCHASER, (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, OR (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) BY
SUBSEQUENT PURCHASERS AS SET FORTH IN (A) ABOVE AND, IN ADDITION, TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES. THE HOLDER OF THIS CAPITAL
SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT THE HOLDER WILL, AND EACH
SUBSEQUENT
- 1 -
<PAGE> 79
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS CAPITAL SECURITY FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO ABOVE. NO REPRESENTATION CAN BE MADE AS TO
THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALES OF THE
CAPITAL SECURITIES OR ANY JUNIOR SUBORDINATED DEBENTURES DISTRIBUTABLE TO
HOLDERS OF THE CAPITAL SECURITIES.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY
IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL
SECURITIES). ANY SUCH TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO
THE RECEIPT OF DISTRIBUTIONS OF SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN OR INDIVIDUAL RETIREMENT ACCOUNT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") (EACH, A "PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE
"PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET
ENTITY"), AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD
THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE
OR HOLDING IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY U.S. DEPARTMENT OF
LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1
OR 84-14 OR ANOTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES CERTIFICATE OR ANY
INTEREST HEREIN THAT IS A PLAN OR A PLAN ASSET ENTITY OR IS PURCHASING SUCH
SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING HEREOF THAT (A) THE PURCHASE AND HOLDING OF THE
CAPITAL SECURITIES IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY PTCE 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION, (B) THE COMPANY AND
THE ADMINISTRATORS ARE NOT "FIDUCIARIES" WITHIN THE MEANING OF SECTION 3(21) OF
ERISA AND THE REGULATIONS THEREUNDER, WITH RESPECT TO SUCH PERSON'S INTEREST IN
THE CAPITAL SECURITIES OR THE JUNIOR SUBORDINATED DEBENTURES, AND (C) IN
PURCHASING THE CAPITAL SECURITIES SUCH PERSON APPROVES THE PURCHASE OF THE
JUNIOR SUBORDINATED DEBENTURES AND THE APPOINTMENT OF THE ISSUER TRUSTEES.
- 2 -
<PAGE> 80
CERTIFICATE NUMBER AGGREGATE LIQUIDATION AMOUNT
P-__ ___________________ ( CAPITAL SECURITIES)
CUSIP NO. 895849 AA 5
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
TRIANGLE CAPITAL TRUST
9.375% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Triangle Capital Trust, a statutory business trust formed under the
laws of the State of Delaware (the "Issuer Trust"), hereby certifies that
___________________ ___________________(the "Holder") is the registered owner of
_____________ Dollars ($________ ) aggregate liquidation amount of capital
securities of the Trust representing a preferred undivided beneficial interest
in the assets of the Issuer Trust and has designated the Triangle Capital Trust
9.375% Capital Securities (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). The Capital Securities are transferable on the books and
records of the Issuer Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.5 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities are set forth in, and this certificate and
the Capital Securities represented hereby are issued and shall in all respects
be subject to the terms and provisions of, the Amended and Restated Trust
Agreement of the Issuer Trust, dated as of June 3, 1997, as the same may be
amended from time to time (the "Trust Agreement"), among Triangle Bancorp, Inc.,
as Depositor, Bankers Trust Company, as Property Trustee, Bankers Trust
(Delaware), as Delaware Trustee, and the Holders of Trust Securities, including
the designation of the terms of the Capital Securities as set forth therein. The
Holder is entitled to the benefits of the Guarantee Agreement entered into by
Triangle Bancorp, Inc., a North Carolina corporation, and Bankers Trust Company,
as Guarantee Trustee, dated as of June 3, 1997 (the "Guarantee Agreement"), to
the extent provided therein. The Issuer Trust will furnish a copy of the Trust
Agreement and the Guarantee Agreement to the Holder without charge upon written
request to the Issuer Trust at its principal place of business or registered
office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
- 3 -
<PAGE> 81
Terms used but not defined herein have the meanings set forth in
the Trust Agreement.
IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust
has executed this certificate this ______ day of __________, _______.
TRIANGLE CAPITAL TRUST
By:_________________________________
Name:
Administrator
COUNTERSIGNED AND REGISTERED:
BANKERS TRUST COMPANY,
as Securities Registrar
By: ________________________
Name:
Authorized Signatory
- 4 -
<PAGE> 82
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security to:
- - --------------------------------------------------------------------------------
(Insert assignee's social security or tax
identification number)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------
- - --------------------------------------------------------------------------------
agent to transfer this Capital Securities Certificate on the books of the Issuer
Trust. The agent may substitute another to act for him or her.
Date: __________________
Signature: __________________________________
(Sign exactly as your name appears
on the other side of this Capital
Securities Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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<PAGE> 83
EXHIBIT E
[Form of Restricted Securities Certificate]
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to ss. 5.5(b)
of the Trust Agreement)
[ ],
--------------------------
as Security Registrar
[address]
Re: 9.375% Capital Securities of
Triangle Capital Trust (the "Trust")
(the "Capital Securities")
Reference is made to the Amended and Restated Trust Agreement,
dated as of June 3, 1997 (the "Trust Agreement"), among Triangle Bancorp, Inc.,
as Depositor, Bankers Trust Company, as Property Trustee and Bankers Trust
(Delaware), as Delaware Trustee, and the Holders (as defined therein) from time
to time. Terms used herein and defined in the Trust Agreement or in Regulation
D, Rule 144A or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to $__________ aggregate Liquidation
Amount of Capital Securities, which are evidenced by the following
certificate(s) (the "Specified Securities"):
CUSIP No(s).____________________________
CERTIFICATE No(s).______________________
CURRENTLY IN BOOK-ENTRY FORM: __ Yes __ No (check one)
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the Specified Securities are represented by a Book-Entry Capital Securities
Certificate, they are held through the Clearing Agency or a Clearing Agency
Participant in the name of the Undersigned, as or on behalf of the Owner. If the
Specified Securities are not represented by a Book-Entry Capital Securities
Certificate, they are registered in the name of the Undersigned, as or on behalf
of the Owner.
<PAGE> 84
The Owner has requested that the Specified Securities be
transferred to a person (the "Transferee") who will take delivery in the form of
a Restricted Capital Security. In connection with such transfer, the Owner
hereby certifies that, unless such transfer is being effected pursuant to an
effective registration statement under the Securities Act, it is being effected
in accordance with Rule 144A, Rule 904 or Rule 144 under the Securities Act and
all applicable securities laws of the states of the United States and other
jurisdictions.
Accordingly, the Owner hereby further certifies as:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a
person that the Owner and any person acting on its behalf
reasonably believe is a "qualified institutional buyer" within the
meaning of Rule 144A, acquiring for its own account or for the
account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have
taken reasonable steps to ensure that the Transferee is aware that
the Owner may be relying on Rule 144A in connection with the
transfer; and
(2) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities,
an affiliate of the Depositor or the Trust or any such
distributor or a person acting on behalf of any of the
foregoing;
(B) the offer of the Specified Securities was not
made to a person in the United States;
(C) either:
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner and
any person acting on its behalf reasonably believed that
the Transferee was outside the United States, or
(ii) the transaction is being executed in, on or
through the facilities of the Eurobond market, as
regulated by the Association of International Bond
Dealers, or another designated offshore securities market
and neither the Owner nor any person acting on its behalf
knows that the transaction has been prearranged with a
buyer in the United States;
8
<PAGE> 85
(D) no directed selling efforts within the meaning
of Rule 902 of Regulation S have been made in the United
States by or on behalf of the Owner or any affiliate
thereof; and
(E) the transaction is not part of a plan or
scheme to evade the registration requirements of the
Securities Act.
(3) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after a holding period of at
least two years (computed in accordance with paragraph (d) of Rule
144 or such shorter time as may be provided therein) has elapsed
since the date the Specified Securities were acquired from the
Depositor or the Trust or from an affiliate (as such term is
defined in Rule 144) of the Depositor or the Trust, whichever is
later, and is being effected in accordance with the applicable
amount, manner of sale and notice requirements of paragraphs (e),
(f) and (h) of Rule 144;
(B) the transfer is occurring after a holding period of at
least three years (or such shorter time as may be provided in Rule
144(k) has elapsed since the date the Specified Securities were
acquired from the Depositor or the Trust or from an affiliate (as
such term is defined in Rule 144) of the Depositor or the Trust,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Depositor or the
Trust; or
(C) the Owner is a "qualified institutional buyer" within
the meaning of Rule 144A, and is transferring the Securities to an
institution that is an "accredit investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act in a transaction exempt from the registration
requirements of the Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Depositor, the Trust and the Initial
Purchaser.
Dated: _____________________________________
(Print the name of the
Undersigned, as such term is
defined in the second paragraph of
this certificate.)
By: __________________________________
Name:
Title:
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the person
signing on behalf of the
Undersigned must be stated.)
9
<PAGE> 1
EXHIBIT 4.3
===============================================================================
GUARANTEE AGREEMENT
Between
TRIANGLE BANCORP, INC.
(as Guarantor)
and
BANKERS TRUST COMPANY
(as Guarantee Trustee)
dated as of
October ____, 1997
===============================================================================
<PAGE> 2
TRIANGLE CAPITAL TRUST
Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Guarantee Agreement
Act Section
- - --------------- -------------------
<S> <C> <C>
Section 310 (a) (1)..................................................... 4.1 (a)
(a) (2)..................................................... 4.1 (a)
(a) (3)..................................................... Not Applicable
(a) (4)..................................................... Not Applicable
(b)......................................................... 2.8, 4.1 (c)
Section 311 (a)......................................................... Not Applicable
(b)......................................................... Not Applicable
Section 312 (a)......................................................... 2.2 (a)
(b)......................................................... 2.2 (b)
(c) ........................................................ Not Applicable
Section 313 (a)......................................................... 2.3
(a) (4)..................................................... 2.3
(b)......................................................... 2.3
(c)......................................................... 2.3
(d)......................................................... 2.3
Section 314 (a)......................................................... 2.4
(b)......................................................... 2.4
(c) (1)..................................................... 2.5
(c) (2)..................................................... 2.5
(c) (3)..................................................... 2.5
(e)......................................................... 1.1, 2.5, 3.2
Section 315 (a)......................................................... 3.1 (d)
(b)......................................................... 2.7
(c)......................................................... 3.1 (c)
(d)......................................................... 3.1 (d)
(e)......................................................... Not Applicable
Section 316 (a)......................................................... 1.1, 2.6, 5.4
(a) (1) (A)................................................. 5.4
(a) (1) (B)................................................. 5.4
(a) (2)..................................................... Not Applicable
(b)......................................................... 5.3
(c)......................................................... Not Applicable
Section 317 (a) (1)..................................................... Not Applicable
(a) (2)..................................................... Not Applicable
(b)......................................................... Not Applicable
Section 318 (a)......................................................... 2.1
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Guarantee Agreement.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I. DEFINITIONS 2
SECTION 1.1. Definitions..........................................................................................2
ARTICLE II. TRUST INDENTURE ACT 5
SECTION 2.1. Trust Indenture Act; Application.....................................................................5
SECTION 2.2. List of Holders......................................................................................5
SECTION 2.3. Reports by the Guarantee Trustee.....................................................................6
SECTION 2.4. Periodic Reports to the Guarantee Trustee............................................................6
SECTION 2.5. Evidence of Compliance with Conditions Precedent.....................................................6
SECTION 2.6. Events of Default; Waiver............................................................................6
SECTION 2.7. Event of Default; Notice.............................................................................6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE 7
SECTION 3.1. Powers and Duties of the Guarantee Trustee...........................................................7
SECTION 3.2. Certain Rights of Guarantee Trustee..................................................................8
SECTION 3.3. Indemnity ..........................................................................................10
SECTION 3.4. Expenses ...........................................................................................10
ARTICLE IV. GUARANTEE TRUSTEE 10
SECTION 4.1. Guarantee Trustee; Eligibility......................................................................10
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.......................................11
ARTICLE V. GUARANTEE 12
SECTION 5.1. Guarantee...... ....................................................................................12
SECTION 5.2. Waiver of Notice and Demand.........................................................................12
SECTION 5.3. Obligations Not Affected............................................................................12
SECTION 5.4. Rights of Holders...................................................................................13
SECTION 5.5. Guarantee of Payment................................................................................13
SECTION 5.6. Subrogation.... ....................................................................................13
ARTICLE VI. COVENANTS AND SUBORDINATION 14
SECTION 6.1. Subordination.. ....................................................................................14
SECTION 6.2. Pari Passu Guarantees...............................................................................14
ARTICLE VII. TERMINATION 14
SECTION 7.1. Termination.... ....................................................................................14
ARTICLE VIII. MISCELLANEOUS 15
SECTION 8.1. Successors and Assigns..............................................................................15
SECTION 8.2. Amendments..........................................................................................15
SECTION 8.3. Notices ............................................................................................15
SECTION 8.4. Benefit ............................................................................................16
SECTION 8.5. Interpretation .....................................................................................16
SECTION 8.6. Governing Law ......................................................................................17
SECTION 8.7. Counterparts .......................................................................................17
</TABLE>
i
<PAGE> 4
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of October ___, 1997 is
executed and delivered by TRIANGLE BANCORP, INC., a North Carolina corporation
(the "Guarantor") having its principal office at 4300 Glenwood Avenue, Raleigh,
North Carolina 27612, and BANKERS TRUST COMPANY, a New York banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of Triangle Capital Trust, a Delaware statutory business trust
(the "Issuer Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of June 3, 1997, among Triangle Bancorp,
Inc., as Depositor, Bankers Trust Company, as Property Trustee (the "Property
Trustee"), Bankers Trust (Delaware), as Delaware Trustee (the "Delaware
Trustee") (collectively, the "Issuer Trustees") and the Holders from time to
time of preferred undivided beneficial ownership interests in the assets of the
Issuer Trust, the Issuer Trust issued $20,000,000 aggregate Liquidation Amount
(as defined herein) of its 9.375% Capital Securities, Liquidation Amount $1,000
per capital security (the "Old Capital Securities"), representing preferred
undivided beneficial ownership interests in the assets of the Issuer Trust and
having the terms set forth in the Trust Agreement;
WHEREAS, the Old Capital Securities issued by the Issuer
Trust and the proceeds thereof, together with the proceeds from the issuance of
the Issuer Trust's Common Securities (as defined herein), were used to purchase
the Junior Subordinated Debentures due June 1, 2027 (the "Old Junior
Subordinated Debentures") of the Guarantor which were deposited with Bankers
Trust Company, as Property Trustee under the Trust Agreement, as trust assets;
and
WHEREAS, as incentive for the Holders to purchase the Old
Capital Securities, the Guarantor irrevocably and unconditionally agreed, to
the extent set forth in the Guarantee Agreement dated as of June 3, 1997 (the
"Old Guarantee"), to pay to the Holders of the Old Capital Securities the
Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein; and
WHEREAS, in connection with the offer of the Old Capital
Securities, the Guarantor, the Issuer Trust and Wheat, First Securities, Inc.
executed the Registration Rights Agreement dated June 3, 1997 (the
"Registration Rights Agreement").
WHEREAS, the Issuer Trust, in order to satisfy its
obligations under the Registration Rights Agreement, intends to offer (the
"Exchange Offer") up to $20,000,000 aggregate liquidation amount of its 9.375%
Capital Securities which have been registered under the Securities Act of 1933
pursuant to a registration statement (the "New Capital Securities") in exchange
for a like liquidation amount of Old Capital Securities; and
<PAGE> 5
WHEREAS, pursuant to the Exchange Offer, the Guarantor is
also exchanging $20,000,000 aggregate principal amount of the Old Junior
Subordinated Debentures for $20,000,000 aggregate principal amount of the New
Junior Subordinated Debentures due June 1, 2027 (the "New Junior Subordinated
Debentures") of the Guarantor; and
WHEREAS, pursuant to the Exchange Offer, the Guarantor is
required to execute this Guarantee Agreement and exchange the Old Guarantee for
this Guarantee Agreement.
NOW, THEREFORE, in consideration of the exchange by each
Holder of the Old Capital Securities for the New Capital Securities, which
exchange the Guarantor hereby acknowledges shall benefit the Guarantor, (or in
the event certain Holders do not exchange their Old Capital Securities, in
order to fulfill its obligations to such Holders under the Old Guarantee) and
intending to be legally bound hereby, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time of the
Capital Securities (as defined herein).
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth
below shall, unless the context otherwise requires, have the following
meanings. Capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Trust Agreement as in effect on the
date hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Capital Securities" means both the New Capital Securities
and the Old Capital Securities.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer Trust.
"Distributions" means preferential cumulative cash
distributions accumulating from June 3, 1997 and payable semiannually in
arrears on June 1 and December 1 of each year, commencing December 1, 1997, at
an annual rate of 9.375% of the Liquidation Amount.
"Event of Default" means (i) a default by the Guarantor in
any of its payment obligations under this Guarantee Agreement, or (ii) a
default by the Guarantor in any other obligation hereunder that remains
unremedied for 30 days.
2
<PAGE> 6
"Guarantee Agreement" means this Guarantee Agreement, as
modified, amended or supplemented from time to time.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by or on behalf of the Issuer Trust: (i) any
accumulated and unpaid Distributions (as defined in the Trust Agreement)
required to be paid on the Capital Securities, to the extent the Issuer Trust
shall have funds on hand available therefor at such time, (ii) the Redemption
Price, with respect to the Capital Securities called for redemption by the
Issuer Trust to the extent that the Issuer Trust shall have funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
termination, winding-up or liquidation of the Issuer Trust, unless the New
Junior Subordinated Debentures are distributed to the Holders, the lesser of
(a) the aggregate of the Liquidation Amount and all accumulated and unpaid
Distributions to the date of payment to the extent the Issuer Trust shall have
funds on hand available to make such payment at such time and (b) the amount of
assets of the Issuer Trust remaining available for distribution to Holders on
liquidation of the issuer Trust (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means Bankers Trust Company, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first
paragraph of this Guarantee Agreement.
"Holder" means any holder, as registered on the books and
records of the Issuer Trust, of any Capital Securities; provided, however,
that, in determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor, the Guarantee Trustee, or any
Affiliate of the Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of June 3, 1997, between Triangle Bancorp, Inc. and Bankers Trust Company, as
trustee, as may be modified, amended or supplemented from time to time.
"Issuer Trust" shall have the meaning specified in the first
paragraph of this Guarantee Agreement.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of New Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
New Junior Subordinated Debentures to Holders of Trust Securities in connection
with a dissolution or liquidation of the Issuer Trust, New Junior Subordinated
Debentures having a principal amount
3
<PAGE> 7
equal to the Liquidation Amount of the Trust Securities of the Holder to whom
such New Junior Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per
Capital Security.
"Majority in Liquidation Amount of the Capital Securities"
means, except as provided by the Trust Indenture Act, Capital Securities
representing more than 50% of the aggregate Liquidation Amount of all then
outstanding Capital Securities issued by the Issuer Trust.
"Officers' Certificate" means a certificate signed by the
Chief Executive Officer, President, Executive Vice President or a Senior Vice
President or Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee
Agreement shall include:
(a) a statement by each officer signing the Officers'
Certificate that such officer has read the covenant or condition and
the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in rendering the
Officers' Certificate;
(c) a statement that such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of 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.
"Redemption Date" means, with respect to any Capital Security
to be redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each New Junior Subordinated Debenture Redemption Date
and the stated maturity of the New Junior Subordinated Debentures shall be a
Redemption Date for a Like Amount of Capital Securities.
"Redemption Price" shall have the meaning specified in the
Trust Agreement.
"Responsible Officer" means, when used with respect to the
Guarantee Trustee, any officer assigned to the Corporate Trust Office,
including any managing director, vice president, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Guarantee
Trustee customarily performing functions similar to those performed by any of
the
4
<PAGE> 8
above designated officers and having direct responsibility for the
administration of this Indenture, and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Senior Indebtedness" shall have the meaning specified in the
Indenture.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.1.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated June 3, 1997, executed by Triangle Bancorp, Inc., as
Depositor, Bankers Trust (Delaware), as Delaware Trustee, and Bankers Trust
Company, as Property Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C.ss.ss.77aaa-77bbbb), as amended.
"Trust Securities" means the Common Securities and the
Capital Securities.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Guarantee Agreement, the provision of the Trust
Indenture Act shall control. If any provision of this Guarantee Agreement
modifies or excludes any provision of the Trust Indenture Act that may be so
modified or excluded, the latter provision shall be deemed to apply to this
Guarantee Agreement as so modified or excluded, as the case may be.
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee a list of Holders at the following times:
(i) semiannually, not more than 15 days after May 15 and
November 15 in each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders as of May 15 and
November 15; and
(ii) at such other times as the Guarantee Trustee may request
in writing, within 30 days after the receipt by the Guarantor of any such
request, a list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished.
(b) The Guarantee Trustee shall comply with the requirements of
Section 312(b) of the Trust Indenture Act.
5
<PAGE> 9
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than January 31 of each year, commencing January
31, 1998, the Guarantee Trustee shall provide to the Holders such reports, if
any, as are required by Section 313 of the Trust Indenture Act in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act. If this Guarantee Agreement shall have been qualified under the
Trust Indenture Act, the Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act, provided that such
documents, reports and information shall be required to be provided to the
Securities and Exchange Commission only if this Guarantee Agreement shall have
been qualified under the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with such conditions precedent, if any, provided for in
this Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of
an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the
Capital Securities may, by vote, on behalf of the Holders, waive any past Event
of Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notice of all Events of Default known to the Guarantee
Trustee, unless such Events of Default have been cured before the giving of
such notice; provided that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the Board of Directors, the executive committee or a
trust committee of directors
6
<PAGE> 10
and/or Responsible officers of the Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer charged with the
administration of this Guarantee Agreement shall have received written notice
of such Event of Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising his
or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee
on acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee hereunder. The right, title and interest of the
Guarantee Trustee, as such, hereunder shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing,
the Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of
the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall be obligated to perform only such duties as are specifically
set forth in this Guarantee Agreement (including pursuant to Section 2.1), and
no implied covenants shall be read into this Guarantee Agreement against the
Guarantee Trustee. If an Event of Default has occurred (that has not been cured
or waived pursuant to Section 2.6), the Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Guarantee Agreement, and use the
same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
7
<PAGE> 11
(i) Prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions of this Guarantee
Agreement (including pursuant to Section 2.1), and the Guarantee Trustee shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement (including pursuant to
Section 2.1); and
(B) in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision hereof or of the Trust
Indenture Act are specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Guarantee
Agreement;
(ii) The Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) The Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
Liquidation Amount of the Capital Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and
(iv) No provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably assured to
it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely
and shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
8
<PAGE> 12
evidence of indebtedness or other paper or document reasonably believed by it
to be genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and conclusively rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with
legal counsel, and the advice or written opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by
it hereunder in good faith and in accordance with such advice or opinion. Such
legal counsel may be legal counsel to the Guarantor or any of its Affiliates
and may be one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such security and indemnity
as would satisfy a reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee.
(vi) The Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit.
(vii) The Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly
or by or through its agents or attorneys, and the Guarantee Trustee shall not
be responsible for any negligence or wilful misconduct on the part of any such
agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request
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<PAGE> 13
instructions from the Holders, (B) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received and (C)
shall be fully protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be
deemed to impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any Jurisdiction in which it shall be illegal, or in which the
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Guarantee Trustee shall be construed to be a duty to act in accordance with
such power and authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence, wilful misconduct or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the 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. The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payments as a
result of any amount due to it under this Guarantee Agreement.
SECTION 3.4. Expenses.
The Guarantor shall from time to time reimburse the Guarantee
Trustee for its expenses and costs (including reasonable attorneys' or agents'
fees) incurred in connection with the performance of its duties hereunder.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to
the Trust Indenture Act to act as such and has a combined capital and surplus
of at least $50,000,000, and shall be a corporation meeting the requirements of
Section 310(c) of the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority, then, for the purposes of this
Section and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
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<PAGE> 14
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2.
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee.
(a) No resignation or removal of the Guarantee Trustee and no
appointment of a Successor Guarantee Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the Successor Guarantee
Trustee by written instrument executed by the Successor Guarantee Trustee and
delivered to the Holders and the Guarantee Trustee.
(b) Subject to the immediately preceding paragraph, a
Guarantee Trustee may resign at any time by giving written notice thereof to
the Holders. The Guarantee Trustee shall appoint a successor by requesting from
at least three Persons meeting the eligibility requirements such Person's
expenses and charges to serve as the Guarantee Trustee, and selecting the
Person who agrees to the lowest expenses and charges. If the instrument of
acceptance by the Successor Guarantee Trustee shall not have been delivered to
the Guarantee Trustee within 60 days after the giving of such notice of
resignation, the Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for the appointment of a
Successor Guarantee Trustee.
(c) The Guarantee Trustee may be removed for cause at any
time by Act (within the meaning of Section 6.8 of the Trust Agreement) of the
Holders of at least a Majority in Liquidation Amount of the Capital Securities,
delivered to the Guarantee Trustee.
(d) If a resigning Guarantee Trustee shall fail to appoint a
successor, or if a Guarantee Trustee shall be removed or become incapable of
acting as Guarantee Trustee, or if any vacancy shall occur in the office of any
Guarantee Trustee for any cause, the Holders of the Capital Securities, by Act
of the Holders of record of not less than 25% in aggregate Liquidation Amount
of the Capital Securities then outstanding delivered to such Guarantee Trustee,
shall promptly appoint a successor Guarantee Trustee. If no Successor Guarantee
Trustee shall have been so appointed by the Holders of the Capital Securities
and such appointment accepted by the Successor Guarantee Trustee, any Holder,
on behalf of himself and all others similarly situated, may petition any court
of competent jurisdiction for the appointment of a Successor Guarantee Trustee.
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<PAGE> 15
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 or on behalf of the Issuer Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer
Trust may have or assert, except the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holders or by causing the Issuer
Trust to pay such amounts to the Holders. The Guarantor shall give prompt
written notice to the Guarantee Trustee in the event it makes any direct
payment hereunder.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Guarantee Trustee, the Issuer Trust or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Capital Securities to be
performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust
of all or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest
payment period on either or both the New Junior Subordinated and/or the Old
Junior Subordinated Debentures as so provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms of
the Capital Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Capital
Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer Trust granting indulgence
or extension of any kind;
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<PAGE> 16
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting,
the Issuer Trust or any of the assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the
Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a guarantor
(other than payment of the underlying obligation), it being the intent of this
Section 5.3 that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice
to, or obtain the consent of, the Guarantor with respect to the happening of
any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce
this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a
Majority in Liquidation Amount of the Capital Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Guarantee
Trustee, the Issuer Trust or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and
not of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer Trust) or upon the distribution of New Junior
Subordinated Debentures and the Old Junior Subordinated Debentures, if any Old
Junior Subordinated Debentures remain outstanding after the Exchange Offer, to
Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of
the Holders against the Issuer Trust in respect of any amounts paid to the
Holders by the Guarantor under this Guarantee Agreement; provided, however,
that the Guarantor shall not (except to the extent required by
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<PAGE> 17
mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if at the time of any such payment, any amounts are due and unpaid
under this Guarantee Agreement. if any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount
in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Indebtedness of the Guarantor to the extent and in the
manner set forth in the Indenture with respect to both the New Junior
Subordinated Debentures and the Old Junior Subordinated Debentures, and the
provisions of Article XIII of the Indenture will apply, mutatis mutandis, to
the obligations of the Guarantor hereunder. The obligations of the Guarantor
hereunder do not constitute Senior Indebtedness of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee
Agreement shall rank pari passu with any similar guarantee agreements issued by
the Guarantor on behalf of the holders of preferred or capital securities
issued by the Issuer Trust and with any other security, guarantee or other
obligation that is expressly stated to rank pari passu with the obligations of
the Guarantor under this Guarantee Agreement.
ARTICLE VII. TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Capital
Securities, (ii) the distribution of New Junior Subordinated Debentures and the
Old Junior Subordinated Debentures, if any Old Junior Subordinated Debentures
remain outstanding after the Exchange Offer, to the Holders in exchange for all
of the Capital Securities or (iii) full payment of the amounts payable in
accordance with Article IX of the Trust Agreement upon liquidation of the
Issuer Trust.
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Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
is required to restore payment of any sums paid under the Capital Securities or
this Guarantee Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder, and any purported assignment that is not
in accordance with these provisions shall be void.
SECTION 8.2. Amendments.
Except with respect to any changes that do not materially
adversely affect the rights of the Holders (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of not less than a Majority in Liquidation
Amount of the Capital Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied (confirmed by delivery of the
original) or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy
number set forth below or such other address or telecopy number or to the
attention of such other Person as the Guarantor may give notice to the Holders:
Triangle Bancorp, Inc.
4300 Glenwood Avenue
Raleigh, North Carolina 27612
Facsimile No.: (919) 781-6042
Attention: Alexander M. Donaldson, Esq.
(b) if given to the Issuer Trust, in care of the Guarantee
Trustee, at the Issuer Trust's (and the Guarantee Trustee's) address set forth
below or such other address or telecopy number or to the attention of such
other Person as the Guarantee Trustee on behalf of the Issuer Trust may give
notice to the Holders:
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<PAGE> 19
Triangle Capital Trust
c/o Triangle Bancorp, Inc.
4300 Glenwood Avenue
Raleigh, North Carolina 27612
Facsimile No.: (919) 781-6042
Attention: Alexander M. Donaldson, Esq.
with a copy to:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group;
Corporate Market Services
(c) if given to the Guarantee Trustee:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group;
Corporate Market Services
(d) if given to any Holder, at the address set forth on
the books and records of the Issuer Trust.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Capital Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but
not defined in the preamble hereto have the respective meanings assigned to
them in Section 1.1 and if not defined
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in Section 1.1, shall have the meaning ascribed to them in the Trust Agreement
as in effect on the date hereof;
(b) a term defined anywhere in this Guarantee Agreement
has the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to
Articles and Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and
vice versa; and
(g) the masculine, feminine or neuter genders used
herein shall include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 8.7. Counterparts.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
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<PAGE> 21
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
TRIANGLE BANCORP, INC.,
as Guarantor
By:
-------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Guarantee Trustee, and not
in its individual capacity
By:
------------------------
Name:
Title:
18
<PAGE> 1
EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
Dated June 3, 1997
among
TRIANGLE BANCORP, INC.,
TRIANGLE CAPITAL TRUST
and
WHEAT, FIRST SECURITIES, INC.
as Initial Purchaser
<PAGE> 2
EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of June 3, 1997 among TRIANGLE BANCORP, INC., a registered bank holding
company organized under the laws of the State of North Carolina (the
"Company"), TRIANGLE CAPITAL TRUST, a statutory business trust created under
the laws of the state of Delaware (the "Issuer Trust"), and WHEAT, FIRST
SECURITIES, INC. (the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement dated May 29,
1997 (the "Purchase Agreement"), among the Company, as issuer of the 9.375%
Junior Subordinated Deferrable Interest Debentures due June 1, 2027 (the
"Junior Subordinated Debentures"), the Issuer Trust and the Initial Purchaser,
which provides for among other things, the sale by the Issuer Trust to the
Initial Purchaser of 20,000 of the Issuer Trust's 9.375% Capital Securities,
liquidation amount $1,000 per Capital Security (the "Capital Securities"), the
proceeds of which will be used by the Issuer Trust to purchase the Junior
Subordinated Debentures. The Capital Securities, together with the Junior
Subordinated Debentures and the Company's guarantee of the Capital Securities
(the "Guarantee") are collectively referred to as the "Securities". In order
to induce the Initial Purchaser to enter into the Purchase Agreement, the
Company and the Issuer Trust have agreed to provide to the Initial Purchaser
and its direct and indirect transferees the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of Section
3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(t)
hereof.
"Business Day" shall mean a day that is not a Saturday, a Sunday, or a day
on which banking institutions in New York, New York, or in Raleigh, North
Carolina, are authorized or required to be closed.
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Commission" shall mean the Securities and Exchange Commission.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
<PAGE> 3
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Issuer Trust; provided, however, that such
depositary must have an address in the Borough of Manhattan, in The City of
New York.
"Effectiveness Period" shall have the meaning set forth in Section 2(b)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Exchange Offer" shall mean the offer by the Company and the Issuer Trust
to the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like principal amount of Exchange Securities
pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the Junior
Subordinated Debentures, the 9.375% New Junior Subordinated Deferrable Interest
Debentures due June 1, 2027 (the "New Junior Subordinated Debentures")
containing terms substantially identical to the Junior Subordinated Debentures
(except that they will not contain terms with respect to the transfer
restrictions under the Securities Act (other than to require minimum transfers
thereof to be in blocks of $100,000 principal amount) and will not provide for
any liquidated damages thereon), (ii) with respect to the Capital Securities,
the Issuer Trust's 9.375% New Capital Securities, liquidation amount $1,000 per
Capital Security (the "New Capital Securities") which will have terms
substantially identical to the Capital Securities (except that they will not
contain terms with respect to transfer restrictions under the Securities Act
(other than require minimum transfers thereof to be in blocks of $100,000
liquidation amount) and will not provide for any increase in the distribution
rate thereon) and (iii) with respect to the Guarantee, the Company's guarantee
(the "New Guarantee") of the New Capital Securities which will have terms
substantially identical to the Guarantee.
"Holder" shall mean the Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture or the Trust Agreement.
"Indenture" shall mean the Junior Subordinated Indenture dated as of June
3, 1997 relating to the Junior Subordinated Debentures and the New Junior
Subordinated Debentures
2
<PAGE> 4
among the Company, as issuer, and Bankers Trust Company, as trustee, as the
same may be amended from time to time in accordance with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the preamble to
this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n) hereof.
"Issue Date" shall mean the date of original issuance of the Securities.
"Liquidated Damages" shall have the meaning set forth in Section 2(e)
hereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth in Section
3 (t) hereof.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
hereof.
"Private Exchange Securities" shall have the meaning set forth in Section
2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble to
this Agreement.
"Records" shall have the meaning set forth in Section 3(n) hereof.
"Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that Securities or Private
Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as the case may
be, shall have been declared effective under the Securities Act and such
Securities or Private Exchange Securities, as the case may be, shall have been
exchanged or disposed of pursuant to such Registration Statement, (ii) such
Securities or Private Exchange Securities, as the case may be, shall have been
sold to the public pursuant to Rule 144(k) (or any similar provision then in
force, but not Rule 144A) under the Securities Act, or (iii) such Securities or
Private Exchange
3
<PAGE> 5
Securities, as the case may be, shall have ceased to be outstanding or (iv)
with respect to the Securities, such Securities shall have been exchanged for
Exchange Securities upon consummation of the Exchange Offer and are thereafter
freely tradeable by the holder thereof (other than an affiliate of the Company).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all Commission or National Association of Securities
Dealers, Inc. (the "NASD") registration and filing fees, including, if
applicable, the fees and expenses of any "qualified independent underwriter"
(and its counsel) that is required to be retained by any Holder of Registrable
Securities in accordance with the rules and regulations of the NASD, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws (including reasonable fees and disbursements of counsel for
any underwriters or Holders in connection with blue sky qualification of any of
the Exchange Securities or Registrable Securities) and compliance with the
rules of the NASD, (iii) all expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing the Registration
Statement, any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating agency fees,
(v) the fees and disbursements of counsel for the Company and of the
independent certified public accountants of the Company, including the expenses
of any "cold comfort" letters required by or incident to such performance and
compliance, (vi) the fees and expenses of the Trustee, and any exchange agent
or custodian, (vii) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Securities on any securities
exchange or exchanges, and (viii) the reasonable fees and expenses of any
special experts retained by the Company in connection with the Registration
Statement.
"Registration Statement" shall mean any registration statement of the
Company and the Issuer Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of two years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) commencing on the Issue Date.
"Securities" shall have the meaning set forth in the preamble to this
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in Section
2(b) hereof.
4
<PAGE> 6
"Shelf Registration Event Date" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf registration"
statement of the Company and the Issuer Trust pursuant to the provisions of
Section 2(b) hereof which covers all of the Registrable Securities or all of
the Private Exchange Securities, as the case may be, on an appropriate form
under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the Commission, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"Trust Agreement" shall mean the Amended and Restated Trust Agreement,
dated as of June 3, 1997, by the trustees named therein and the Company as
depositor.
"Trustees" shall mean any and all trustees with respect to (i) the Capital
Securities under the Trust Agreement, (ii) the Junior Subordinated Debentures
under the Indenture and (iii) the Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by any applicable
law or applicable interpretation of the staff of the Commission, the
Company and the Issuer Trust shall, for the benefit of the Holders, at
the Company's cost, use their respective best efforts to (i) cause to be
filed with the Commission within 150 days after the Issue Date an
Exchange Offer Registration Statement on an appropriate form under the
Securities Act covering the Exchange Offer, (ii) cause such Exchange
Offer Registration Statement to be declared effective under the
Securities Act by the Commission not later than the date which is 180
days after the Issue Date, and (iii) keep such Exchange Offer
Registration Statement effective for not less than 30 Business Days (or
longer if required by applicable law) after the date notice of the
Exchange Offer is mailed to the Holders. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company and the Issuer Trust
shall promptly commence the Exchange Offer and use their respective best
efforts to enable each Holder eligible and electing to exchange
Registrable Securities for a like principal amount of New Junior
Subordinated Debentures or a like liquidation amount of New Capital
Securities, together with the New Guarantee, as applicable (assuming that
such Holder is not an affiliate of the Company within the meaning of Rule
405 under the Securities Act and is not a broker-dealer tendering
Registrable Securities acquired directly from the Company for its own
account, acquires the Exchange Securities in the ordinary course of such
Holder's business and has no arrangements or understandings with any
Person to participate in the Exchange Offer for the purpose of
distributing the Exchange Securities) to transfer such Exchange
Securities from and after their receipt without any limitations or
restrictions under the Securities Act and under state securities or blue
sky laws.
5
<PAGE> 7
In connection with the Exchange Offer, the Company and the Issuer Trust
shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period
of not less than 30 days after the date notice thereof is mailed to
the Holders (or longer if required by applicable law) (such period
referred to herein as the "Exchange Period");
(iii) utilize the services of the Depositary for the Exchange
Offer;
(iv) permit Holders to withdraw tendered Securities at any
time prior to the close of business, New York City time, on the
last Business Day of the Exchange Period, by sending to the
institution specified in the notice, a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the
principal amount of Securities delivered for exchange, and a
statement that such Holder is withdrawing his election to have such
Securities exchanged;
(v) notify each Holder that any Security not tendered by such
Holder in the Exchange Offer will remain outstanding and continue
to accrue interest or accumulate distributions, as the case may be,
but will not retain any rights under this Agreement (except in the
case of the Initial Purchaser and Participating Broker-Dealers as
provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If the Initial Purchaser determines upon advice of its outside counsel
that it is not eligible to participate in the Exchange Offer with respect to
the exchange of Securities constituting any portion of an unsold allotment in
the initial distribution, as soon as practicable upon receipt by the Company
and the Issuer Trust of a written request from such Initial Purchaser, the
Company and the Issuer Trust, as applicable, shall issue and deliver to such
Initial Purchaser in exchange (the "Private Exchange") for the Securities held
by such Initial Purchaser, a like liquidation amount of New Capital Securities
of the Issuer Trust, together with the New Guarantee, or a like principal
amount of the Junior Subordinated Debentures of the Company, as applicable,
that are identical (except that such securities may bear a customary legend
with respect to restrictions on transfer pursuant to the Securities Act) to the
Exchange Securities (the "Private Exchange Securities") and which are issued
pursuant to the Indenture, the Trust Agreement or the Guarantee (which provides
that the Exchange Securities will not be subject to the transfer restrictions
set forth in the Indenture or the Trust Agreement, as applicable (other than to
require minimum transfers thereof to be in blocks of $100,000 principal amount
or liquidation amount, as the case may be), and that the Exchange Securities,
the Private Exchange Securities and the Securities will vote and consent
together on all matters as one class and that neither the Exchange
6
<PAGE> 8
Securities,the Private Exchange Securities nor the Securities will have the
right to vote sent as a separate class on any matter). The Private Exchange
Securities shall be of the same series as the Exchange Securities and the
Company and the Issuer Trust will seek to cause the CUSIP Service Bureau to
issue the same CUSIP Numbers for the Private Exchange Securities as for the
Exchange Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and, if
applicable, the Private Exchange, the Company and the Issuer Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof tendered
and not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee
for cancellation all Securities or portions thereof so accepted for
exchange by the Company; and
(iii) issue, and cause the applicable Trustee under the Indenture,
the Trust Agreement or the Guarantee, as applicable, to promptly
authenticate and deliver to each Holder, new Exchange Securities or
Private Exchange Securities, as applicable, equal in principal amount to
the principal amount of the Junior Subordinated Debentures or equal in
liquidation amount to the liquidation amount to the Capital Securities
(together with the guarantee thereof as are surrendered by such Holder.
Distributions on each New Capital Security and interest on each New Junior
Subordinated Debenture issued pursuant to the Registered Exchange Offer and
Distributions or interest, as the case may be, on each Private Exchange
Security issued in the Private Exchange will accrue from the last date on which
a Distribution or interest was paid on the Capital Security or the Junior
Subordinated Debenture surrendered in exchange therefore or, if no Distribution
or interest has been paid on such Capital Security or Junior Subordinated
Debenture, from the Issue Date. To the extent not prohibited by any law or
applicable interpretation of the staff of the Commission, the Company and the
Issuer Trust shall use their best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the Commission. Each Holder of
Registrable Securities who wishes to exchange such Registrable Securities for
Exchange Securities in the Exchange Offer will be required to make certain
customary representations in connection therewith, including, in the case of
any Holder of Capital Securities, representations that (i) it is not an
affiliate of the Issuer Trust or the Company, (ii) the Exchange Securities to
be received by it were acquired in the ordinary course of its business and
(iii) at the time of the Exchange Offer, it has no arrangement with any person
to participate in the distribution (within the meaning of the Securities Act)
of the New Capital Securities. The Company and the Issuer Trust shall inform
the Initial Purchaser, after consultation with the Trustee, of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchaser shall have the right to contact such Holders and otherwise facilitate
the tender of Registrable Securities in the Exchange Offer.
7
<PAGE> 9
Upon consummation of the Exchange Offer in accordance with this Section
2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company and the Issuer Trust shall have no further
obligation to register the Registrable Securities (other than Private Exchange
Securities) pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that: (i) the Company, the
Issuer Trust or the Majority Holders reasonably determine, after
conferring with counsel, that the Exchange Offer Registration provided in
Section 2(a) above is not available because of any change in law or in
currently prevailing interpretations of the staff of the Commission; (ii)
the Company has received an opinion of counsel, rendered by a law firm
having a recognized national tax practice, to the effect that, as a
result of the consummation of the Exchange Offer, there is more than an
insubstantial risk that (x) the Issuer Trust would be subject to United
States federal income tax with respect to income received or accrued on
the Junior Subordinated Debentures or New Junior Subordinated Debentures,
(y) interest payable by the Company on such Junior Subordinated
Debentures or New Junior Subordinated Debentures would not be deductible
by the Company, in whole or in part, for United States federal income tax
purposes, or (z) the Issuer Trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental charges;
(iii) the Exchange Offer Registration Statement is not declared effective
within 180 days of the Issue Date; or (iv) upon notice from any Holder on
or before the 20th Business Day following the consummation of the
Exchange Offer that (A) it is prohibited by law or Commission policy from
participating in the Exchange Offer, (B) it may not resell the New
Capital Securities, the New Guarantee and the New Junior Subordinated
Debentures acquired by it in the Exchange Offer to the public without
delivering a prospectus and that the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such
resales or (C) it is a broker-dealer and owns Capital Securities acquired
directly from the Issuer Trust or an affiliate of the Issuer Trust, (any
of the events specified in clauses (i) through (iv) being a "Shelf
Registration Event" and the date of occurrence thereof, the "Shelf
Registration Event Date"), the Company and the Issuer Trust shall, at
their cost, use their respective best efforts to cause to be filed as
promptly as practicable after such Shelf Registration Event Date, as the
case may be, and, in event, within 45 days after such Shelf Registration
Event Date (which shall be no earlier than 75 days after the Closing
Time), a Shelf Registration Statement providing for the sale by the
Holders of all of the Registrable Securities, and shall use their
respective best efforts to have such Shelf Registration Statement
declared effective by the Commission as soon as practicable. No Holder
of Registrable Securities shall be entitled to include any of its
Registrable Securities in any Shelf Registration pursuant to this
Agreement unless and until such Holder agrees in writing to be bound by
all of the provisions of this Agreement applicable to such Holder and
furnishes to the Company and the Issuer Trust in writing, within 15 days
after receipt of a request therefor, such information as the Company and
the Issuer Trust may, after conferring with counsel with regard to
information relating to Holders
8
<PAGE> 10
that would be required by the Commission to be included in such Shelf
Registration Statement or Prospectus included therein, reasonably request
for inclusion in the Shelf Registration Statement or Prospectus
included therein. Each Holder as to which any Shelf Registration is
being effected agrees to furnish to the Company and the Issuer Trust all
information with respect to such Holder necessary to make the information
previously furnished to the Company by such Holder not materially
misleading.
The Company and the Issuer Trust agree to use their respective best
efforts to keep the Shelf Registration Statement continuously effective for the
Rule 144(k) Period (subject to extension pursuant to the last paragraph of
Section 3 hereof) or for such shorter period which will terminate when all of
the Registrable Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement or cease to be
outstanding (the "Effectiveness Period"). The Company and the Issuer Trust
shall not permit any securities other than Registrable Securities to be
included in the Shelf Registration. The Company and the Issuer Trust will, in
the event a Shelf Registration Statement is declared effective, provide to each
Holder a reasonable number of copies of the Prospectus which is a part of the
Shelf Registration Statement, notify each such Holder when the Shelf
Registration has become effective and use their respective best efforts to take
certain other actions as are required to permit certain unrestricted resales of
the Registrable Securities. The Company and the Issuer Trust further agree, if
necessary, to supplement or amend the Shelf Registration Statement, if required
by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement or by the Securities
Act or by any other rules and regulations thereunder for shelf registrations,
and the Company and the Issuer Trust agree to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly
after its being used or filed with the Commission.
(c) Expenses. The Company, as issuer of the Junior Subordinated
Debentures, shall pay all Registration Expenses in connection with any
Registration Statement pursuant to Section 2(a) or 2(b) hereof and will
reimburse the Initial Purchaser for the reasonable fees and disbursements
of Alston & Bird LLP, counsel for the Initial Purchaser, incurred in
connection with the Exchange Offer and, if applicable, the Private
Exchange, and either Alston & Bird LLP or any one other counsel
designated in writing by the Majority Holders to act as counsel for the
Holders of the Registrable Securities in connection with a Shelf
Registration Statement, which other counsel shall be reasonably
satisfactory to the Company. Except as provided herein, each Holder
shall pay all expenses of its counsel, underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to the Shelf
Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf
Registration Statement pursuant to Section 2(b) will not be deemed to
have become effective unless it has been declared effective by the
Commission; provided, however, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to a Shelf
Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the
9
<PAGE> 11
Commission or any other governmental agency or court, such Registration
Statement will be deemed not to have been effective during the period of such
interference, until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume. The Company and the Issuer Trust
will be deemed not to have used their best efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite period if either of them
voluntarily takes any action that would result in such any Registration
Statement not being declared effective or in the Holders of Registrable
Securities covered thereby not being able to exchange or offer and sell such
Registrable Securities during that period unless such action is required by
applicable law.
(e) Additional Interest. In the event that:
(i) (A) neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement is filed with the Commission on or
prior to the 150th day after the Issue Date or (B) notwithstanding
that the Company and the Issuer Trust have consummated or will
consummate an Exchange Offer, the Company and the Issuer Trust are
required to file a Shelf Registration Statement and such Shelf
Registration Statement is not filed on or prior to the date
required by Section 2(b) hereof, then commencing on the day after
the applicable required filing date, liquidated damages shall
accrue on the principal amount of the Junior Subordinated
Debentures and, if the Exchange Offer has been consummated, the New
Junior Subordinated Debentures, and additional Distributions shall
accumulate on the liquidation amount of the Capital Securities and,
if the Exchange Offer has been consummated, the New Capital
Securities, each at a rate of 0.25% per annum; or
(iv) (A) neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement is declared effective by the
Commission on or prior to the 180th day after the Issue Date or (B)
notwithstanding that the Company and the Issuer Trust have
consummated or will consummate an Exchange Offer, the Company and
the Issuer Trust are required to file a Shelf Registration
Statement and such Shelf Registration Statement is not declared
effective by the Commission on or prior to the 30th day after the
date such Shelf Registration Statement was required to be filed,
then, commencing on the 181st day after the Issue Date, liquidated
damages shall accrue on the principal amount of the Junior
Subordinated Debentures and, if the Exchange Offer has been
consummated, the New Junior Subordinated Debentures, and additional
Distributions shall accumulate on the liquidation amount of the
Capital Securities and, if the Exchange Offer has been consummated,
the New Capital Securities, each at a rate of 0.25% per annum; or
(v) (A) the Issuer Trust has not exchanged New Capital
Securities for all Capital Securities validly tendered for exchange
by their respective Holders or the Company has not exchanged the
New Guarantee or New Junior
10
<PAGE> 12
Subordinated Debentures for the Guarantee or Junior Subordinated
Debentures validly tendered, in accordance with the terms of the
Exchange Offer on or prior to the 30th day after the date on which
the Exchange Offer Registration Statement was declared effective or
(B) if applicable, the Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be
effective at any time prior to the expiration of the Rule 144(k)
Period (other than after such time as all Capital Securities have
been disposed of thereunder or otherwise cease to be Registrable
Securities), then liquidated damages shall accrue on the principal
amount of the Junior Subordinated Debentures and, if the Exchange
Offer has been consummated, the New Junior Subordinated Debentures,
and additional Distributions shall accumulate on the liquidation
amount of the Capital Securities and, if the Exchange Offer has been
consummated, the New Capital Securities, each at a rate of 0.25% per
annum commencing on (x) 31st day after such effective date, in the
case of (A) above, or (y) the day such Shelf Registration Statement
ceases to be effective in the case of (B) above;
provided, however, that neither the liquidated damages on the Junior
Subordinated Debentures and any outstanding New Junior Subordinated Debentures,
nor the additional distribution rate on the liquidation amount of the Capital
Securities and any outstanding New Capital Securities, may exceed in the
aggregate 0.25% per annum; provided, further, however, that (1) upon the filing
of the Exchange Offer Registration Statement or a Shelf Registration Statement
(in the case of clause (1) above), (2) upon the effectiveness of the Exchange
Offer Registration Statement or a Shelf Registration Statement (in the case of
clause (ii) above), or (3) upon the exchange of New Capital Securities, the New
Guarantee and New Junior Subordinated Debentures for all Capital Securities,
the Guarantee and all Junior Subordinated Debentures tendered (in the case of
clause (iii)(A) above), or upon the effectiveness of the Shelf Registration
Statement which had ceased to remain effective (in the case of clause (iii)(B)
above) liquidated damages on the Junior Subordinated Debentures and any
outstanding New Junior Subordinated Debentures, and additional distributions on
the liquidation amount of the Capital Securities and any outstanding New
Capital Securities as a result of such clause (or relevant subclause thereof),
as the case may be, shall cease to accrue and accumulate.
Any amounts of liquidated damages and additional distributions due
pursuant to Section 2(e)(i), (ii) or (iii) above ("Liquidated Damages"), will
be payable in cash on the next succeeding June 1 or December 1. as the case may
be, to Holders on the relevant record dates for the payment of interest and
distributions pursuant to the Indenture and the Trust Agreement, respectively.
(f) Specific Enforcement. Without limiting the remedies available
to the Holders, the Company and the Issuer Trust acknowledge that any
failure by the Company or the Issuer Trust to comply with its obligations
under Section 2(a) and Section 2(b) hereof may result in material
irreparable injury to the Holders for which there is no adequate remedy
at law, that it would not be possible to measure damages for such
injuries precisely and that, in the event of any such failure, any Holder
may obtain such
11
<PAGE> 13
relief as may be required to specifically enforce the Company's and the
Issuer Trust's obligations under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the obligations of the
Company and the Issuer Trust with respect to the Registration Statements
pursuant to Sections 2(a) and 2(b) hereof, the Company and the Issuer Trust
shall use their best efforts to:
(a) prepare and file with the Commission a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Company and the Issuer Trust, (ii) shall, in the case of
a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and, in the case of an Exchange
Offer, be available for the exchange of the Registrable Securities, and
(iii) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the Commission to be filed therewith; and use their best
efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof, provided, however,
that if (1) such filing is pursuant to Section 2(b), or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to
Section 2(a) is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities, before
filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Company and the Issuer Trust shall furnish to
and afford the Holders of the Registrable Securities and each
Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters, if
any, a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed. The Company and
the Issuer Trust shall not file any Registration Statement or Prospectus
or any amendments or supplements thereto in respect of which the Holders
must be afforded an opportunity to review prior to the filing of such
document if the Majority Holders or such Participating Broker-Dealer, as
the case may be, their counsel or the managing underwriters, if any,
shall reasonably object;
(b) prepare and file with the Commission such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented, if so determined by the Company
or the Issuer Trust or requested by the Commission, by any required
prospectus supplement and as so supplemented to be filed pursuant to Rule
424 (or any similar provision then in force) under the Securities Act,
and comply with the provisions of the Securities Act, the Exchange Act
and the rules and regulations promulgated thereunder applicable to it
with respect to the disposition of all securities covered by each
Registration Statement during the Effectiveness Period or the Applicable
Period, as the case may be, in accordance with the intended method or
methods of distribution by the
12
<PAGE> 14
selling Holders thereof described in this Agreement (including sales by
any Participating Broker-Dealer),
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities included in the Shelf Registration Statement, at
least three Business Days prior to filing, that a Shelf Registration
Statement with respect to the Registrable Securities is being filed and
advising such Holder that the distribution of Registrable Securities will
be made in accordance with the method selected by the Majority Holders;
and (ii) furnish to each Holder of Registrable Securities included in the
Shelf Registration Statement and to each underwriter of an underwritten
offering of Registrable Securities, if any, without charge, as many copies
of each Prospectus, including each preliminary Prospectus, and any
amendment or supplement thereto and such other documents as such Holder or
underwriter may reasonably request, in order to facilitate the public sale
or other disposition of the Registrable Securities; and (iii) consent to
the use of the Prospectus or any amendment or supplement thereto by each
of the selling Holders of Registrable Securities included in the Shelf
Registration Statement in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(d) in the case of a Shelf Registration, register or qualify the
Registrable Securities under all applicable state securities or "blue
sky" laws of such jurisdictions by the time the applicable Registration
Statement is declared effective by the Commission as any Holder of
Registrable Securities covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Securities shall
reasonably request in writing in advance of such date of effectiveness,
and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Holder and underwriter to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company and
the Issuer Trust shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d),
(ii) file any general consent to service of process in any jurisdiction
where it would not otherwise be subject to such service of process or
(iii) subject itself to taxation in any such Jurisdiction if it is not
then so subject;
(e) in the case of (1) a Shelf Registration or (2) Participating
Broker-Dealers from whom the Company or the Issuer Trust has received
prior written notice that they will be utilizing the Prospectus contained
in the Exchange Offer Registration Statement as provided in Section 3(t)
hereof, are seeking to sell Exchange Securities and are required to
deliver Prospectuses, notify each Holder of Registrable Securities or
such Participating Broker-Dealers, as the case may be, their counsel and
the managing underwriters, if any, promptly and promptly confirm such
notice in writing (1) when a Registration Statement has become effective
and when any post-effective amendments and supplements thereto become
effective, (ii) of any request by the Commission or any state securities
authority for amendments and supplements to a Registration Statement or
Prospectus or for additional information after the Shelf Registration
Statement has
13
<PAGE> 15
become effective, (iii) of the issuance by the Commission or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the qualification of the Registrable Securities
or the Exchange Securities to be offered or sold by the Participating
Broker-Dealer in any jurisdiction described in paragraph 3(d) hereof or
the initiation of any proceedings for that purpose, (iv) in the case of a
Shelf Registration, if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered
thereby, any of the representations and warranties of the Company and the
Issuer Trust contained in any purchase agreement, securities sales
agreement or other similar agreement shall cease to be true and correct in
all material respects, (v) of the happening of any event or the failure of
any event to occur or the discovery of any facts or otherwise, during the
Effectiveness Period which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or
which causes such Registration Statement or Prospectus to omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (vi) the
Company and the Issuer Trust's reasonable determination that a
post-effective amendment to the Registration Statement would be
appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(g) in the case of a Shelf Registration, finish to each Holder of
Registrable Securities included within the coverage of such Registration
Statement, without charge, at least one conformed copy of each
Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated therein
by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
sold and not bearing any restrictive legends and in such denominations
(consistent with the provisions of the Indenture and the Trust Agreement)
and registered in such names as the selling Holders or the underwriters
may reasonably request at least two Business Days prior to the closing of
any sale of Registrable Securities pursuant to such Shelf Registration
Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best
efforts to prepare a supplement or post-effective amendment to such
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus would not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and to notify each Holder to suspend use of
the Prospectus as promptly as practicable after the occurrence of such an
event;
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<PAGE> 16
(j) in the case of a Shelf Registration, a reasonable time prior to
the filing of any document which is to be incorporated by reference into a
Registration Statement or a Prospectus after the initial filing of a
Registration Statement, provide a reasonable number of copies of such
document to the Holders; and make such of the representatives of the
Company and the Issuer Trust as shall be reasonably requested by the
Holders of Registrable Securities or the Initial Purchaser on behalf of
such Holders available for discussion of such document;
(k) obtain a CUSIP number for all New Capital Securities and the
Capital Securities (and if the Issuer Trust has made a distribution of
the Junior Subordinated Debentures or New Junior Subordinated Debentures
to the Holders of the Capital Securities, the Junior Subordinated
Debentures), not later than the effective date of an Exchange Offer
Registration Statement, and provide the Trustee with printed certificates
for the Exchange Securities or the Registrable Securities in a form
eligible for deposit with the Depository;
(l) cause the Indenture, the Trust Agreement, the Guarantee, and the
New Guarantee to be qualified under the Trust Indenture Act of 1939 (the
"TIA") in connection with the registration of the Exchange Securities or
Registrable Securities, as the case may be, and effect such changes to
such documents as may be required for them to be so qualified in
accordance with the terms of the TIA and execute, and use its best
efforts to cause the relevant trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents
required to be filed with the Commission to enable such documents to be
so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) as are customary in underwritten
offerings and take all such other appropriate actions as are reasonably
requested in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection,
whether or not an underwriting agreement is entered into and whether or
not the registration is an underwritten registration, if requested by (x)
the Initial Purchaser, in the case where such Initial Purchaser holds
Securities acquired by it as part of its initial distribution and (y)
other Holders of Securities covered thereby: (i) make such
representations and warranties to Holders of such Registrable Securities
and the underwriters (if any), with respect to the business of the Issuer
Trust, the Company and its subsidiaries as then conducted and the Shelf
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings,
and confirm the same if and when requested (ii) obtain opinions of
counsel to the Company and the Issuer Trust and updates thereof (which
may be in the form of a reliance letter) in form and substance reasonably
satisfactory to the managing underwriters (if any) and the Holders of a
majority in principal amount of the Registrable Securities being sold,
addressed to each selling Holder and the underwriters (if any) covering
the matters customarily covered in opinions requested in underwritten
offerings
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<PAGE> 17
and such other matters as may be reasonably requested by such underwriters
(it being agreed that the matters to be covered by such opinions may be
subject to customary qualifications and exceptions) (iii) obtain "cold
comfort" letters and updates thereof in form and substance reasonably
satisfactory to the managing under-writers from the independent certified
public accountants of the Company and the Issuer Trust (and, if necessary,
any other independent certified public accountants of any subsidiary of
the Company and the Issuer Trust or of any business acquired by the
Company and the Issuer Trust for which financial statements and financial
data are, or are required to be, included in the Shelf Registration
Statement), addressed to each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings and such
other matters as reasonably requested by such under-writers in accordance
with Statement on Auditing Standards No. 72; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in
Section 4 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Shelf Registration Statement and the managing
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section (including, without limitation, such underwriters
and selling Holders). The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section 2(b) or
(2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, make reasonably
available for inspection by any selling Holder of such Registrable
Securities being sold or each such Participating Broker-Dealer, as the
case may be, any underwriter participating in any such disposition of
Registrable Securities, and any attorney, accountant or other agent
retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate
documents and properties of the Issuer Trust, the Company and its
subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the
Issuer Trust, the Company and its subsidiaries to supply all relevant
information in each case reasonably requested by any such Inspector in
connection with such Shelf Registration Statement provided, however, that
the foregoing inspection and information gathering shall be coordinated
by the Initial Purchaser and, on behalf of the selling Holders of
Registrable Securities, by one counsel designated as described in Section
2(c) hereof Records which the Company and the Issuer Trust determine, in
good faith, to be confidential and any records which either of them
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a material misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or is
16
<PAGE> 18
necessary in connection with any action, suit or proceeding or (iii) the
information in such Records has been made generally available to the
public. Each selling Holder of such Registrable Securities and each such
Participating Broker-Dealer all be required to agree in writing that
information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Issuer Trust or the Company unless
and until such is made generally available to the public. Each selling
Holder of such Registrable Securities and each such Participating
Broker-Dealer will be required to further agree in writing that it will,
upon learning that disclosure of such Records is sought in a court of
competent Jurisdiction, give notice to the Company and allow the Company
at its expense to undertake appropriate action to prevent disclosure of
the Records deemed confidential;
(o) comply with all applicable rules and regulations of the
Commission so long as any provision of this Agreement shall be applicable
and make generally available to their respective security holders earning
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12 month period if such period is
a fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm commitment or
best efforts underwritten offering and (ii) if not sold to underwriters
in such an offering, commencing on the first day of the first fiscal
quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer or a Private Exchange, if
requested by a Trustee, obtain an opinion of counsel to the Company
addressed to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer or the Private Exchange,
as the case may be, and which includes an opinion that (i) the Company or
the Issuer Trust, as the case requires, has duly authorized, executed and
delivered the Exchange Securities or the Private Exchange Securities, as
the case may be, and (ii) each of the Exchange Securities or the Private
Exchange Securities, as the case may be, constitute a legal, valid and
binding obligation of the Company or the Issuer Trust, as the case
requires, enforceable against the Company or the Issuer Trust, as the
case requires, in accordance with their respective terms (in each case,
with customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Securities by Holders to the Company or
the Issuer Trust, as applicable (or to such other Person as directed by
the Company or the Issuer Trust, respectively), in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may
be, mark, or cause to be marked, on such Registrable Securities delivered
by such Holders that such Registrable Securities are being canceled in
exchange for the Exchange Securities or the Private Exchange Securities,
as the case may be in no event shall such Registrable Securities be
marked as paid or otherwise satisfied;
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<PAGE> 19
(r) cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Securities and their respective
counsel in connection with any filings required to be made with the NASD;
(s) use its best efforts to take all other steps necessary to effect
the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution," which section shall be reasonably acceptable to
the Initial Purchaser or another representative of the Participating
Broker-Dealers, and which shall contain a summary statement of the
positions taken or policies made by the staff of the Commission with
respect to the potential "underwriter" status of any broker-dealer (a
"Participating Broker-Dealer") that holds Registrable Securities acquired
for its own account as a result of market-making activities or other
trading activities and that will be the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of Exchange Securities to be received
by such broker-dealer in the Exchange Offer, whether such positions or
policies have been publicly disseminated by the staff of the Commission
or such positions or policies, in the reasonable judgment of the Initial
Purchaser or such other representative, represent the prevailing views of
the staff of the Commission, including a statement that any such
broker-dealer who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer may be deemed a statutory underwriter and
must deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of such Exchange Securities, (ii) furnish
to each Participating Broker-Dealer who has delivered to the Company the
notice referred to in Section 3(e), without charge, as many copies of
each Prospectus included in the Exchange Offer Registration Statement,
including any preliminary prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request (each
of the Company and the Issuer Trust hereby consents to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or
any amendment or supplement thereto by any Person subject to the
prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, in connection with the sale or transfer of
the Exchange Securities covered by the Prospectus or any amendment or
supplement thereto), (iii) keep the Exchange Offer Registration Statement
effective and amend and supplement the Prospectus contained therein in
order to permit such Prospectus to be lawfully delivered by all Persons
subject to the prospectus delivery requirements of the Securities Act for
such period of time as such Persons must comply with such requirements
under the Securities Act and applicable rules and regulations in order to
resell the Exchange Securities; provided, however, that such period shall
not be required to exceed 90 days (or such longer period if extended
pursuant to the last sentence of Section 3 hereof) (the "Applicable
Period"), and (iv) include in the transmittal letter or similar
documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following provision:
18
<PAGE> 20
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of Exchange Securities received in
respect of such Registrable Securities pursuant to the Exchange
Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer
will not be deemed to admit that it is an underwriter within the meaning
of the Securities Act; and
(B) in the case of any Exchange Offer Registration
Statement, the Company and the Issuer Trust agree to deliver to the
Initial Purchaser or to another representative of the Participating
Broker-Dealers, if requested by such Initial Purchaser or such other
representative of the Participating Broker-Dealers, on behalf of the
Participating Broker-Dealers upon consummation of the Exchange Offer (i)
an opinion of counsel in form and substance reasonably satisfactory to the
Initial Purchaser or such other representative of the Participating
Broker-Dealers, covering the matters customarily covered in opinions
requested in connection with Exchange Offer Registration Statements and
such other matters as may be reasonably requested (it being agreed that
the matters to be covered by such opinion may be subject to customary
qualifications and exceptions), (ii) an officers' certificate containing
certifications substantially similar to those set forth in Section 5(g) of
the Purchase Agreement and such additional certifications as are
customarily delivered in a public offering of debt securities and (iii) as
well as upon the effectiveness of the Exchange Offer Registration
Statement, a comfort letter, in each case, in customary form if permitted
by Statement on Auditing Standards No. 72.
The Company or the Issuer Trust may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Company or the Issuer Trust, as applicable, such information regarding such
seller as may be required by the staff of the Commission to be included in a
Registration Statement. The Company or the Issuer Trust may exclude from such
registration the Registrable Securities of any seller who unreasonably fails to
finish such information within a reasonable time after receiving such request.
The Company shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or (2) Participation-
Broker-Dealers who have notified the Company and the Issuer Trust that they
will be utilizing the Prospectus contained in the Exchange Offer Registration
Statement as provided in Section 3(t) hereof and are seeking to sell Exchange
Securities and are required to deliver Prospectuses, each Holder agrees that,
upon receipt of any notice from the Company or the Issuer Trust of the
happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith suspend use of the
Prospectus and discontinue disposition of Registrable Securities pursuant to a
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof or until
it is advised in
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<PAGE> 21
writing (the "Advice") by the Company and the Issuer Trust that the use of the
applicable Prospectus may be resumed, and, if so directed by the Company and the
Issuer Trust, such Holder will deliver to the Company or the Issuer Trust (at
the Company's or the Issuer Trust's expense, as the case requires) all copies in
such Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or Exchange
Securities, as the case may be, current at the time of receipt of such notice.
If the Company or the Issuer Trust shall give any such notice to suspend the
disposition of Registrable Securities, or Exchange Securities, as the case may
be, pursuant to a Registration Statement, the Company and the Issuer Trust shall
use their best efforts to file and have declared effective (if an amendment) as
soon as practicable an amendment or supplement to the Registration Statement and
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days in the
period from and including the date of the giving of such notice to and including
the date when the Company and the Issuer Trust shall have made available to the
Holders (x) copies of the supplemented or amended Prospectus necessary to resume
such dispositions or (y) the Advice.
4. Indemnification and Contribution.
(a) In connection with any Registration Statement, the Company and
the Issuer Trust shall, jointly and severally, indemnify and hold
harmless the Initial Purchaser, each Holder, each underwriter who
participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each Person, if any, who controls any of
such parties within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and each of their respective directors,
officers, employees and agents, as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred,
arising out of any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement (or any
amendment thereto), covering Registrable Securities or Exchange
Securities, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained
in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, to
the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission,
or any such
20
<PAGE> 22
alleged untrue statement or omission, if such settlement is effected
with the prior written consent of the Company; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of counsel
chosen by such Holder, such Participating Broker-Dealer, or any
underwriter (except to the extent otherwise expressly deed in
Section 4(c) hereto), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation
or proceeding by any court or governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 4(a);
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Issuer Trust by such Holder, such Participating Broker-Dealer,
or any underwriter with respect to such Holder, Participating Broker-Dealer or
any underwriter, as the case may be, expressly for use in a Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) and (ii) the Company and the Issuer Trust shall not be
liable to any such Holder, Participating Broker-Dealer, any underwriter or
controlling with respect to any untrue statement or alleged untrue statement or
omission or alleged person, with omission in any preliminary Prospectus to the
extent that any such loss, liability, claim, damage or expense of any Holder,
Participating Broker-Dealer, any underwriter or controlling person results from
the fact that such Holder, any underwriter or Participating Broker-Dealer, sold
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final Prospectus as then
amended or supplemented if the Company had previously finished copies thereof
to such Holder, underwriter, or Participating Broker-Dealer, and the loss,
liability, claim, damage or expense of such Holder, underwriter, Participating
Broker-Dealer, or controlling person results from an untrue statement or
omission of a material fact contained in the preliminary Prospectus which was
corrected in the final Prospectus. Any amounts advanced by the Company or the
Issuer Trust to an indemnified party pursuant to this Section 4 as a result of
such losses shall be returned to the Company or the Issuer Trust if it shall be
finally determined by such a court in a judgment not subject to appeal or final
review that such indemnified party was not entitled to indemnification by the
Company or the Issuer Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Issuer Trust, any underwriter and the
other selling Holders and each of their respective directors, officers
(including each officer of the Company and the Issuer Trust who signed
the Registration Statement), employees and agents and each Person, if
any, who controls the Company, the Issuer Trust, any underwriter or any
other selling Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all loss,
liability, claim, damage and expense whatsoever described in the
indemnity contained in Section 4(a) hereof, as incurred, but
21
<PAGE> 23
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information
furnished to the Company or the Issuer Trust by such selling Holder with
respect to such Holder expressly for use in such Registration Statement
(or any amendment thereto), or any such Prospectus (or any amendment or
supplement thereto); provided, however, that, in the case of a Shelf
Registration Statement, no such Holder shall be liable for any amount
hereunder in excess of the amount of net proceeds received by such Holder
from the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers
properly served on such indemnified party, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any
liability which it may have under this Section 4, except to the extent
that it is materially prejudiced by such failure. An indemnifying party
may participate at its own expense in the defense of such action. If an
indemnifying party so elects within a reasonable time after receipt of
such notice, an indemnifying party, severally or jointly with any other
indemnifying parties receiving such notice, may assume the defense of
such action with counsel chosen by it and reasonably acceptable to the
indemnified parties defendant in such action, provided, however, that if
(i) representation of such indemnified party by the same counsel would
present a conflict of interest or (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and
the indemnifying party and any such indemnified party reasonably
determines that there may be legal defenses available to such indemnified
party which are different from or in addition to those available to such
indemnifying party, then in the case of clauses (i) and (ii) of this
Section 4(c) such indemnifying party and counsel for each indemnifying
party or parties shall not be entitled to assume such defense. If an
indemnifying party is not entitled to assume the defense of such action
as a result of the proviso to the preceding sentence, counsel for such
indemnifying party and counsel for each indemnified party or parties
shall be entitled to conduct the defense of such indemnified party or
parties. If an indemnifying party assumes the defense of such action, in
accordance with and as permitted by the provisions of this paragraph,
such indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection
with such action. In no event shall the indemnifying parties be liable
for the fees and expenses of more than one counsel (in addition to local
counsel), separate from its own counsel, for all indemnified parties in
connection with any one action or separate but similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4
(whether or not the indemnified
22
<PAGE> 24
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional written release in
form and substance satisfactory to the indemnified parties of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on
behalf of any indemnified party.
(d) Notwithstanding the last sentence of Section 4(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of
counsel pursuant to Section 4(a)(iii) above, such indemnifying party
agrees that it shall be liable for any settlement effected without its
written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of
such settlement provided that an indemnified party shall not be liable
for any such settlement effected without its consent if such indemnifying
party (1) reimburses such indemnified party in accordance with such
request to the extent it considers reasonable and (2) provides written
notice to the indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in
this Section 4 is for any reason held to be unavailable to the
indemnified parties although applicable in accordance with its terms, the
Company, the Issuer Trust, and the Holders shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company, the
Issuer Trust, and the Holders, as incurred; provided that no Person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any Person
that was not guilty of such fraudulent misrepresentation. As between the
Company, the Issuer Trust, and the Holders, such parties shall contribute
to such aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity agreement in such proportion as
shall be appropriate to reflect the relative fault of the Company and
Issuer Trust, on the one hand, and the Holders, on the other hand, with
respect to the statements or omissions which resulted in such loss,
liability, claim, damage or expense, or action in respect thereof, as
well as any other relevant equitable considerations. The relative fault
of the Company and the Issuer Trust, on the one hand, and of the Holders,
on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Issuer Trust, on the one hand,
or by or on behalf of the Holders, on the other, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Issuer
Trust and the Holders of the Registrable Securities agree that it would
not be just and
23
<PAGE> 25
equitable if contribution pursuant to this Section 4 were to be determined
by pro rata allocation or by any other method of allocation that does not
take into account the relevant equitable considerations. For purposes of
this Section 4, each affiliate of a Holder, and each director, officer,
employee, agent and Person, if any, who controls a Holder or such
affiliate within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as such Holder, and each director of each of the Company or the Issuer
Trust, each officer of each of the Company or the Issuer Trust who signed
the Registration Statement, and each Person, if any, who controls each of
the Company and the Issuer Trust within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as each of the Company or the Issuer Trust.
5. Participation in Underwritten Registrations. No Holder may participate
in any underwritten registration hereunder unless such Holder (a) agrees to
sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Selection of Underwriters. The Holders of Registrable Securities
covered by a Shelf Registration Statement who desire to do so may sell the
securities covered by such Shelf Registration in an underwritten offering. In
any such underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of a
majority in aggregate principal amount of the Registrable Securities included
in such offering; provided, however, that such underwriters and managers must
be reasonably satisfactory to the Company and the Issuer Trust.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company or the
Issuer Trust is subject to the reporting requirements of Section 13 or 15
of the Exchange Act and any Registrable Securities remain outstanding,
each of the Company and the Issuer Trust, as the case may be, will use
its best efforts to file the reports required to be filed by it under the
Securities Act and Section 13(a) or 15(d) of the Exchange Act and the
rules and regulations adopted by the Commission thereunder, or, if it
ceases to be so required to file such reports, it will, upon the request
of any Holder of Registrable Securities (a) make publicly available such
information as is necessary to permit sales of their securities pursuant
to Rule 144 under the Securities Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales of their securities
pursuant to Rule 144A under the Securities Act and it will take such
further action as any Holder of Registrable Securities may reasonably
request, and (c) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to
enable such Holder to sell its Registrable Securities without
registration under the Securities Act within the limitation of the
exemptions provided by (1) Rule 144 under the
24
<PAGE> 26
Securities Act, as such rule may be amended from time to time, (11) Rule
144A under the Securities Act, as such rule may be amended from time to
time, or (iii) any similar rules or regulations hereafter adopted by the
Commission. Upon the request of any Holder of Registrable Securities, the
Company or the Issuer Trust, as the case may be, will deliver to such
Holder a written statement as to whether it has complied with such
requirements.
(b) No Inconsistent Agreements. The Company or the Issuer Trust has
not entered into nor will the Company or the Issuer Trust on or after the
date of this Agreement enter into any agreement which is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Company's
or the Issuer Trust's other issued and outstanding securities under any
such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company and the Issuer
Trust have obtained the written consent of Holders of at least a majority
in aggregate principal amount of the outstanding Registrable Securities
affected by such amendment, modification, supplement, waiver or
departure; provided no amendment, modification or supplement or waiver or
consent to the departure with respect to the provisions of Section 4
hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder of Registrable Securities.
Notwithstanding the foregoing sentence, (i) this Agreement may be
amended, without the consent of any Holder of Registrable Securities, by
written agreement signed by the Company, the Issuer Trust and the Initial
Purchaser, to cure any ambiguity, correct or supplement any provision of
this Agreement that may be inconsistent with any other provision of this
Agreement or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be inconsistent
with other provisions of this Agreement, (ii) this Agreement may be
amended, modified or supplemented, and waivers and consents to departures
from the provisions hereof may be given, by written agreement signed by
the Company, the Issuer Trust and the Initial Purchaser to the extent
that any such amendment, modification, supplement, waiver or consent is,
in their reasonable judgment, necessary or appropriate to comply with
applicable law (including any interpretation of the Staff of the
Commission) or any change therein and (iii) to the extent any provision
of this Agreement relates to the Initial Purchaser, such provision may be
amended, modified or supplemented, and waivers or consents to departures
from such provisions may be given, by written agreement signed by the
Initial Purchaser, the Company and the Issuer Trust.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given
by such Holder to the Company or the Issuer Trust by means of a notice
given in accordance with the provisions of this Section 7(d), which
address
25
<PAGE> 27
initially is, with respect to the Initial Purchaser, the address set forth
in the Purchase Agreement; and (ii) if to the Company or the Issuer Trust,
initially at the Company's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed, when
answered back, if telexed. Copies of all such notices, demands, or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee, at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of
the Initial Purchaser, including, without limitation and without the need
for an express assignment, subsequent Holders; provided, however, that
nothing herein shall be deemed to permit any assignment, transfer or
other disposition of Registrable Securities in violation of the terms of
the Purchase Agreement or the Indenture. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such
Registrable Securities, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of
this Agreement and such Person shall be entitled to receive the benefits
hereof.
(f) Third-Party Beneficiary. The Initial Purchaser shall be a third
party beneficiary of the agreements made hereunder between the Company
and the Issuer Trust, on the one hand, and the Holders, on the other
hand, and shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE
IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF
LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK IN
26
<PAGE> 28
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected or
impaired thereby.
(k) Securities Held by the Company, the Issuer Trust or its
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, the Issuer Trust or its affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the
Holders of such required percentage.
27
<PAGE> 29
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TRIANGLE BANCORP, INC.
By:
----------------------
Name:
----------------------
Title:
----------------------
TRIANGLE CAPITAL TRUST
By:
----------------------
Name:
----------------------
Title: Administrative Trustee
Confirmed and accepted as of the date first above written:
WHEAT, FIRST SECURITIES, INC.
By:
----------------------
Name:
----------------------
Title:
----------------------
<PAGE> 30
2
<PAGE> 1
EXHIBIT 4.5
This Capital Securities Certificate is a Global Capital Securities
Certificate within the meaning of the Trust Agreement hereinafter referred to
and is registered in the name of a Depositary or a nominee of a Depositary. This
Capital Securities Certificate is exchangeable for Capital Securities
Certificates registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Trust Agreement and
may not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary, except in the limited circumstances described in the
Trust Agreement.
Unless this Capital Securities Certificate is presented by an
authorized representative of The Depository Trust Company, a New York
Corporation ("DTC"), to Triangle Capital Trust or its agent for registration of
transfer, exchange or payment, and any Capital Securities Certificate issued is
registered in the name of Cede & Co. or such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL
SECURITIES). ANY SUCH TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO
THE RECEIPT OF DISTRIBUTIONS OF SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN OR INDIVIDUAL RETIREMENT ACCOUNT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") (EACH, A "PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE
"PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET
ENTITY"), AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD
THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE
OR HOLDING IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY U.S. DEPARTMENT OF
LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1
OR 84-14 OR ANOTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES CERTIFICATE OR ANY
INTEREST HEREIN THAT IS A PLAN OR A PLAN ASSET ENTITY OR IS PURCHASING SUCH
SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING HEREOF THAT (A) THE PURCHASE AND HOLDING OF THE
CAPITAL SECURITIES IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY PTCE 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION, (B) THE COMPANY
AND THE ADMINISTRATORS ARE NOT "FIDUCIARIES" WITHIN THE MEANING OF SECTION 3(21)
OF ERISA AND THE REGULATIONS THEREUNDER, WITH RESPECT TO SUCH PERSON'S
INTEREST IN THE CAPITAL SECURITIES OR THE JUNIOR SUBORDINATED DEBENTURES, AND
(C) IN PURCHASING THE CAPITAL SECURITIES SUCH PERSON APPROVES THE PURCHASE OF
THE JUNIOR SUBORDINATED DEBENTURES AND THE APPOINTMENT OF THE ISSUER TRUSTEES.
<PAGE> 2
CERTIFICATE NUMBER AGGREGATE LIQUIDATION AMOUNT
P-__ $20,000,000
(20,000 CAPITAL SECURITIES)
CUSIP NO. __________
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
TRIANGLE CAPITAL TRUST
9.375% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Triangle Capital Trust, a statutory business trust formed under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that Cede & Co.
(the "Holder") is the registered owner of Twenty Million Dollars ($20,000,000)
aggregate liquidation amount of capital securities of the Issuer Trust
representing a preferred undivided beneficial interest in the assets of the
Issuer Trust and has designated the Triangle Capital Trust 9.375% Capital
Securities (liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books and records
of the Issuer Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer as provided in
Section 5.5 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Issuer Trust, dated as of June 3, 1997, as the same may be amended from time to
time (the "Trust Agreement"), among Triangle Bancorp, Inc., as Depositor,
Bankers Trust Company, as Property Trustee, Bankers Trust (Delaware), as
Delaware Trustee, and the Holders of Trust Securities, including the designation
of the terms of the Capital Securities as set forth therein. The Holder is
entitled to the benefits of the Guarantee Agreement entered into by Triangle
Bancorp, Inc., as Guarantor, and Bankers Trust Company, as Guarantee Trustee,
dated as of June 3, 1997 (the "Guarantee Agreement"), to the extent provided
therein. The Issuer Trust will furnish a copy of the Trust Agreement and the
Guarantee Agreement to the Holder without charge upon written request to the
Issuer Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
<PAGE> 3
IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust has
executed this certificate this ______ day of ________, 1997.
TRIANGLE CAPITAL TRUST
By:
--------------------------
Debra L. Lee
Administrator
COUNTERSIGNED AND REGISTERED:
BANKERS TRUST COMPANY,
as Securities Registrar
By:
---------------------------
Authorized Signatory
<PAGE> 4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to:
- - -------------------------------------------------------------------------------
(Insert assignee's social security or tax
identification number)
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints ______________________________________________________
- - -------------------------------------------------------------------------------
agent to transfer this Capital Securities Certificate on the books of the Issuer
Trust. The agent may substitute another to act for him or her.
Date:
--------------
Signature:
---------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Capital SecuritiesCertificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
<PAGE> 1
EXHIBIT 4.6
TRIANGLE BANCORP, INC.
9.375% JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES
DUE JUNE 1, 2027
No.____________ $_________
TRIANGLE BANCORP, INC., a North Carolina corporation (hereinafter
called the "Company", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to TRIANGLE CAPITAL TRUST, or registered assigns, the principal sum of
______________ Dollars ($_____________ ) on June 1, 2027, or such other
principal amount represented hereby as may be set forth in the records of the
Securities Registrar hereinafter referred to in accordance with the Indenture.
The Company further promises to pay interest on said principal from [ISSUANCE
DATE], or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually (subject to deferral as set forth
herein) in arrears on June 1 and December 1 of each year, commencing on December
1, 1997 at the rate of 9.375% per annum, together with Additional Sums, if any,
as provided in Section 10.6 of the Indenture, until the principal hereof is paid
or duly provided for or made available for payment; provided that any overdue
principal, premium or Additional Sums and any overdue installment of interest
shall bear Additional Interest at the rate of 9.375% per annum (to the extent
that the payment of such interest shall be legally enforceable), compounded
semiannually, from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand. The amount
of interest payable for any period less than a full interest period shall be
computed on the basis of a 360-day year of twelve 30-day months and the actual
days elapsed in a partial month in such period. The amount of interest payable
for any full interest period shall be computed by dividing the applicable rate
per annum by two. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest installment, which shall be the May 15 or November 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee (notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date) or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time during the term of this Security, from
time to time to defer the payment of interest on this Security for up to 10
consecutive semi-annual interest payment periods with respect to each deferral
period (each an "Extension Period"), during which Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date, and at the end of which the Company shall pay all interest then
accrued and unpaid including Additional Interest, as provided below; provided,
however, that no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security and no such Extension Period may end on a date other
than
<PAGE> 2
an Interest Payment Date; and provided, further, however, that, during any
such Extension Period' the Company shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock, or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company that rank pari passu in all respects with or
junior in interest to this Security (other than (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Company in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of any one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or shareholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(b) as a result of an exchange or conversion of any class or series of the
Company's capital stock (or any capital stock of a Subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or series
of the Company's indebtedness for any class or series of the Company's capital
stock, (c) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any Rights Plan, or the issuance of rights, stock or
other property under any Rights Plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock). Prior
to the termination of any such Extension Period, the Company may further defer
the payment of interest, provided that no Extension Period shall exceed 10
consecutive semi-annual interest payment periods, extend beyond the Stated
Maturity of the principal of this Security or end on a date other than an
Interest Payment Date. Upon the termination of any such Extension Period and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period, subject to the above conditions. No interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest (to the extent that the
payment of such interest shall be legally enforceable) at the rate of 9.375% per
annum, compounded semiannually and calculated as set forth in the first
paragraph of this Security, from the date on which such amounts would otherwise
have been due and payable until paid or made available for payment. The Company
shall give the Holder of this Security and the Trustee notice of its election to
begin any Extension Period at least one Business Day prior to the next
succeeding Interest Payment Date on which interest on this Security would be
payable but for such deferral or, so long as such securities are held by
Triangle Capital Trust (the "Issuer Trust"), at least one Business Day prior to
the earlier of (i) the next succeeding date on which Distributions on the
Capital Securities of such Issuer Trust would be payable but for such deferral,
and (ii) the date on which the Property Trustee of such Issuer Trust is required
to give notice to holders of such Capital Securities of the record date or the
date such Distributions are payable, but in any event not less than one Business
Day prior to such record date.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that, at the option of the Company, payment of
interest may be made (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Securities Register, or (ii) if to a
Holder of $1,000,000 or more in
2
<PAGE> 3
aggregate principal amount of this Security, by wire transfer in immediately
available funds upon written request to the Trustee not later than 15 calendar
days prior to the date on which the interest is payable.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such actions as may be necessary or appropriate to effectuate the subordination
so provided, and (c) appoints the Trustee his or her attorney-in-fact for any
and all such purposes. Each Holder hereof, by his or her acceptance hereof,
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred and waives reliance by each such holder upon
said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
TRIANGLE BANCORP, INC.
By
------------------------------
Debra L. Lee
Executive Vice President
Attest:
- - ---------------------------------
Secretary or Assistant Secretary
[SEAL]
3
<PAGE> 4
This is one of the Securities of the 9.375% Junior Subordinated
Deferrable Interest Debentures series designated therein referred to in the
within-mentioned Indenture.
Dated: BANKERS TRUST COMPANY,
---------------------- as Trustee
By:
-------------------------------
Authorized Signatory
4
<PAGE> 5
(Reverse of Security)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under the Junior Subordinated Indenture, dated as of June 3, 1997 (herein
called the "Indenture"), between the Company and Bankers Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Indebtedness and the Holders of the Securities, and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the 9.375% Junior Subordinated Deferrable Interest
Debentures (the "Junior Subordinated Debentures") series designated herein,
limited in aggregate principal amount to 20,619,000.
All terms used in this Security that are defined in the Indenture, in
the Amended and Restated Trust Agreement, dated as of June 3, 1997, (as
modified, amended or supplemented from time to time, the "Trust Agreement"),
relating to Triangle Capital Trust (the "Issuer Trust") among the Company, as
Depositor, the Trustees named therein and the Holders from time to time of the
Trust Securities issued pursuant thereto, or in the Registration Rights
Agreement, dated as of May 29, 1997 (the "Registration Rights Agreement"),
among the Company, Triangle Capital Trust and Wheat, First Securities, Inc.,
shall have the meanings assigned to them in the Indenture, the Trust Agreement,
or the Registration Rights Agreement, as the case may be.
The Company has the right to redeem this Security (i) on or after June
1, 2007, in whole at any time or in part from time to time, or (ii) in whole
(but not in part), at any time within 90 days following the occurrence and
during the continuation of a Tax Event, Investment Company Event, or Capital
Treatment Event, in each case at the Redemption Price described below, and
subject to possible regulatory approval.
In the case of a redemption on or after June 1, 2007, the Redemption
Price shall equal the following prices, expressed in percentages of the
principal amount hereof, together with accrued interest to but excluding the
date fixed for redemption, if redeemed during the 12-month period beginning June
1:
<TABLE>
<CAPTION>
Year Redemption Price
<S> <C>
2007 104.69%
2008 104.22%
2009 103.75%
2010 103.28%
2011 102.81%
2012 102.34%
2013 101.88%
2014 101.41%
2015 100.94%
2016 100.47%
</TABLE>
and 100% on or after June 1, 2017.
5
<PAGE> 6
In the case of a redemption on or after June 1, 2007 following a Tax
Event, Investment Company Event or Capital Treatment Event, the Redemption Price
shall equal the Redemption Price then applicable to a redemption under the
preceding paragraph.
In the case of a redemption prior to June 1, 2007 following a Tax
Event, Investment Company Event or Capital Treatment Event in respect of the
Issuer Trust, the Redemption Price shall equal the Make-Whole Amount for a
corresponding $1,000 principal amount hereof, together with accrued interest to
but excluding the date fixed for redemption, which Make-Whole Amount will be
equal to the greater of (i) 100% of the principal amount hereof, and (ii) as
determined by a Quotation Agent (as defined in the Trust Agreement), the sum of
the present values of the principal amount hereof and premium, if any, payable
as part of the Redemption Price with respect to an optional redemption hereof on
June 1, 2007, together with the present values of scheduled payments of interest
from the Redemption Date to June 1, 2007, in each case discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
30-day months) at the Adjusted Treasury Rate (as defined in the Trust
Agreement).
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to the Securities of this series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series may declare the principal amount of all
the Securities of this series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
if upon an Event of Default, the Trustee or such Holders fail to declare the
principal of all the Outstanding Securities of this series to be immediately due
and payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee; and upon any
such declaration the principal amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIII of the Indenture.
6
<PAGE> 7
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest (including Additional Interest) on this Security at the times, place
and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
for such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable, only in registered form
without coupons in denominations of $100,000 and any integral multiple of $1,000
in excess thereof. Securities or portions thereof may be transferred or
exchanged only in principal amounts of not less than $100,000. Any transfer,
exchange or other disposition of Securities in contravention of this Section
3.6(b)(v) shall be deemed to be void and of no legal effect whatsoever, any such
transferee shall be deemed not to be the Holder or owner of any beneficial
interest in such Securities for any purpose, including but not limited to the
receipt of interest payable on such Securities, and such transferee shall be
deemed to have no interest whatsoever in such Securities. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal amount of Securities
of this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agrees that for United States Federal, state and
local tax purposes it is intended that this Security constitute indebtedness.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
THIS SECURITY IS A DIRECT AND UNSECURED OBLIGATION OF THE COMPANY, DOES
NOT EVIDENCE DEPOSITS AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER INSURER OR GOVERNMENT AGENCY.
7
<PAGE> 1
EXHIBIT 5.1
[Triangle Bancorp Letterhead]
October 27, 1997
Board of Directors
Triangle Bancorp, Inc.
4300 Glenwood Avenue
Raleigh, North Carolina 27612
RE: Registration Statement on Form S-4 to Effect
Registration of Triangle Capital Trust Preferred Securities
Ladies and Gentlemen:
I am Senior Vice President and General Counsel of Triangle Bancorp, Inc.
("Bancorp") and in such capacity I am familiar with the issuance and proposed
registration of the New Capital Securities (the "Securities") of Triangle
Capital Trust, the Company's wholly-owned Delaware business trust subsidiary
(the "Trust"). To effect the registration of the Securities, Bancorp and the
Trust will file with the Securities and Exchange Commission a Registration
Statement on Form S-4 (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act").
In my capacity as General Counsel, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Junior
Subordinated Indenture (the "Indenture") dated June 3, 1997 between Bancorp and
Bankers Trust Company (the "Trustee") as trustee for the benefit of holders of
the New Junior Subordinated Debentures (the "Subordinated Debentures") to be
issued by Bancorp and held by the Trust under the Amended and Restated Trust
Agreement (the "Trust Agreement") dated as of June 3, 1997 among Bancorp, the
Trustee, Bankers Trust (Delaware) and administrators of the Trust Agreement, and
the Guarantee from Bancorp in favor of Bankers Trust Company, as Guarantee
Trustee for the benefit of the holders of the Securities (the Indenture, the
Trust Agreement and the Guarantee are herein referred to collectively as the
"Trust Documents"), (ii) the certificate of incorporation and bylaws of Bancorp,
(iii) the corporate resolutions and other records of actions taken by the Board
of Directors of Bancorp pertaining to the Trust and the Trust Documents, (iv)
the Registration Statement, and (v) the relevant provisions of the Securities
Act, Chapter 55 of the North Carolina General Statues, the Bank Holding Company
Act of 1956, as amended, and the regulations promulgated under all of the
aforementioned statutes. In addition, I have made reasonable inquiries of the
officers of Bancorp as to all relevant items. In all examinations of documents,
I have assumed the
<PAGE> 2
Board of Directors
October 27, 1997
Page 2
genuineness of all original documents and all signatures and the conformity to
original documents of all copies submitted to me as certified, conformed or
photostatic copies. Except as defined herein, capitalized terms in this letter
have the meaning given to such terms in the prospectus included in the
Registration Statement.
On the basis of such examination (and subject to the Registration Statement
becoming and remaining effective during the period of exchange transaction
contemplated thereby), I am of the opinion that:
(1) The Subordinated Debentures have been duly and validly authorized and, upon
proper execution, authentication and delivery thereof in accordance with
the Indenture, will constitute the legal, valid, binding and enforceable
obligation of Bancorp, subject to the effects of bankruptcy, fraudulent
conveyance, insolvency, moratorium, reorganization, and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).
(2) The Guarantee has been duly authorized by Bancorp and, upon proper
execution and delivery thereof by Bancorp and assuming due authorization,
execution and delivery by the Guarantee Trustee, will constitute the legal,
valid, binding and enforceable obligation of Bancorp, subject to the
effects of bankruptcy, fraudulent conveyance, insolvency, moratorium,
reorganization, and other similar laws relating to or affecting creditors'
rights generally, and general equitable principles (whether considered in a
proceeding in equity or at law).
I am admitted to the practice of law in the State of North Carolina, and,
accordingly, I do not purport to express any opinion on any laws of any other
jurisdiction other than the laws of the State of North Carolina and the Federal
laws of the United States of America, in each case as such laws are in effect on
the date hereof. For the purposes of the opinion expressed in Paragraphs 1 and 2
above, I have assumed that New York law, which governs the construction and
interpretation of the Guarantee, is the same as North Carolina law as to matters
of execution, validity and enforceability of corporate contracts.
This opinion is furnished by me solely for your benefit in connection with the
transaction described herein and may not be quoted or relied upon by, nor may
copies be delivered to, any other person or entity, or used for any other
purposes, without my prior express written consent. I hereby expressly disclaim
any duty or responsibility to update this opinion or the information upon which
it is based after the date hereof.
<PAGE> 3
Board of Directors
October 27, 1997
Page 3
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and the reference to my name and this opinion in the prospectus which
is a part of the Registration Statement under the caption "Legal Matters".
Very truly yours,
/s/ Alexander M. Donaldson
-----------------------------------------
Alexander M. Donaldson
Senior Vice President and General Counsel
<PAGE> 1
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
October 31, 1997
Triangle Capital Trust
c/o Triangle Bancorp, Inc.
4300 Glenwood Avenue
Raleigh, North Carolina 27612
Re: Triangle Capital Trust
Ladies and Gentlemen:
We have acted as special Delaware counsel for Triangle Capital Trust, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated May 28, 1997 (the
"Certificate"), as filed in the office of the Secretary of
State of the State of Delaware (the "Secretary of State") on
May 28, 1997;
(b) The Trust Agreement of the Trust, dated as of May 28, 1997, as
amended and restated by the Amended and Restated Trust
Agreement of the Trust, dated as of June 3, 1997 (including
Exhibits C and D thereto) (collectively, the "Trust
Agreement"), among Triangle Bancorp, Inc., a North Carolina
corporation (the "Company"), the trustees of the Trust named
therein (collectively, the "Trustees") and the holders, from
time to time, of undivided beneficial interests in the assets
of the Trust;
(c) The Registration Statement (the "Registration Statement") on
Form S-4, including a prospectus with respect to the Company
and the Trust (the "Prospectus"), relating to, among other
things, the 9.375% Capital Securities of the Trust
representing preferred undivided beneficial interests in the
assets of the Trust (each, an "Exchange Security" and
<PAGE> 2
Triangle Capital Trust
October 31, 1997
Page 2
collectively, the "Exchange Securities"), filed by the Company
and the Trust with the Securities and Exchange Commission on
October 31, 1997; and
(d) A Certificate of Good Standing for the Trust, dated October
29, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
an Exchange Security is to be issued by the Trust (collectively, the "Security
Holders") of a certificate for such Exchange Security and the payment for the
Exchange Security acquired by it, in accordance with the Trust Agreement and the
Prospectus, and (vii) that the Exchange Securities are issued and sold to the
Security Holders in accordance with the Trust Agreement and the Prospectus. We
have not participated in the preparation of the Prospectus and assume no
responsibility for its contents.
<PAGE> 3
Triangle Capital Trust
October 31, 1997
Page 3
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. When issued and sold, the Exchange Securities will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of the Trust.
3. The Security Holders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note that the Security Holders may be obligated to
make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
EAM
<PAGE> 1
EXHIBIT 8.1
October 31, 1997
Triangle Bancorp.
Triangle Capital Trust
4300 Glenwood Avenue
Raleigh, North Carolina 27612
Ladies and Gentlemen:
We have acted as special tax counsel to Triangle Bancorp. (the
"Company") in connection with the preparation and filing with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"), of
a Form S-4 Registration Statement (the "Registration Statement"). The
Registration Statement relates to the offer (the "Exchange Offer") by the
Company for all outstanding 9.375% Capital Securities in exchange for registered
9.375% Capital Securities (the "Capital Securities").
This opinion letter relates to the principal material federal income
tax consequences of the Exchange Offer and the ownership and disposition of the
Capital Securities. All capitalized terms used in this opinion letter and not
otherwise defined herein are used as defined in the Registration Statement.
The opinion set forth herein is subject to the assumptions and
conditions set forth in the Registration Statement under the heading "United
States Federal Income Taxation" and is premised on the assumption that all of
the factual information, descriptions, representations and assumptions set
forth or referred to in this letter and in the Registration Statement are
accurate and complete. We have not independently verified any factual matters
relating to the Capital Securities or the Exchange Offer in connection with or
apart from our preparation of this opinion and, accordingly, our opinion does
not take into account any matters not set forth herein which might have been
disclosed by independent verification. We have examined the Registration
Statement and such other documents as
<PAGE> 2
Triangle Bancorp.
Triangle Capital Trust
October 31, 1997
Page 2
we have deemed necessary to render our opinion expressed below. In our
examination of such material, we have relied upon the current and continued
accuracy of the factual matters we have considered, and we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals and the conformity to original documents of all copies of
documents submitted to us. Should any of the facts, circumstances, or
assumptions on which we have relied subsequently be determined to be incorrect
or inaccurate, our conclusions may vary from those set forth below and such
variance could be material.
Based on and subject to the foregoing, and subject to further
qualifications set forth below, it is our opinion that the statements in the
Registration Statement under the caption "certain Federal Income Tax
Considerations," to the extent such statements constitute a summary of
applicable United States federal income tax law, accurately describe the
material United States federal income tax consequences of the Exchange Offer
and the ownership and disposition of the Capital Securities.
This opinion is based upon the Internal Revenue Code of 1986, as
amended, the Treasury regulations promulgated thereunder and other relevant
authorities and law, all as in effect on the date hereof. All of the above are
subject to change or modification by subsequent legislative, regulatory,
administrative or judicial decisions which could adversely affect our opinions.
Consequently, future changes in the law, or administrative or judicial
interpretations thereof, may cause the tax treatment of the transactions
referred to herein to be materially different from that described above.
Other than the specific tax opinion set forth in this letter, no other
opinion has been rendered with respect to the tax treatment of the Exchange
Offer and the ownership and disposition of the Capital Securities, including,
but not limited to, their tax treatment under other provisions of the Code and
the regulations, the tax treatment of any conditions existing at the time of,
or effects resulting from, the Exchange Offer and the ownership and disposition
of the Capital Securities that
<PAGE> 3
Triangle Bancorp.
Triangle Capital Trust
October 31, 1997
Page 3
are not specifically covered by the above opinions, or the tax treatment under
state, local, foreign or any other tax laws.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and the use of our name in the Registration Statement
under the caption "Certain Federal Income Tax Considerations." In giving such
consent, we do not concede that this consent is required under Section 7 of the
Securities Act of 1933.
Very truly yours,
/s/ Arnold & Porter
ARNOLD & PORTER
<PAGE> 1
EXHIBIT 12
calculation of fixed charges
TRIANGLE BANCORP, INC.
RATIOS OF EARNINGS TO FIXED CHARGES
IN THOUSANDS
<TABLE>
<CAPTION>
6/30/97 6/30/96 12/31/96
<S> <C> <C> <C>
Net income before taxes 12,286 8,617 17,481
Fixed Charges
Deposits interest expense 16,765 14,544 30,738
Other borrowings interest expense 1,134 1,107 1,872
Total 17,899 15,651 32,610
Net income before taxes and fixed charges 30,185 24,268 50,091
Net income before taxes and fixed
charges excluding int on deposit 13,420 9,724 19,353
Earnings to Fixed Charges:
Excluding Interest on Deposits 11.83 8.78 10.34
Including Interest on Deposits 1.69 1.55 1.54
</TABLE>
Page 1
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Triangle Bancorp, Inc. on Form S-4 (File No. 333- ) of our report dated
January 20, 1997, on our audits of the consolidated financial statements of
Triangle Bancorp, Inc. as of December 31, 1996 and 1995, and for each of the
three years in the period ended December 31, 1996, which report has been
included in Triangle Bancorp, Inc.'s 1996 Annual Report on Form 10-K, and, our
report dated October 30, 1997 on our audit of the supplemental consolidated
financial statements as of December 31, 1996 and 1995 and for each of the three
years in the period ended December 31, 1996, giving retroactive effect to the
merger consummated October 2, 1997, which report has been included in the Form
8K dated October 31, 1997. We also consent to the reference to our firm under
the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Raleigh, North Carolina
October 31, 1997
<PAGE> 1
EXHIBIT 23.2
The Board of Directors
Triangle Bancorp, Inc.:
We consent to the incorporation herein by reference on Form S-4 of Triangle
Bancorp, Inc. of our report dated February 12, 1997, with respect to the
consolidated balance sheets of Bank of Mecklenburg and subsidiary as of
December 31, 1996 and 1995, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1996, which report appears in the Form 8-K of
Triangle Bancorp, Inc. dated May 23, 1997, and to the reference to our
firm as "Experts."
/S/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Charlotte, North Carolina
October 31, 1997
<PAGE> 1
EXHIBIT 25.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) ___________
==============================
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
=================================
TRIANGLE BANCORP, INC.
(Exact name of obligor as specified in its charter)
NORTH CAROLINA 56-1764546
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
4300 GLENWOOD AVENUE
RALEIGH, NORTH CAROLINA 27612
(Address of principal executive offices) (Zip Code)
TRIANGLE CAPITAL TRUST
9.375% CAPITAL SECURITIES
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority
to which it is subject.
NAME ADDRESS
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
ITEM 3. - 15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of
Bankers Trust Company dated August 7, 1990,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
June 21, 1995 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
March 20, 1996, incorporate by referenced to
Exhibit 1 filed with Form T-1 Statement,
Registration No. 333-25843 and Certificate
of Amendment of the Organization Certificate
of Bankers Trust Company dated June 19,
1997, copy attached.
EXHIBIT 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise corporate
trust powers Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as
amended on February 18, 1997, Incorporated herein
by reference to Exhibit 4 filed with Form T-1
Statement, Registration No. 333-24509-01.
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company
required by Section 321(b) of the Act.
Incorporated herein by reference to Exhibit
4 filed with Form T-1 Statement,
Registration No. 22-18864.
2
<PAGE> 3
EXHIBIT 7 - The latest report of condition of Bankers Trust
Company dated as of June 30, 1997. Copy attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
3
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 20th day
of October, 1997.
BANKERS TRUST COMPANY
By:
----------------------------------
Sandra J. Shaffer
Assistant Vice President
4
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 20th day
of October, 1997.
BANKERS TRUST COMPANY
By: Sandra J. Shaffer
--------------------
Sandra J. Shaffer
5
<PAGE> 6
<TABLE>
<CAPTION>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/97 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS JUNE 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
<S> <C> <C>
SCHEDULE RC--BALANCE SHEET
-----------
C400
----------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------------
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1) ............................... 0081 1,724,000 1.a.
b. Interest-bearing balances(2) ........................................................ 0071 2,648,000 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) .......................... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)......................... 1773 3,990,000 2.b.
3 Federal funds sold and securities purchased under agreements to resell in domestic offices 1350 26,430,000 3.
of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds sold ..................................................................
b. Securities purchased under agreements to resell .....................................
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 17,815,000 4.a.
b. LESS: Allowance for loan and lease losses.................. ..RCFD 3123 23,000 4.b.
c. LESS: Allocated transfer risk reserve ........................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, 4.c.
allowance, and reserve (item 4.a minus 4.b and 4.c) ...................... 2125 17,092,000 4.d.
5. Assets held in trading accounts ............................................... 3545 40,350,000 5.
6. Premises and fixed assets (including capitalized leases) ...................... 2145 937,000 6.
7. Other real estate owned (from Schedule RC-M) .................................. 2150 195,000 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) 2130 96,000 8.
9. Customers' liability to this bank on acceptances outstanding .................. 2155 691,000 9
10 Intangible assets (from Schedule RC-M) ........................................ 2143 85,000 10.
11. Other assets (from Schedule RC-F) ............................................. 2160 4,633,000 11.
12. Total assets (sum of items 1 through 11) ...................................... 2170 98,871,000 12.
</TABLE>
- - ------------------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time rcertificaes of deposit not held in tradining accounts.
6
<PAGE> 7
<TABLE>
<CAPTION>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/97 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State Zip: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
SCHEDULE RC--CONTINUED ------------------------------------
Dollar Amounts in Thousands Bil Mil Thou
- - -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
<S> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) RCON 2200 18,026,000 13.a.
(1) Noninterest-bearing(1) ........................RCON 6631 3,184,000.... 13.a.(1)
(2) Interest-bearing .............................. RCON 6636 14,842,000.... 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E
part II) RCFN 2200 22,173,000 13.b.
(1) Noninterest-bearing ...............................RCFN 6631 1,454,000
(2) Interest-bearing ..................................RCFN 6636 20,719,000 13.b(2)
14. Federal funds purchased and securities sold under agreements to repurchase in 2800 14,623,000 14.
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in
IBFs:
a. Federal funds purchased ........................................................ RCFD 0278 14.
b. Securities sold under agreements to repurchase ................................. RCFD 0279 14.
15. a. Demand notes issued to the U.S. Treasury ....................................... RCON 2840 0 15.a.
b. Trading liabilities ............................................................ RCFD 3548 19,819,000 15.
16. Other borrowed money:
a. With original maturity of one year or less ..................................... RCFD 2332 6,877,000 16.
b. With original maturity of more than one year ................................... A547 217,000 16.
c. With a remaining maturity of more than three years ............................. A548 4,848,000 16.c.
17. Mortgage indebtedness and obligations under capitalized leases ......................
18. Bank's liability on acceptances executed and outstanding ............................ RCFD 2920 691,000 18.
19. Subordinated notes and debentures ................................................... RCFD 3200 1,251,000 19.
20. Other liabilities (from Schedule RC-G) .............................................. RCFD 2930 4,872,000 20.
21. Total liabilities (sum of items 13 through 20) ...................................... RCFD 2948 93,397,000 21.
22. Limited-life preferred stock and related surplus .................................... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ....................................... RCFD 3838 1,000,000 23.
24. Common stock ........................................................................ RCFD 3230 1,001,000 24.
25. Surplus (exclude all surplus related to preferred stock) ............................ RCFD 3839 540,000 25.
26. a. Undivided profits and capital reserves ......................................... RCFD 3632 3,314,000 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ......... RCFD 8434 (3,000) 26.b.
27. Cumulative foreign currency translation adjustments ................................. RCFD 3284 (378,000) 27.
28. Total equity capital (sum of items 23 through 27) ................................... RCFD 3210 5,474,000 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21,
22, and 28) ......................................................................... RCFD 3300 98,871,000 29.
</TABLE>
7
<PAGE> 8
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<CAPTION>
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for Number
the bank by independent external Number auditors as of any date during 1996................... RCFD 6724 N/A | M.1
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit
work accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- - ----------------------
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
State of New York,
BANKING DEPARTMENT
I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated June 19, 1997, providing for an increase in
authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares
with a par value of $10 each designated as Common Stock and 600 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 1,000 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
8
<PAGE> 9
WITNESS, my hand and official seal of the Banking Department at the City of New
York,
this 27TH day of June in the Year of our Lord one thousand nine
hundred and NINETY-SEVEN.
Manuel Kursky
------------------------------
Deputy Superintendent of Banks
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is hereby amended to
increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
III. The amount of capital stock which the corporation is hereafter to have
is One Billion, Six Hundred and One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into One
Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 600 shares with a par value of One Million Dollars ($1,000,000)
each designated as Series Preferred Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six
Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred Million,
One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (100,166,667)
shares with a par value of $10 each designated as Common Stock and 1000
shares with a par value of One Million Dollars ($1,000,000) each designated
as Series Preferred Stock."
5. The foregoing amendment of the organization certificate was authorized
by unanimous written consent signed by the holder of all outstanding shares
entitled to vote thereon.
9
<PAGE> 10
IN WITNESS WHEREOF, we have made and subscribed this certificate this
19th day of June, 1997.
James T. Byrne, Jr.
--------------------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
--------------------------------
Lea Lahtinen
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows the
contents thereof, and that the statements herein contained are true.
Lea Lahtinen
--------------
Lea Lahtinen
Sworn to before me this 19th
day of June, 1997.
Sandra L. West
- - -----------------------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101
Qualified in New York County
Commission Expires September 19, 1998
10
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
TRIANGLE CAPITAL TRUST
OFFER TO EXCHANGE ITS
9.375% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
9.375% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
PURSUANT TO THE PROSPECTUS DATED .
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997 UNLESS THE OFFER IS EXTENDED.
TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
BANKERS TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Mail:
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Corporate Trust and Agency Corporate Trust and Agency Corporate Trust and Agency
Group Group Group
Reorganization Unit Receipt and Delivery Window Reorganization Unit
P.O. Box 292737 123 Washington Street, 1st 648 Grassmere Park Road
Nashville, TN 37229-2737 Floor Nashville, TN 37211
New York, NY 10006
</TABLE>
For Information Call:
(800) 735-7777
Confirm: (615) 835-3572
Facsimile: (615) 835-3701
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY
BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE SAME MEANING
GIVEN THEM IN THE PROSPECTUS (AS DEFINED BELOW). YOU ARE ENCOURAGED TO REVIEW
THE SECTION ENTITLED "CERTAIN DEFINED TERMS" IN THE PROSPECTUS.
The undersigned acknowledges that he or she has received the Prospectus,
dated , 1997 (as the same may be amended or supplemented from time to
time, the "Prospectus"), of Triangle Bancorp, Inc., a North Carolina corporation
(the "Company"), and Triangle Capital Trust, a Delaware business trust (the
"Issuer Trust"), and this Letter of Transmittal, which together constitute the
Company's and the Issuer Trust's offer (the "Exchange Offer") to exchange an
aggregate liquidation amount of up to $20,000,000 of the Issuer Trust's 9.375%
Capital Securities (the "Old Capital Securities") for a like aggregate
liquidation amount of the Issuer Trust's 9.375% Capital Securities (the "New
Capital Securities") which have been registered under the Securities Act of 1933
(the "Securities Act").
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE> 2
Holders of Old Capital Securities whose certificates (the "Certificates")
for such Old Capital Securities are not immediately available or who cannot
deliver their Certificates and all other required documents to the Exchange
Agent on or prior to the Expiration Date (as defined in the Prospectus) or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Old Capital Securities according to the guaranteed delivery
procedures set forth in "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned has completed the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.
ALL TENDERING HOLDERS COMPLETE THIS BOX
- - -------------------------------------------------------------------------------
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
Name(s) and Address(es) of Registered Holder(s):
(Please fill in, if blank)
Certificate Number(s)*
Aggregate Liquidation Amount of Old Capital Securities
Liquidation Amount of Old Capital Securities Tendered**
Total Amount Tendered:
------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in denominations
of $100,000 and integral multiples of $1,000 in excess thereof, provided
that if any Old Capital Securities are tendered for exchange in part, the
untendered principal amount thereof must be $100,000 or any integral
multiple of $1,000 in excess thereof. All Old Capital Securities held shall
be deemed tendered unless a lesser number is specified in this column.
- - -------------------------------------------------------------------------------
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
---------------------------------------------
DTC Account Number:
---------------------------------------------
Transaction Code Number:
---------------------------------------------
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name of Registered Holders(s):
---------------------------------------------
Window Ticket Number (if any):
---------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
------------------------
Name of Institution which Guaranteed Delivery:
-----------------------------
2
<PAGE> 3
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution: ____________________________________________
DTC Account Number: _______________________________________________________
Transaction Code Number: __________________________________________________
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL SECURITIES ARE TO BE RETURNED
BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name: ______________________________________________________________________
Address: __________________________________________________________________
3
<PAGE> 4
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company and the Issuer Trust the above
described aggregate liquidation amount of Old Capital Securities in exchange for
a like aggregate liquidation amount of New Capital Securities.
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Issuer Trust all right, title and interest in and to such Old
Capital Securities as are being tendered herewith. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent as its agent and
attorney-in-fact (with full knowledge that the Exchange Agent is also acting as
agent of the Company and the Issuer Trust in connection with the Exchange Offer)
with respect to the tendered Old Capital Securities, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), subject only to the right of withdrawal described in
the Prospectus, to: (i) deliver Certificates for Old Capital Securities to the
Company or the Issuer Trust together with all accompanying evidences of transfer
and authenticity to, or upon the order of, the Issuer Trust, upon receipt by the
Exchange Agent, as the undersigned's agent, of the New Capital Securities to be
issued in exchange for such Old Capital Securities; (ii) present Certificates
for such Old Capital Securities for transfer, and to transfer the Old Capital
Securities on the books of the Issuer Trust; and (iii) receive for the account
of the Issuer Trust all benefits and otherwise exercise all rights of beneficial
ownership of such Old Capital Securities, all in accordance with the terms and
conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE ISSUER TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE COMPANY, THE ISSUER TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT
AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED
WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. THE
UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Capital
Securities tendered hereby should be printed above, if they are not already set
forth above, as they appear on the Certificates representing such Old Capital
Securities. The Certificate number(s) and the Old Capital Securities that the
undersigned wishes to tender should be indicated in the appropriate boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates for
such nonexchanged or nontendered Old Capital Securities will be returned (or, in
the case of Old Capital Securities tendered by book-entry transfer, such Old
Capital Securities will be credited to an account maintained at DTC), without
expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities pursuant
to any one of the procedures described in "The Exchange Offer -- Procedures for
Tendering Old Capital Securities" in the Prospectus and in the instructions
attached hereto will, upon the Company's and the Issuer Trust's acceptance for
exchange of such tendered Old Capital Securities, constitute a binding agreement
among the undersigned, the Company and the Issuer Trust upon the terms and
subject to the conditions of the Exchange Offer. The undersigned recognizes
that, under certain circumstances set forth in the Prospectus, the Company and
the Issuer Trust may not be required to accept for exchange any of the Old
Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, that such New Capital Securities
be credited to the account indicated above maintained at DTC. If applicable,
substitute Certificates representing Old Capital Securities not exchanged or not
accepted for exchange will be issued to the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, will be credited to the account
indicated above maintained at DTC. Similarly, unless otherwise indicated under
"Special
4
<PAGE> 5
Delivery Instructions," please deliver New Capital Securities to the undersigned
at the address shown below the undersigned's signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (A) THE
UNDERSIGNED IS NOT AN "AFFILIATE" OF TRIANGLE BANCORP, INC. OR THE ISSUER TRUST,
(B) ANY NEW CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED ARE BEING
ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (C) THE UNDERSIGNED HAS NO
ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE
RECEIVED IN THE EXCHANGE OFFER, AND (D) IF THE UNDERSIGNED IS NOT A
BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE
IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW
CAPITAL SECURITIES. BY TENDERING OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE
OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD CAPITAL
SECURITIES WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH
CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION
FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (X)
SUCH OLD CAPITAL SECURITIES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A
NOMINEE, OR (Y) SUCH OLD CAPITAL SECURITIES WERE ACQUIRED BY SUCH BROKER-DEALER
FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM
TIME TO TIME) IN CONNECTION WITH ANY RESALE OF SUCH NEW CAPITAL SECURITIES
(PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH
BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE
MEANING OF THE SECURITIES ACT).
THE UNDERSIGNED ACKNOWLEDGES THAT THIS EXCHANGE OFFER IS BEING MADE BY THE
COMPANY AND THE ISSUER TRUST BASED UPON THE COMPANY'S AND ISSUER TRUST'S
UNDERSTANDING OF AN INTERPRETATION BY THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION") AS SET FORTH IN NO-ACTION LETTERS ISSUED TO THIRD
PARTIES, THAT THE NEW CAPITAL SECURITIES ISSUED IN EXCHANGE FOR OLD CAPITAL
SECURITIES BY HOLDERS THEREOF (OTHER THAN TO HOLDERS THAT ARE "AFFILIATES" OF
THE COMPANY OR THE ISSUER TRUST WITHIN THE MEANING OF RULE 405 UNDER THE
SECURITIES ACT), MAY BE SO ISSUED WITHOUT COMPLIANCE WITH THE REGISTRATION AND
PROSPECTUS DELIVERY PROVISIONS OF THE SECURITIES ACT, PROVIDED THAT: (i) SUCH
HOLDERS ARE NOT AFFILIATES OF THE COMPANY OR THE ISSUER TRUST WITHIN THE MEANING
OF RULE 405 UNDER THE SECURITIES ACT; (ii) SUCH NEW CAPITAL SECURITIES ARE
ACQUIRED IN THE ORDINARY COURSE OF SUCH HOLDERS' BUSINESS; AND (iii) SUCH
HOLDERS ARE NOT ENGAGED IN, AND DO NOT INTEND TO ENGAGE IN, A DISTRIBUTION OF
SUCH NEW CAPITAL SECURITIES AND HAVE NO ARRANGEMENT OR UNDERSTANDING WITH ANY
PERSON TO PARTICIPATE IN THE DISTRIBUTION OF SUCH NEW CAPITAL SECURITIES.
HOWEVER, THE STAFF OF THE COMMISSION HAS NOT CONSIDERED THE EXCHANGE OFFER IN
THE CONTEXT OF A NO-ACTION LETTER AND THERE CAN BE NO ASSURANCE THAT THE STAFF
OF THE COMMISSION WOULD MAKE A SIMILAR DETERMINATION WITH RESPECT TO THE
EXCHANGE OFFER AS IN OTHER CIRCUMSTANCES. IF A HOLDER OF OLD CAPITAL SECURITIES
IS AN AFFILIATE OF THE COMPANY, OR IS ENGAGED IN OR INTENDS TO ENGAGE IN A
DISTRIBUTION OF THE NEW CAPITAL SECURITIES OR HAS ANY ARRANGEMENT OR
UNDERSTANDING WITH RESPECT TO THE DISTRIBUTION OF THE NEW CAPITAL SECURITIES TO
BE ACQUIRED PURSUANT TO THE EXCHANGE OFFER, SUCH HOLDER COULD NOT RELY ON THE
APPLICABLE INTERPRETATIONS OF THE STAFF OF THE COMMISSION AND MUST COMPLY WITH
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT IN
CONNECTION WITH ANY SECONDARY RESALE TRANSACTION.
THE COMPANY AND THE ISSUER TRUST HAVE AGREED THAT, SUBJECT TO THE
PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING
BROKER-DEALER (AS DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW CAPITAL
SECURITIES RECEIVED IN EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD
CAPITAL SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN
ACCOUNT AS A RESULT OF
5
<PAGE> 6
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING NINETY
(90) DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED
CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW
CAPITAL SECURITIES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN
THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD CAPITAL SECURITIES FOR ITS OWN
ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD CAPITAL SECURITIES AND
EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM
THE COMPANY OR THE ISSUER TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY
OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN
THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO
OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES
UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER
EVENTS SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING
BROKER-DEALER WILL SUSPEND THE SALE OF NEW CAPITAL SECURITIES PURSUANT TO THE
PROSPECTUS UNTIL (A) THE COMPANY AND THE ISSUER TRUST HAVE AMENDED OR
SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAVE
FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING
BROKER-DEALER OR (B) THE COMPANY OR THE ISSUER TRUST HAS GIVEN NOTICE THAT THE
SALE OF THE NEW CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY BE. IF THE
COMPANY OR THE ISSUER TRUST GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE NEW
CAPITAL SECURITIES, IT SHALL EXTEND THE NINETY (90) DAY PERIOD REFERRED TO ABOVE
DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN
CONNECTION WITH THE RESALE OF NEW CAPITAL SECURITIES BY THE NUMBER OF DAYS
DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO
AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED
COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF
THE NEW CAPITAL SECURITIES OR TO AND INCLUDING THE DATE ON WHICH THE COMPANY OR
THE ISSUER TRUST HAS GIVEN NOTICE THAT THE SALE OF NEW CAPITAL SECURITIES MAY BE
RESUMED, AS THE CASE MAY BE.
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the last Distribution Payment Date to
which Distributions have been paid or duly provided for on such Old Capital
Securities prior to the original issue date of the New Capital Securities or, if
no such Distributions have been paid or duly provided for, will not receive any
accumulated Distributions on such Old Capital Securities, and the undersigned
waives the right to receive any Distributions on such Old Capital Securities
accumulated from and after such Distribution Payment Date or, if no such
Distributions have been paid or duly provided for, from and after June 3, 1997.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD CAPITAL
SECURITIES" ABOVE AND BY SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED
THE OLD CAPITAL SECURITIES AS SET FORTH IN SUCH BOX. HOLDER(S) SIGN HERE (SEE
INSTRUCTIONS 2, 5 AND 6) (PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 13) (NOTE:
SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2):
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Capital Securities hereby tendered or on a security
position listing, or by any person(s) authorized to become the registered
holder(s) by endorsements and documents transmitted herewith (including such
opinions of counsel, certifications and other information as may be required by
the Issuer Trust or the Exchange Agent for the Old Capital Securities to comply
with the restrictions on transfer applicable to the Old Capital Securities). If
signature is by an attorney-in-fact, executor,
6
<PAGE> 7
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary capacity or representative capacity, please set forth the signer's
full title. See Instruction 5.
________________________________________________________________________________
________________________________________________________________________________
(SIGNATURE(S) OF HOLDER(S))
Date: _________________________________________________________________________
Name(s): ______________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: ______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: _______________________________________________
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBERS(S))
GUARANTEE OF SIGNATURE(S)(SEE INSTRUCTIONS 2 AND 5):
________________________________________________________________________________
(AUTHORIZED SIGNATURE)
Date: ___________________________________________________________________, 1997
Name of Firm: _________________________________________________________________
Capacity (full title): ________________________________________________________
(PLEASE PRINT)
Address: ______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: _______________________________________________
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBERS(S))
7
<PAGE> 8
SPECIAL ISSUANCE INSTRUCTIONS: (SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if New Capital Securities or Old Capital Securities that
are not tendered are to be issued in the name of someone other than the
registered holder(s) of the Old Capital Securities whose name(s) appear(s)
above.
Issue
[ ] Old Capital Securities not tendered to:
[ ] New Capital Securities, to:
Address: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: _______________________________________________
________________________________________________________________________________
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBERS(S))
SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5 AND 6):
To be completed ONLY if New Capital Securities or Old Capital Securities that
are not tendered are to be sent to someone other than the registered holder(s)
of the Old Capital Securities whose name(s) appear(s) above, or such registered
holder(s) at an address other than that shown above.
Mail
[ ] Old Capital Securities not tendered to:
[ ] New Capital Securities, to:
Address: ______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBERS(S))
8
<PAGE> 9
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth in "The Exchange
Offer -- Procedures for Tendering Old Capital Securities" in the Prospectus.
Certificates, or timely book-entry confirmation of a book-entry transfer of such
Old Capital Securities into the Exchange Agent's account at DTC, as well as this
Letter of Transmittal (or facsimile thereof) or an Agent's Message, properly
completed and duly executed, with any required signature guarantees, and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent at its address set forth herein on or prior to the Expiration
Date. The term "book-entry confirmation" means a timely written confirmation
from DTC of book-entry transfer of Old Capital Securities into the Exchange
Agent's account at DTC. Old Capital Securities may be tendered in whole or in
part in the principal amount of $100,000 (100 Capital Securities) and integral
multiples of $1,000 in excess thereof, provided that, if any Old Capital
Securities are tendered for exchange in part, the untendered principal amount
thereof must be $100,000 (100 Capital Securities) or any integral multiple of
$1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and (i) whose Old
Capital Securities are not immediately available or (ii) who cannot deliver
their Old Capital Securities, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or (iii) who
cannot complete the procedures for delivery by book-entry transfer on a timely
basis, may tender their Old Capital Securities by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus. Pursuant to such procedures: (a) such
tender must be made by or through an Eligible Institution (as defined below);
(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Company, must be received by the
Exchange Agent on or prior to the Expiration Date; and (c) the Certificates (or
a book-entry confirmation (as defined in the Prospectus)) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
Letter of Transmittal (or facsimile thereof) or an Agent's Message, properly
completed and duly executed, with any required signature guarantees and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent within five New York Stock Exchange, Inc. trading days after the
date of execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer -- Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or
prior to the Expiration Date. As used herein and in the Prospectus, "Eligible
Institution" means a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as "an eligible guarantor institution," including (as such terms
are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association. THE METHOD OF DELIVERY OF CERTIFICATES, THIS
LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE
RISK OF THE TENDERING HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE
IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Neither the Company nor the Issuer Trust will accept any alternative,
conditional or contingent tenders. Each tendering holder, by execution of a
Letter of Transmittal (or facsimile thereof), waives any right to receive any
notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any participant
in DTC whose name appears on a security position listing as the owner of
the Old Capital Securities) of Old Capital Securities tendered herewith,
unless such holder(s) has completed either the box entitled "Special
Issuance Instructions" or the box entitled "Special Delivery Instructions"
above; or
(ii) such Old Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
9
<PAGE> 10
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the Certificate number(s)
and/or the principal amount of Old Capital Securities and any other required
information should be listed on a separate signed schedule which is attached to
this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital Securities
will be accepted only in the principal amount of $100,000 (100 Capital
Securities) and integral multiples of $1,000 in excess thereof, provided that if
any Old Capital Securities are tendered for exchange in part, the untendered
principal amount thereof must be $100,000 (100 Capital Securities) or any
integral multiple of $1,000 in excess thereof. If less than all the Old Capital
Securities evidenced by any Certificate submitted are to be tendered, fill in
the principal amount of Old Capital Securities which are to be tendered in the
box entitled "Principal Amount of Old Capital Securities Tendered (if less than
all)." In such case, new Certificate(s) for the remainder of the Old Capital
Securities that were evidenced by your old Certificate(s) will only be sent to
the holder of the Old Capital Security, promptly after the Expiration Date
unless the appropriate boxes on this Letter of Transmittal are completed. All
Old Capital Securities represented by Certificates delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in the
Prospectus on or prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Old Capital Securities to
be withdrawn, the aggregate liquidation amount of Old Capital Securities to be
withdrawn, and (if Certificates for Old Capital Securities have been tendered)
the name of the registered holder of the Old Capital Securities as set forth on
the Certificate for the Old Capital Securities, if different from that of the
person who tendered such Old Capital Securities. If Certificates for the Old
Capital Securities have been delivered or otherwise identified to the Exchange
Agent, then prior to the physical release of such Certificates for the Old
Capital Securities, the tendering holder must submit the serial numbers shown on
the particular Certificates for the Old Capital Securities to be withdrawn and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been tendered
pursuant to the procedures for book-entry transfer set forth in "The Exchange
Offer -- Procedures for Tendering Old Capital Securities," the notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawal of Old Capital Securities, in which case a notice of
withdrawal will be effective if delivered to the Exchange Agent by written or
facsimile transmission. Withdrawals of tenders of Old Capital Securities may not
be rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer -- Procedures
for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company and the
Issuer Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Company and the Issuer Trust, any affiliates or
assigns of the Company and the Issuer Trust, the Exchange Agent or any other
person shall not be under any duty to give any notification of any
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification. Any Old Capital Securities which have been tendered
but which are withdrawn on or prior to the Expiration Date will be returned to
the holder thereof without cost to such holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Capital Securities tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Capital Securities are registered in different name(s)
on several Certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons
10
<PAGE> 11
should so indicate when signing and must submit proper evidence satisfactory to
the Company and the Issuer Trust, in their sole discretion, of each such
person's authority to so act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Old Capital Securities listed and transmitted hereby, no endorsement(s) of
Certificate(s) or separate bond power(s) are required unless New Capital
Securities are to be issued in the name of a person other than the registered
holder(s). Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Capital Securities listed, the Certificates must
be endorsed or accompanied by appropriate bond powers, signed exactly as the
name or names of the registered owner(s) appear(s) on the Certificates, and also
must be accompanied by such opinions of counsel, certifications and other
information as the Company, the Issuer Trust or the Exchange Agent may require
in accordance with the restrictions on transfer applicable to the Old Capital
Securities. Signatures on such Certificates or bond powers must be guaranteed by
an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Capital Securities
are to be issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Capital Securities are to be sent to someone other than
the signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Capital Securities not exchanged will be returned by mail
or, if tendered by book-entry transfer, by crediting the account indicated above
maintained at DTC unless the appropriate boxes on this Letter of Transmittal are
completed. See Instruction 4.
7. IRREGULARITIES. The Company and the Issuer Trust will determine, in
their sole discretion, all questions as to the form of documents, validity,
eligibility (including time of receipt) and acceptance for exchange of any
tender of Old Capital Securities, which determination shall be final and binding
on all parties. The Company and the Issuer Trust reserve the absolute right to
reject any and all tenders determined by either of them not to be in proper form
or the acceptance of which, or exchange for, may, in the view of counsel to the
Company and the Issuer Trust, be unlawful. The Company and the Issuer Trust also
reserve the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer set forth in the Prospectus under "The Exchange
Offer -- Conditions to the Exchange Offer" or any conditions or irregularity in
any tender of Old Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
The Company's and the Issuer Trust's interpretation of the terms and conditions
of the Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Old Capital Securities will be
deemed to have been validly made until all irregularities with respect to such
tender have been cured or waived. The Company, the Issuer Trust, any affiliates
or assigns of the Company, the Issuer Trust, the Exchange Agent, or any other
person shall not be under any duty to give notification of any irregularities in
tenders or incur any liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at its address and
telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a holder whose tendered Old Capital Securities are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on the Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Old Capital
Securities exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60-day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
11
<PAGE> 12
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the transfers
attached to, or endorsed on, the Old Capital Securities. If the Old Capital
Securities are registered in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. The Company and the Issuer Trust reserve the
absolute right to waive satisfaction of any or all conditions enumerated in the
Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Old Capital
Securities, by execution and delivery of this Letter of Transmittal, shall waive
any right to receive notice of the acceptance of their Old Capital Securities
for exchange.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
13. SECURITY TRANSFER TAXES. Holders who tender their Old Capital
Securities for exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, New Capital Securities are to be delivered
to, or are to be issued in the name of, any person other than the registered
holder of the Old Capital Securities tendered, or if a transfer tax is imposed
for any reason other than the exchange of Old Capital Securities in connection
with the Exchange Offer, then the amount of any such transfer tax (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
12
<PAGE> 13
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS (SEE INSTRUCTION 9)
- - --------------------------------------------------------------------------------
PAYER'S NAME: BANKERS TRUST COMPANY
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN ON Social Security Number
THE LINE AT RIGHT AND CERTIFY BY ----------------------------------
FORM W-9 SIGNING AND DATING BELOW. OR
----------------------------------
Employer Identification Number
------------------------------------------------------------------------------------------
PART 2 -- CERTIFICATION -- Under penalties of perjury, I certify that:
DEPARTMENT OF THE TREASURY (1) the number shown on this form is my correct taxpayer identification number (or I am
INTERNAL REVENUE SERVICE waiting for a number to be issued to me);
(2) I am not subject to backup withholding either because (i) I am exempt from backup
withholding, (ii) I have not been notified by the Internal Revenue Service ("IRS") that I am
subject to backup withholding as a result of a failure to report all interest or dividends,
or (iii) the IRS has notified me that I am no longer subject to backup withholding, and
(3) any other information provided on this form is true and correct.
------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
PAYER'S REQUEST FOR CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in PART 3 --
TAXPAYER IDENTIFICATION NUMBER Part 2 above if you have been notified by the IRS that you are AWAITING TIN [ ]
(TIN) AND CERTIFICATION subject to backup withholding because of underreporting
interest or dividends on your tax return and you have not
been notified by the IRS that you are no longer subject to
backup withholding.
SIGNATURE _______________________ DATE ______________, 1997
___________________________________________________________
NAME (PLEASE PRINT)
</TABLE>
- - --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO
THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (i) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (ii)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments made to me on account of the New Capital Securities shall be
retained until I provide a taxpayer identification number to the Exchange Agent
and that, if I do not provide my taxpayer identification number within 60 days,
such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and 31% of all reportable payments made to me thereafter will
be withheld and remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
_______________________________________ ______________________________, 1997
SIGNATURE DATE
______________________________________
NAME (PLEASE PRINT)
13
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY FOR TENDER OF ANY AND ALL OF THE OUTSTANDING
9.375% CAPITAL SECURITIES (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) OF
TRIANGLE CAPITAL TRUST FULLY AND UNCONDITIONALLY GUARANTEED BY TRIANGLE BANCORP,
INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Issuer Trust's (as defined below) 9.375% Capital Securities
(the "Old Capital Securities") are not immediately available, (ii) Old Capital
Securities, the Letter of Transmittal and all other required documents cannot be
delivered to Bankers Trust Company (the "Exchange Agent") on or prior to the
Expiration Date (as defined in the Prospectus referred to below) or (iii) the
procedures for delivery by book-entry transfer cannot be completed on a timely
basis. This Notice of Guaranteed Delivery may be delivered by hand, overnight
courier or mail, or transmitted by facsimile transmission, to the Exchange Agent
on or prior to the Expiration Date. See "The Exchange Offer -- Procedures for
Tendering Old Capital Securities" in the Prospectus. In addition, in order to
utilize the guaranteed delivery procedure to tender Old Capital Securities
pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal relating to the Old Capital Securities (or facsimile thereof) must
also be received by the Exchange Agent prior to 5:00 p.m., New York City time,
on the Expiration Date.
Capitalized terms used but not defined herein have the meanings given them
in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
BANKERS TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Mail:
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Corporate Trust and Agency Corporate Trust and Agency Corporate Trust and Agency
Group Group Group
Reorganization Unit Receipt and Delivery Window Reorganization Unit
P.O. Box 292737 123 Washington Street, 1st 648 Grassmere Park Road
Nashville, TN 37229-2737 Floor Nashville, TN 37211
New York, NY 10006
</TABLE>
For Information Call:
(800) 735-7777
Confirm: (615) 835-3572
Facsimile: (615) 835-3701
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Triangle Capital Trust, a Delaware
business trust (the "Issuer Trust"), upon the terms and subject to the
conditions set forth in the Prospectus dated , 1997 (as the same may
be amended or supplemented from time to time, the "Prospectus"), and the related
Letter of Transmittal (which together constitute the "Exchange Offer"), receipt
of which is hereby acknowledged, the aggregate liquidation amount of Old Capital
Securities set forth below pursuant to the guaranteed delivery procedures set
forth in the Prospectus under the caption "The Exchange Offer -- Procedures for
Tendering Old Capital Securities."
<TABLE>
<S> <C>
Aggregate Liquidation All authority herein conferred or agreed to be conferred
Amount Tendered: $ _____________________________________ in this Notice of Guaranteed Delivery shall survive the
Name(s) of death, incapacity or dissolution of the undersigned and
Registered any obligation of the undersigned hereunder shall be
Holder(s): _____________________________________________ binding upon the heirs, executors, administrators,
________________________________________________________ personal representatives, trustees in bankruptcy, legal
Certificate No(s)(if available): _______________________ representatives, successors and assigns of the
________________________________________________________ undersigned.
Total Liquidation Amount PLEASE SIGN HERE:
represented by Old Capital --------------------------------------------------------
Securities Certificate(s): $ ___________________________ --------------------------------------------------------
If Old Capital Securities will be tendered by book-entry (Signature(s) of Owner(s)
transfer, provide the following information: or Authorized Signatory)
DTC Account Number: ____________________________________ __________________________________________________, 1997
Date: ___________________________________________ , 1997 __________________________________________________, 1997
Area Code and
telephone number: ______________________________________
</TABLE>
Must be signed by the holder(s) of the Old Capital Securities exactly as
their name(s) appear(s) on certificate(s) for the Old Capital Securities or on
a security position listing, or by person(s) authorized to become registered
holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by an attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or other person
acting in a fiduciary or representative capacity, please set forth the
signer's full title. Please print name(s) and address(es)
Names:
-----------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Capacity:
--------------------------------------------------------------------
Address:
--------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE> 3
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii)
a broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker or government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association
or clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing
being referred to as an "Eligible Institution"), hereby guarantees to deliver
to the Exchange Agent, at one of its addresses set forth above, either the Old
Capital Securities tendered hereby in proper form for transfer, or
confirmation of the book-entry transfer of such Old Capital Securities to the
Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to
the procedures for book-entry transfer set forth in the Prospectus, in either
case together with one or more properly completed and duly executed Letter(s)
of Transmittal (or facsimile thereof) and any other required documents within
five business days after the date of execution of this Notice of Guaranteed
Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal (or facsimile thereof) and the Old Capital Securities tendered
hereby to the Exchange Agent within the time period set forth above and that
failure to do so could result in a financial loss to the undersigned.
<TABLE>
<C> <C>
-------------------------------------------------------- --------------------------------------------------------
Name of Firm Authorized Signature
-------------------------------------------------------- Name: __________________________________________________
Address (Please Type or Print)
-------------------------------------------------------- Title: _________________________________________________
(Zip code)
Date: ____________________________________________, 1997
--------------------------------------------------------
Area code and telephone number
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS NOTICE
OF GUARANTEED DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE
PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
<PAGE> 1
EXHIBIT 99.3
BANKERS TRUST COMPANY
EXCHANGE AGENT AGREEMENT
Bankers Trust Company
Corporate Trust and
Agency Group
Four Albany Street, 4th Floor
New York, NY 10006
Attention: Corporate Market Services
Ladies and Gentlemen:
Triangle Capital Trust (the "Issuer Trust"), a statutory business trust
created under the laws of the State of Delaware, together with Triangle
Bancorp, Inc., a North Carolina corporation (the "Company"), is offering to
exchange (the "Exchange Offer") up to $20,000,000 aggregate liquidation amount
of its 9.375% Capital Securities (the "New Capital Securities") for an equal
principal amount of its outstanding 9.375% Capital Securities (the "Old Capital
Securities"), of which $20,000,000 aggregate liquidation amount is outstanding
(the "New Capital Securities" and the "Old Capital Securities" are collectively
referred to herein as the "Capital Securities"), pursuant to a prospectus (the
"Prospectus") included in the Company's Registration Statement on Form S-4
(File No._____________________________) as amended (the "Registration
Statement"), filed with the Securities and Exchange Commission (the "SEC").
The Term "Expiration Date" shall mean 5:00 p.m., New York City time, on
______________________, 1997, unless the Exchange Offer is extended as provided
in the Prospectus, in which case the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is extended. Upon execution
of this Agreement, Bankers Trust Company will act as the Exchange Agent for the
Exchange Offer (the "Exchange Agent"). Capitalized terms used and not
otherwise defined herein shall have the respective meanings ascribed thereto in
the Prospectus.
A copy of each of the form of letter of transmittal (the "Letter of
Transmittal"), the form of the notice of guaranteed delivery (the "Notice of
Guaranteed Delivery"), the form of letter to brokers and the form of letter of
clients (collectively, the "Tender Documents") to be used by Holders of Old
Capital Securities in order to receive New Notes pursuant to the Exchange Offer
are attached hereto as Exhibit B.
The Company hereby appoints you to act as Exchange Agent in connection
with the Exchange Offer. In carrying out your duties as Exchange Agent, you
are to act in accordance with the following provisions of this Agreement:
1. You are to mail the Prospectus and the Tender Documents to all of the
Holders and participants on the day that you are notified by the Company that
the Registration Statement has become effective under the Securities Act of
1933, as amended, or as soon as practicable thereafter, and to make subsequent
mailings thereof the date thereof and to any persons who become Holders prior
to the Expiration Date and to any persons as may from time to time be
<PAGE> 2
requested by the Company. All mailings pursuant to this Section 1 shall be
by first class mail, postage prepaid, unless otherwise specified by the
Company. You shall also accept and comply with telephone requests for
information relating to the Exchange Offer provided that such information shall
relate only to the procedures for tendering Old Capital Securities in (or
withdrawing tenders of Old Capital Securities from) the Exchange Offer provided
that such information shall relate only to the procedures for tendering Old
Capital Securities in (or withdrawing tenders of Old Capital Securities from)
the Exchange Offer. All other requests for information relating to the
Exchange Offer shall be directed to the Company, Attention:
2. You are to examine Letters of Transmittal and the Old Capital
Securities and other documents delivered or mailed to you, by or for the
Holders, prior to the Expiration Date, to ascertain whether (i) the Letters of
Transmittal are properly executed and completed in accordance with the
instructions set forth therein, (ii) the Old Capital Securities are in proper
form for transfer and (iii) all other documents submitted to you are in proper
form. In each case where a Letter of Transmittal or other document has been
improperly executed or completed or , for any other reason, is not in proper
form, or some other irregularity exists, you are authorized to endeavor to take
such action as you consider appropriate to notify the tendering Holder of such
irregularity and as to the appropriate means of resolving the same.
Determination of questions as to the proper completion or execution of the
Letters of Transmittal , or as to the proper form for transfer of the Old
Capital Securities or as to any other irregularity in connection with the
submission of Letters of Transmittal and/or Old Capital Securities and other
documents in connection with the Exchange offer, shall be made by the officers
of, or counsel for, the Company at their written instructions or oral direction
confirmed by facsimile. Any determination made by the Company on such
questions shall be final and binding.
3. At the written request of the Company or its counsel,
___________________ , you shall notify tendering Holders of Old Capital
Securities in the event of any such termination, you will return all tendered
Old Capital Securities to the persons entitled thereto, at the request and
expense of the Company.
4. Tender of the Old Capital Securities may be made only as set froth in
the Letter of Transmittal. Notwithstanding the foregoing, tenders which the
Company shall approve in writing as having been properly delivered shall be
considered to be properly tendered. Letters of Transmittal and Notices of
Guaranteed Delivery shall be recorded by you as to the date and time of receipt
and shall be preserved and retained by you at the Company's expense for six
years. New Capital Securities are to be issued in exchange for Old Capital
Securities pursuant to the Exchange Offer only (i) against deposit with you
prior to the Expiration Date or, in the case of a tender in accordance with
the guaranteed delivery procedures outlined in Instruction 5 of the Letter of
Transmittal, within three New York Stock Exchange trading days after the
Expiration Date of the Exchange Offer, together with executed Letters of
Transmittal and other documents required by the Exchange Offer or (ii) in the
event that the Holder is a participant in the Depositary Trust Company ("DTC"
system, by the utilization of DTC's Automated Tender Offer Program ("ATOP") and
any evidence required by the Exchange Offer.
-2-
<PAGE> 3
You are hereby directed to establish an account with respect to the
Capital Securities at The Depositary Trust Company (the "Book Entry Transfer
Facility") within two days after the date hereof in accordance with SEC
Regulation 240.17 Ad. Any financial institution that is a participant in the
Book Entry Transfer Facility system may, until the Expiration Date, make
book-entry delivery of the Shares by causing the Book Entry Facility to
transfer such Capital Securities into your account in accordance with the
procedure for such transfer established by the Book Entry Transfer Facility.
In every case, however, a Letter of Transmittal (or a manually executed
facsimile thereof), or an Agent's Message, properly completed and duly
executed, with any required signature guarantees and any other required
documents must be transmitted to and received by you prior to the Expiration
Date or the guaranteed delivery procedures described in the Offer must be
complied with.
5. Upon oral or written request of the Company (with written
confirmation of any such oral request thereafter), you will transmit by
telephone, and promptly thereafter confirm in writing to __________________ or
such other persons as the Company may reasonably request, the aggregate number
and principal amount of Old Capital Securities tendered to you and the number
and principal amount of Old Capital Securities property tendered that day. In
addition, you will also inform the aforementioned persons, upon oral request
made from time to time (with written confirmation of such request thereafter)
prior to the Expiration Date, of such information as they or any of them may
reasonable request.
6. Upon the terms and subject to the conditions of the Exchange Offer,
delivery of New Capital Securities will be made by you promptly after
acceptance of the tendered Old Capital Securities. You will be hold all items
which are deposited for tender with you after 5:00 p.m. New York City time, on
the Expiration Date pending further instructions from an officer of the
Company.
7. If any Holder shall report to you that his or her failure to
surrender Old Capital Securities registered in his or her name is due to the
loss or destruction of a certificate or certificates, you shall request such
Holder (i) to furnish to you an affidavit of loss and, if required by the
Company, a bond of indemnity in an amount and evidenced by such certificate or
certificates of a surety, as may be satisfactory to you and the Company, and
(ii) to execute and deliver an agreement to indemnity the Company and you in
such form as is acceptable to you and the Company. The obligees to be named in
each such indemnity bond shall include the Company and you. You shall report
to the Company the names of all Holders who claim that their Old Capital
Securities have been lost or destroyed and the principal amount of such Old
Capital Securities.
8. As soon as practicable after the Expiration Date, you shall mail or
to a Holder the New Capital Securities that such Holder may be entitled to
receive and you shall arrange for cancellation of the Old Capital Securities
submitted to you or returned by DTC in connection with ATOP. Such Capital
Securities shall be forwarded to ____________ for cancellation and retirement
as you are instructed by the Company (or a representative designated by the
Company) in writing.
-3-
<PAGE> 4
9. For your services as the Exchange Agent hereunder, the Company shall
pay you in accordance with the schedule of fees attached hereto as Exhibit C.
The Company also will reimburse you for your reasonable out-of-pocket expenses
(including, but not limited to, reasonable attorneys' fees not previously paid
to you as set forth in Exhibit C) in connection with your services promptly
after submission to the Company of itemized statements.
10. You are not authorized to pay any concessions, commissions or
solicitation fees to any broker, dealer, bank or other person or to engage or
utilize any person to solicit tenders.
11. As the Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those
specifically set forth herein or in the Exhibits attached hereto or as
may be subsequently requested in writing of you by the Company and agreed
to by you in writing with respect to the Exchange Offer;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, accuracy, sufficiency, value or
genuineness of any Old Capital Securities deposited with you hereunder,
any New Capital Securities, and Tender Documents or other documents
prepared by the Company in connection with the Exchange Offer or any;
(c) shall not be obligated to take any legal action hereunder which
might in your judgment involve any expense or liability unless you shall
have been furnished with an indemnity reasonably satisfactory to you;
(d) may rely on, and shall be fully protected and indemnified as
provided in Section 12 hereof in acting upon, the written or oral
instructions with respect to any matter relating to your acting as
Exchange Agent specifically covered by this Agreement or supplementing or
qualifying any such action of any officer or agent of such other person
or persons as may be designated or whom you reasonably believe have been
designated by the Company;
(e) may consult with counsel satisfactory to you, including counsel
for the Company, and the advice of such counsel shall be full and
complete authorization and protection in respect in good faith and in
accordance with such advice of such counsel;
(f) shall not at any time advise any person as to the wisdom of the
Exchange Offer or as to the market value or decline or appreciation in
market value of any Old Capital Securities or New Capital Securities; and
(g) shall not be liable for any action which you may do or refrain
from doing in connection with this Agreement except for your gross
negligence, willful misconduct or bad faith.
- 4 -
<PAGE> 5
12. The Company covenants and agrees to indemnify and hold harmless
Bankers Trust Company and its officers, directors, employees, agents and
affiliates (collectively, the "Indemnified Parties" and each an "Indemnified
Party") against any loss, liability or reasonable expense of any nature
(including reasonable attorneys' and other fees and expenses) incurred in
connection with the administration of the duties of the Indemnified Parties
hereunder in accordance with this Agreement; provided, however, such
Indemnified Party shall use its best effort to notify the Company by letter, or
by cable, telex or telecopier confirmed by letter, of the written assertion of
a claim against such Indemnified Party, or of any action commenced against such
Indemnified Party, promptly after but in any event within 10 days of the date
such Indemnified Party shall have received any such written assertion of a
claim or shall have been served with a summons, or other legal process, giving
information as to the nature and basis of the claim; provided, however, that
failure to so notify the Company shall not relieve the Company of any liability
which it may otherwise have hereunder except such liability that is a direct
result of such Indemnified Party's failure to so notify the Company. The
Company shall be entitled to participate at its own expense in the defense of
any such claim or legal action and if the Company so elects or if the
Indemnified Party in such notice to the Company so directs, the Company shall
assume the defense of any suit brought to enforce any such claim. In the event
the Company assumes such defense, the Company shall not be liable for any fees
and expense thereafter incurred by such Indemnified Party, incurred as a result
of the need to have separate representation because of a conflict of interest
between such Indemnified Party and the Company. You shall not enter into a
settlement or other compromise with respect to any indemnified loss, liability
or expense without the prior written consent of the Company, which shall not be
unreasonably withheld or delayed if not adverse to the Company's interests.
13. This Agreement and your appointment as the Exchange Agent shall be
construed and enforced in accordance with the laws of the State of New York and
shall inure to the benefit of, and the obligations created hereby shall be
binding upon, the successors and assigns of the parties hereto. No other
person shall acquire or have any rights under or by virtue of this Agreement.
14. The parties hereto hereby irrevocably submit to the venue and
jurisdiction of any New York State or federal court sitting in the Borough of
Manhattan in New York City in any action or proceeding arising out of or
relating to this Agreement, and the parties hereby irrevocably agree that all
claims in respect of such action or proceeding arising out of or relating to
this Agreement, shall be heard and determined in such a New York State or
federal court. The parties hereby consent to and grant to any such court
jurisdiction over the persons of such parties and over the subject matter of
any such dispute and agree that delivery or mailing of any process or other
papers in the manner provided herein, or in such other manner as may be
permitted by law, shall be valid and sufficient service thereof.
15. This Agreement may not be modified, amended or supplemented without
an express written agreement executed by the parties hereto. Any inconsistency
between this Agreement and the Tender Documents, as they may from time to time
be supplemented or amended, shall be resolved in favor of the latter, except
with respect to the duties, liabilities and indemnification of you as Exchange
Agent.
- 5 -
<PAGE> 6
16. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
17. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
18. Unless terminated earlier by the parties hereto , this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Sections 9 and 12 shall survive the termination of this Agreement.
Upon any termination of this Agreement, you shall promptly deliver to the
Trustee any certificates for Old Capital Securities or New Capital Securities,
funds or property then held by you as Exchange Agent under this Agreement.
19. All notices and communications hereunder shall be in writing and
shall be deemed to be duly given if delivered or mailed first class certified
or registered mail, postage prepaid, or telecopied as follows:
<TABLE>
<S> <C>
If to Company: Triangle Bancorp, Inc.
4300 Glenwood Avenue
Raleigh, NC 27612
Telecopier No:
Attn:
and a copy to:
Telecopier No.:
Attn:
If to you: Bankers Trust Company
Corporate Trust and Agency Group
Four Albany Street - 4th Floor
New York, NY 10006
Attn.:
Telephone: 212-250-
Telecopier: 212-250-6392/6961
and a copy to:
</TABLE>
or such other address or telecopy number as any of the above may have furnished
to the other parties in writing for such purposes.
-6-
<PAGE> 7
20. This Letter Agreement and all of the obligations hereunder shall be
assumed by any and all successors and assigns of the Company.
If the foregoing is in accordance with your understanding, would you
please indicate your agreement by signing and returning the enclosed copy of
this Agreement to the Company.
Very truly yours,
By:
----------------------------------
Title:
Agreed to this day of May, 1997
BANKERS TRUST COMPANY
By:
------------------------------------------
Title:
-7-
<PAGE> 8
EXHIBIT B
[FORM OF TENDER DOCUMENTS]
<PAGE> 9
EXHIBIT C
[SCHEDULE OF FEES]
