<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 1998
REGISTRATION NO. 333-68453
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
HAMILTON BANCORP INC.
(Exact name of registrant as specified in its charter)
-------------------------
<TABLE>
<S> <C>
FLORIDA 65-0149935
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.)
Organization)
</TABLE>
3750 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178
(305) 717-5613
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
-------------------------
HAMILTON CAPITAL TRUST I
(Exact name of registrant as specified in its charter)
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<TABLE>
<S> <C>
DELAWARE APPLIED FOR
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.)
Organization)
</TABLE>
3750 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178
(305) 717-5613
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
-------------------------
EDUARDO A. MASFERRER
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
HAMILTON BANCORP INC.
3750 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178
(305) 717-5613
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------------
COPIES OF COMMUNICATIONS TO:
<TABLE>
<S> <C>
ROBERT GROSSMAN, ESQ. MARK I. SOKOLOW, ESQ.
JEFFREY OSHINSKY, ESQ. THACHER PROFFITT & WOOD
GREENBERG TRAURIG, P.A. TWO WORLD TRADE CENTER
1221 BRICKELL AVENUE 38TH FLOOR
MIAMI, FLORIDA 33131 NEW YORK, NEW YORK 10048
(305) 579-0500 (212) 912-7400
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
-------------------------
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.
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<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 21, 1998
<TABLE>
<S> <C> <C>
Pillar $11,000,000
BLUS(SM)
HAMILTON CAPITAL TRUST I
% BENEFICIAL UNSECURED SECURITIES, SERIES A
(LIQUIDATION AMOUNT $10 PER CAPITAL SECURITY)
</TABLE>
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
HAMILTON BANCORP INC.
<TABLE>
<S> <C> <C>
- ------------------------------------
We urge you to carefully
read the "Risk Factors"
section of this
Prospectus beginning on
page 14, where we
describe specific risks
associated with the
securities offered by
this Prospectus, along
with the other
information contained in
this Prospectus, before
you make your investment
decision.
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.
- ------------------------------------
</TABLE>
THE TRUST
- - The Trust is offering capital securities representing preferred beneficial
interests in the assets of the Trust.
- - The Trust will issue common securities representing common beneficial
interests in the assets of the Trust to Hamilton Bancorp Inc.
- - The sole assets of the Trust are the % junior subordinated deferrable
interest debentures of Hamilton Bancorp Inc., which mature on
, 2028.
- - Distributions on the capital securities will be paid quarterly on March 31,
June 30, September 30 and December 31 of each year commencing on
, 199 .
We plan to list the capital securities on the Nasdaq National Market under the
trading symbol "HABKP."
THE OFFERING
<TABLE>
<CAPTION>
PER SECURITY TOTAL
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<S> <C> <C>
Public price(1).............................. $10.00 $11,000,000
Underwriting discounts....................... (2) (2)
Proceeds to the Trust(3)..................... $10.00 $11,000,000
</TABLE>
- -------------------------
(1) Plus accrued distributions, if any, from December , 1998 to the date of
delivery.
(2) Because the proceeds of the sale of the securities will be used by the Trust
to purchase the % junior subordinated deferrable interest debentures of
Hamilton Bancorp Inc., Hamilton Bancorp Inc. will pay the Underwriters as
compensation $ per security, or $ in the aggregate (or
$ in the aggregate if the over-allotment option is exercised in
full).
(3) All expenses of this offering will be paid by Hamilton Bancorp Inc.
BLUS(SM) is a service mark of Canadian Imperial Bank of Commerce.
The Trust has granted the Underwriters of the offering a 30-day option to
purchase up to 165,000 additional capital securities on the same terms and
conditions set forth above solely to cover over-allotments, if any. If this
option is exercised in full, the total proceeds to the Trust will be
$12,650,000.
The Underwriters are severally underwriting the capital securities being
offered.
The capital securities should be delivered on or about December , 1998
through the book-entry facilities of The Depository Trust Company in New York,
New York.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CIBC OPPENHEIMER RAYMOND JAMES & ASSOCIATES, INC.
THE DATE OF THIS PROSPECTUS IS DECEMBER , 1998
<PAGE> 3
WHERE YOU CAN FIND MORE INFORMATION
Hamilton Bancorp Inc. (the "Corporation," "we," "us" or "our") is subject
to the information requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and accordingly, files annual, quarterly and
current reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). You may read and copy any document that
the Corporation files at the Commission's public reference room facility located
at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's
regional offices at 7 World Trade Center, 13th Floor, Suite 1300, New York, New
York 10048 and Suite 1400, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. Please call the Commission at 1-800-SEC-0330 for further
information on the public reference room. The Commission maintains an Internet
site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding issuers (including the Corporation)
that file documents with the Commission electronically through the Commission's
electronic data gathering, analysis and retrieval system ("EDGAR"). The
Corporation's common stock is traded on the Nasdaq National Market under the
symbol "HABK." The Corporation's reports, proxy and information statements may
also be reviewed at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington D.C. 20006.
This Prospectus is part of a registration statement filed by the Trust and
the Corporation with the Commission. Because the rules and regulations of the
Commission allow the Trust and the Corporation to omit certain portions of the
registration statement from this Prospectus, this Prospectus does not contain
all the information set forth in such registration statement. You should review
the registration statement and the exhibits filed with such registration
statement for further information regarding the Corporation, the Trust and the
Series A Capital Securities being sold pursuant to this Prospectus. The
registration statement and its exhibits may be inspected at the public reference
facilities of the Commission at the addresses set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows the Corporation to "incorporate by reference" the
information the Corporation filed with it, which means that the Corporation can
disclose important information to you by referring to those documents. The
information incorporated by reference is considered to be part of this
Prospectus, and later information that the Corporation files with the Commission
will automatically update and supersede this information. The Corporation
incorporates by reference the documents listed below and any future filings made
with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, until the Trust sells all of the Series A
Capital Securities:
- Annual Report on Form 10-K for the year ended December 31, 1997.
- Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998.
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<PAGE> 4
You may request a copy of these filings, at no cost, by writing or telephoning
the Corporation at the following address: 3750 N.W. 87th Avenue, Miami, Florida
33178, Attention: Corporate Secretary, telephone (305) 717-5608.
You should rely only on the information incorporated by reference or
provided in this Prospectus or any supplement. The Corporation has not
authorized anyone else to provide you with different information. Neither the
Corporation nor the Trust is making an offer of the Series A Capital Securities
in any state where the offer is not permitted. You should not assume that the
information in this Prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
FORWARD-LOOKING STATEMENTS
Information contained (or incorporated by reference) in this Prospectus may
constitute "forward-looking statements." Statements used (or incorporated by
reference) in this Prospectus which use words such as "believes," "expects,"
"may," "will," "should," "projected," "contemplates" or "anticipates" or the
negative of such terms or other variations may constitute forward-looking
statements. Forward-looking statements are inherently uncertain, and there is no
assurance that such forward-looking statements will be accurate. Such
forward-looking statements include, without limitation, the Corporation's
expectations and estimates as to its business operations, including growth in
net interest income and net income, as well as its expectations and beliefs as
to the projected costs and anticipated timetable to address Year 2000 compliance
issues, the adequacy of its plans to address such issues and the impact on the
Corporation's operations in the event that certain or all of its plans or the
plans of third parties in respect of Year 2000 compliance issues prove to be
inadequate. The statements in the "Risk Factors" section contained in this
Prospectus, as well as other statements described elsewhere herein or
incorporated by reference in the Prospectus, constitute cautionary statements
identifying important factors with respect to such forward-looking statements,
including certain risks and uncertainties, that could cause actual results to
vary materially from the future results covered in such forward-looking
statements. Other factors, such as the general state of the United States
economy, as well as the economic and political conditions of the countries in
which the Corporation conducts business operations, could also cause actual
results to vary materially from the future results covered in such
forward-looking statements.
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<PAGE> 5
SUMMARY
The following information is qualified in its entirety by the more detailed
information and financial information appearing elsewhere in this Prospectus.
For purposes of this Prospectus, the term "Corporation" includes Hamilton
Bancorp Inc. and its 99.8%-owned subsidiary, Hamilton Bank, N.A.
HAMILTON BANCORP INC.
The Corporation is a bank holding company that conducts its operations
through its 99.8 percent owned subsidiary, Hamilton Bank, N.A. (the "Bank"). The
Corporation provides global trade finance, with particular emphasis on trade
with and between South America, Central America, the Caribbean (collectively,
the "Region") and the United States or otherwise involving the Region. We
believe that trade finance provides the Corporation with the opportunity for
profitable growth, together with moderate credit risk, and that the Bank is the
only domestic financial institution headquartered in the State of Florida
focusing primarily on financing foreign trade. The Corporation has been able to
take advantage of substantial growth in foreign trade through its relationships
with approximately 500 correspondent banks and with importers and exporters in
the United States and the Region, as well as its location in South Florida,
which is becoming a focal point for trade in the Region. Much of this growth has
been associated with the adoption of economic stabilization policies in the
major countries of the Region.
The Corporation's lending activities are funded primarily through domestic
consumer and commercial deposits gathered through a network of eight branches
located in Florida and Puerto Rico, as well as deposits received from
correspondent banks, corporate customers and private banking customers within
the Region. The Corporation opened its branch in San Juan, Puerto Rico in March
1998. The Corporation's branches are strategically located in markets where it
believes that there is both a concentration of retail deposits and foreign trade
activity. The Corporation also participates in various community lending
activities. Under several United States and Florida laws and regulations, the
Bank is considered a minority-owned bank and is able to participate in certain
minority programs involving both deposits and loans.
The Corporation has experienced asset growth and increases in earnings
since it acquired the Bank in 1988, and has also achieved a high level of
profitability. The Corporation's average total loans increased from $370.6
million for the year ended December 31, 1995 to $737.9 million for the year
ended December 31, 1997. During the nine months ended September 30, 1998,
average total loans increased to $1.1 billion from $670.0 million for the
comparable period of 1997. Additionally, net income increased from $8.0 million
for the year ended December 31, 1995 to $15.9 million for the year ended
December 31, 1997. For the nine months ended September 30, 1998, net income
increased to $16.1 million, or $1.56 per share on a diluted basis, from $11.2
million, or $1.27 per share on a diluted basis, for the nine months ended
September 30, 1997. For the years ended December 31, 1996 and 1997, return on
average assets was 1.41% and 1.58%, respectively, and return on average total
equity was 24.29% and 20.05%, respectively. For the nine months ended September
30, 1998, return on average assets was 1.48% (annualized) and return on average
total equity was 19.84% (annualized). Along with its growth, the Corporation has
maintained strong credit quality. Net loan charge-offs as a
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<PAGE> 6
percentage of average outstanding loans were 0.36% and 0.32% for the years ended
December 31, 1996 and 1997, respectively, and 0.63% for the nine months ended
September 30, 1998. At December 31, 1997 and September 30, 1998, non-performing
assets represented 0.64% and 0.53% of total loans, respectively. See "Selected
Consolidated Financial Data."
The Corporation was incorporated in the state of Florida in 1988. The
Corporation's principal offices are located at 3750 N.W. 87th Avenue, Miami,
Florida 33178, and its telephone number is (305) 717-5500.
RECENT DEVELOPMENTS
Effective December 1, 1998, the Corporation appointed John M.R. Jacobs to
serve as its Senior Vice President-Finance. Mr. Jacobs succeeds Maria
Ferrer-Diaz as the Corporation's principal financial officer. Ms. Diaz, who is
leaving for personal reasons, will continue to work part time for the
Corporation. Mr. Jacobs has over 23 years experience in the banking industry.
Mr. Jacobs established and managed trade finance divisions for leading
international banks in New York from 1979 to 1992 until he was appointed Chief
Financial Officer of Amerop Sugar Corporation. Mr. Jacobs joined the Bank in
1997 as a Vice President responsible for the Bank's Commodities and
Correspondent Banking and was elected Senior Vice President of the Bank in March
1998. Mr. Jacobs received a Bachelor's Degree in Politics and Economics from the
University of Southampton, England and a Masters of Business Administration in
Finance and International Business from New York University.
HAMILTON CAPITAL TRUST I
Hamilton Capital Trust I (the "Trust") is a statutory business trust formed
by the Corporation under Delaware law pursuant to a declaration of trust
executed by the Corporation, as depositor for the Trust, and certain appointed
trustees and the filing of a certificate of trust on December 3, 1998 with the
Delaware Secretary of State. The Corporation and the trustees will enter into an
amended and restated declaration of trust (the "Trust Agreement"), in the form
filed as an exhibit to the registration statement relating to this offering of
% Beneficial Unsecured Securities, Series A (the "Series A Capital
Securities") of the Trust, which will state the terms and conditions for the
Trust to issue and sell its Series A Capital Securities, as well as its common
securities (the "Series A Common Securities").
The Trust exists solely to:
- issue and sell the Series A Capital Securities and the Series A Common
Securities;
- use the proceeds from the sale of the Series A Capital Securities and
Series A Common Securities to purchase subordinated debentures of the
Corporation, which will be the only assets of the Trust;
- maintain its status as an entity that is not an association taxable as a
corporation for federal income tax purposes; and
- engage in other activities that are necessary or incidental to these
purposes.
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<PAGE> 7
The Corporation will purchase all of the Series A Common Securities of the
Trust. The Series A Common Securities will represent an aggregate liquidation
amount equal to at least 3% of the Trust's total capitalization. The Series A
Capital Securities will represent the remaining 97% of the total capitalization
of the Trust. The Series A Common Securities will have terms substantially
identical to, and will rank equal in priority of payment with, the Series A
Capital Securities. However, if the Corporation defaults on the subordinated
debentures, cash distributions and liquidation, redemption and other amounts
payable with respect to the Series A Common Securities will be subordinate to
the Series A Capital Securities in priority of payment.
The Trust has a term of approximately 55 years, but may be dissolved
earlier as provided in the Trust Agreement (as defined herein). The Corporation
has appointed the following trustees (collectively, the "Trustees") to conduct
the Trust's business and affairs:
- Wilmington Trust Company ("Property Trustee");
- Wilmington Trust Company ("Delaware Trustee"); and
- Three individuals who are employees and officers of the Corporation
("Administrative Trustees").
As the sole holder of the Series A Common Securities, the Corporation can
replace or remove any of the Trustees. However, if an event of default occurs
and is continuing under the Trust Agreement, the Property Trustee and the
Delaware Trustee can only be replaced and removed by the holders of at least a
majority in aggregate liquidation amount of the Series A Capital Securities.
Only the Corporation, as owner of all of the Trust's Series A Common Securities,
can remove or replace the Administrative Trustees. The duties and obligations of
each Trustee are governed by the Trust Agreement.
The Corporation will pay all fees and expenses related to the Trust and the
offering of the Series A Capital Securities, as well as all of the ongoing costs
and expenses of the Trust, except that the Corporation will not be responsible
for the Trust's obligations under the Series A Capital Securities.
The Trust has no separate financial statements. The statements would not be
material to you because the Trust has no independent operations. The Trust
exists solely for the reasons summarized above. The Series A Capital Securities
will be fully and unconditionally guaranteed by the Corporation to the extent
described later in this Prospectus.
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<PAGE> 8
THE OFFERING
Securities Offered........... 1,100,000 Series A Capital Securities are being
offered for sale.
Offering Price............... The offering price is $10 for each Series A
Capital Security, plus accumulated
distributions, if any, from December , 1998.
Use of Proceeds.............. The Trust will use all of the proceeds from the
sale of the Series A Capital Securities in this
offering and the sale of the Series A Common
Securities to the Corporation to purchase the
% Junior Subordinated Deferrable Interest
Debentures, Series A (the "Series A Subordinated
Debentures") of the Corporation. The Corporation
currently intends to use the net proceeds from
the sale of the Series A Subordinated
Debentures, which are estimated to be
$ million ($ million if the
over-allotment option granted to the
Underwriters is exercised in full) net of
estimated commissions and other estimated
offering expenses, to invest in the Bank to
increase its capital level. Initially, the net
proceeds will be invested in short-term
investment grade financial securities. See "Use
of Proceeds."
Distributions................ As a holder of Series A Capital Securities, you
will be entitled to receive quarterly cash
distributions (the "Distributions") accumulating
from December , 1998 at the annual rate of
% of the liquidation amount of $10 per
Series A Capital Security. These distributions
will be payable on March 31, June 30, September
30 and December 31 of each year, beginning on
, 199 . The amount of each
distribution payable with respect to your Series
A Capital Securities will include amounts
accrued to, but excluding, the date the
distribution is due.
Extension Periods............ So long as no event of default under the Series
A Subordinated Debentures has occurred and is
continuing, the Corporation has the right, at
one or more times, to defer interest payments on
the Series A Subordinated Debentures for up to
20 consecutive quarters, but not beyond the
stated maturity date of the Series A
Subordinated Debentures (an "Extension Period").
If the Corporation elects to defer interest
payments on the Series A Subordinated
Debentures, the Trust will also defer
distributions on your Series A Capital
Securities. During this deferral period, you
will still accumulate distributions at an annual
rate of % of the liquidation amount of $10
per Series A Capital Security, plus you will
accumulate additional distributions at the same
rate, compounded quarterly, on any
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<PAGE> 9
unpaid distributions (to the extent permitted by
law). You will also be required to continue to
accrue interest income and include it in your
gross income for U.S. federal income tax
purposes, even if you are a cash basis taxpayer.
See "Description of Series A Capital
Securities -- Option to Defer Interest
Payments," "Description of Series A Subordinated
Debentures -- Option to Extend Interest Payment
Date" and "Certain Federal Income Tax
Consequences -- Original Issue Discount."
Guarantee.................... The Corporation has, through the Series A
Guarantee (as defined in this paragraph), the
Trust Agreement, the Series A Subordinated
Debentures and the Indenture governing the
Series A Subordinated Debentures, taken
together, fully, irrevocably and unconditionally
guaranteed, on a subordinated basis, the payment
of distributions and all other amounts under the
Series A Capital Securities. The Series A
Guarantee of the Corporation (the "Series A
Guarantee") guarantees the payment of
distributions and payments on liquidation of the
Trust or redemption of the Series A Capital
Securities, but only in each case to the extent
of funds held by the Trust. If the Corporation
does not make a payment on the Series A
Subordinated Debentures held by the Trust, the
Trust will not have sufficient funds to make
payments on the Series A Capital Securities. The
Series A Guarantee does not cover the payment of
distributions when the Trust has insufficient
funds to pay such distributions. See
"Relationship Among the Series A Capital
Securities, the Series A Subordinated Debentures
and the Series A Guarantee -- Full and
Unconditional Guarantee."
Ranking...................... The Series A Capital Securities will rank equal
in priority, and payments thereon will be made
pro rata, with the Series A Common Securities,
except as described under "Description of Series
A Capital Securities -- Subordination of Series
A Common Securities." The Series A Subordinated
Debentures will constitute unsecured obligations
of the Corporation and will rank subordinate and
junior in right of payment to all Senior
Indebtedness (as defined in "Description of the
Series A Subordinated
Debentures -- Subordination"), to the extent and
in the manner set forth in the Indenture. See
"Description of Series A Subordinated
Debentures." Additionally, the Series A
Subordinated Debentures will rank equal in
priority with all other subordinated debentures,
if any, issued by the Corporation, which may be
issued and sold to other trusts established by
the Corporation, in each case similar to the
Trust. The Series A Guarantee will rank equal in
priority with all
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<PAGE> 10
other guarantees, if any, issued by the
Corporation with respect to capital securities,
if any, issued by other trusts established by
the Corporation. The Series A Guarantee will
constitute an unsecured obligation of the
Corporation and will rank subordinate and junior
in right of payment to all Senior Indebtedness,
to the extent and in the manner set forth in the
Series A Guarantee. See "Description of Series A
Guarantee." In addition, because the Corporation
is a bank holding company, the Series A
Subordinated Debentures and the Series A
Guarantee will be effectively subordinated to
all existing and future liabilities of the
Corporation's subsidiaries, including the Bank's
deposit liabilities. See "Description of Series
A Subordinated Debentures -- Subordination."
Redemption................... The Trust must redeem the Series A Capital
Securities when the Series A Subordinated
Debentures are paid at maturity on or after
, 2028, or upon earlier
redemption. Subject to the Corporation having
received any required approval of regulatory
agencies, the Corporation has the option at any
time on or after , 2008 to redeem
the Series A Subordinated Debentures, in whole
or in part. The Corporation has the option at
any time prior to , 2008 to
redeem the Series A Subordinated Debentures, in
whole but not in part, if certain regulatory or
tax events occur or if there is a change in the
Investment Company Act of 1940 that requires the
Trust to register under that law. Upon any
redemption, the redemption price will be equal
to the liquidation amount of $10 per Series A
Capital Security plus any unpaid distributions
on your Series A Capital Securities to the date
of redemption. See "Description of Series A
Capital Securities -- Redemption" and
"Description of Series A Subordinated
Debentures -- Special Event Prepayment."
Book-entry................... The Series A Capital Securities will be
represented by one or more global securities
that will be deposited with and registered in
the name of The Depository Trust Company, New
York, New York ("DTC") or its nominee. This
means that you will not receive a certificate
for the Series A Capital Securities.
Absence of Market for the
Series A Capital
Securities................. The Series A Capital Securities will be a new
issue of securities for which there currently is
no market. We intend to list the Series A
Capital Securities on the National Market of the
National Association of Securities Dealers
Automated Quotation system ("Nasdaq National
Market") under the symbol "HABKP." See
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"Underwriting." Although the Underwriters have
informed the Trust and the Corporation that they
currently intend to make a market in the Series
A Capital Securities, the Underwriters are not
obligated to do so, and may discontinue any
market making activities at any time without
notice. Accordingly, we cannot provide you with
assurance as to the development or liquidity of
any market for your Series A Capital Securities.
Limited Voting Rights........ You will have no voting rights with respect to
the Series A Capital Securities, except in
limited circumstances. See "Description of
Series A Capital Securities -- Voting Rights;
Amendment of the Trust Agreement."
ERISA Considerations......... For a discussion of certain prohibited
transactions and fiduciary duty issues
pertaining to purchases by or on behalf of an
employee benefit plan, see "ERISA
Considerations."
Risk Factors................. An investment in the Series A Capital Securities
involves a number of risks. Some of these risks
relate to the Series A Capital Securities and
other risks relate to the Corporation. We urge
you to carefully consider the information
contained in "Risk Factors" set forth in this
Prospectus, as well as the other information
contained in this Prospectus and in the
documents which are incorporated by reference in
this Prospectus, before you buy any Series A
Capital Securities. See "Risk Factors."
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<PAGE> 12
SELECTED CONSOLIDATED FINANCIAL DATA
The following presents selected consolidated financial data of the
Corporation and its subsidiaries as of, and for the years ended, December 31,
1997, 1996, 1995, 1994 and 1993. The following financial data has been derived
from the Corporation's audited consolidated financial statements. The following
also presents selected consolidated financial data as of, and for the nine
months ended, September 30, 1998 and 1997, which has been derived from the
Corporation's unaudited consolidated quarterly financial statements and which we
believe includes all adjustments (consisting only of normal, recurring
adjustments) considered necessary for a fair presentation. The "as adjusted"
financial information presented below gives effect to the sale by the
Corporation of the Series A Subordinated Debentures in connection with this
offering (without giving effect to the Underwriters' over-allotment option). The
selected consolidated financial data as of and for the nine months ended
September 30, 1998 and 1997 and as of and for the years ended December 31, 1997,
1996, 1995, 1994 and 1993 should be read in conjunction with the Corporation's
consolidated financial statements and related notes included in the
Corporation's annual report on Form 10-K for the year ended December 31, 1997,
and quarterly reports on Form 10-Q for the quarters ended March 31, 1998, June
30, 1998, and September 30, 1998, which are incorporated herein by reference.
The selected consolidated financial data for the nine months ended September 30,
1998 is not necessarily indicative of the operating results to be expected for
the year or any other interim period.
<TABLE>
<CAPTION>
AS OF OR FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
------------------------ --------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
----------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest income............ $ 38,871 $ 27,406 $ 38,962 $ 27,250 $ 23,885 $ 17,201 $ 13,209
Provision for credit losses.... 7,121 4,989 6,980 3,040 2,450 2,875 2,550
----------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income after
provision for credit
losses....................... 31,750 22,417 31,982 24,210 21,435 14,326 10,659
Trade finance fees and
commissions.................. 10,136 9,055 12,768 9,325 9,035 7,422 6,572
Structuring and syndication
fees......................... 1,306 1,372 2,535 138 419 1,410 1,634
Customer service fees.......... 443 567 713 1,252 890 1,044 943
Net (loss) gain on sale of
securities available for
sale......................... (34) 109 108 -- 3 (168) 11
Other income................... 1,143 215 318 270 342 322 403
----------- ---------- ---------- ---------- ---------- ---------- ----------
Total non-interest income.... 12,994 11,318 16,442 10,985 10,689 10,030 9,563
----------- ---------- ---------- ---------- ---------- ---------- ----------
Operating expenses............. 19,132 16,323 23,423 19,630 18,949 14,946 13,014
Income before provision for
income taxes................. 25,612 17,412 25,001 15,565 13,175 9,410 7,208
Provision for income taxes..... 9,468 6,219 9,098 5,855 5,172 3,721 2,761
----------- ---------- ---------- ---------- ---------- ---------- ----------
Net income..................... $ 16,144 $ 11,193 $ 15,903 $ 9,710 $ 8,003 $ 5,689 $ 4,447
=========== ========== ========== ========== ========== ========== ==========
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
AS OF OR FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
------------------------ --------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
----------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
PER COMMON SHARE DATA:
Net income per common share:
Basic........................ $1.62 $1.32 $1.81 $1.87 $1.54 $1.09 $0.85
Diluted...................... $1.56 $1.27 $1.73 $1.79 $1.47 $1.05 $0.82
Average common shares
outstanding:
Basic........................ 9,960,679 8,462,114 8,806,379 5,205,030 5,205,030 5,205,030 5,205,030
Diluted...................... 10,336,199 8,833,270 9,173,680 5,430,030 5,430,030 5,430,030 5,430,030
Book value per common share.... $11.54 $9.20 $10.00 $8.07 $6.41 $5.06 $3.10
AVERAGE BALANCE SHEET DATA:
Total assets................... $ 1,455,622 $ 933,023 $1,007,846 $ 687,990 $ 534,726 $ 391,606 $ 276,825
Total loans.................... 1,135,602 669,902 737,921 485,758 370,568 270,798 190,364
Total deposits................. 1,247,163 782,518 842,117 574,388 444,332 317,176 222,397
Stockholders' equity........... 108,482 68,760 79,311 39,969 32,358 22,195 15,267
</TABLE>
<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, 1998
------------------------
ACTUAL AS ADJUSTED
---------- -----------
(UNAUDITED)
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
BALANCE SHEET DATA:
Total assets................................................ $1,663,085 $1,674,085
Loans -- net................................................ 1,202,013 1,202,013
Investment securities....................................... 84,825 84,825
Total deposits.............................................. 1,466,328 1,466,328
Other borrowings............................................ 6,116 17,116
Total stockholders' equity.................................. 116,022 116,022
Book value per common share................................. $11.54 $11.54
</TABLE>
<TABLE>
<CAPTION>
AS OF OR FOR
THE NINE
MONTHS ENDED AS OF OR FOR THE YEAR
SEPTEMBER 30, ENDED DECEMBER 31,
-------------- -----------------------------------------
1998 1997 1997 1996 1995 1994 1993
----- ----- ----- ----- ----- ----- -----
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS:
Net interest spread........................ 3.20% 3.58% 3.53% 3.85% 4.20% 4.33% 4.76%
Net interest margin........................ 3.89 4.32 4.28 4.52 4.94 5.06 5.48
Return on average equity(1)................ 19.84 21.70 20.05 24.29 24.73 25.63 29.13
Return on average assets(1)................ 1.48 1.60 1.58 1.41 1.50 1.45 1.61
Efficiency ratio(2)........................ 36.89 42.15 42.28 51.31 54.68 54.89 57.15
Earnings to fixed charges(3):
Excluding interest on deposits........... 30.84x 35.34x 34.61x 44.32x 40.64x 35.19x 28.07x
Including interest on deposits........... 1.50x 1.57x 1.56x 1.52x 1.55x 1.78x 2.02x
</TABLE>
(footnotes are on the following page)
12
<PAGE> 14
<TABLE>
<CAPTION>
AS OF OR FOR THE
NINE MONTHS
ENDED AS OF OR FOR THE YEAR
SEPTEMBER 30, ENDED DECEMBER 31,
---------------- ----------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSET QUALITY RATIOS:
Allowance for credit losses as a
percentage of total loans......... 0.85% 1.06% 1.07% 1.07% 1.05% 1.31% 1.66%
Non-performing assets as a
percentage of total loans......... 0.53 0.58 0.64 0.91 1.07 0.59 1.33
Allowance for credit losses as a
percentage of non-performing
assets............................ 159.57 136.69 166.03 117.97 98.56 221.13 125.00
Net loan charge-offs as a percentage
of average outstanding loans...... 0.63 0.23 0.32 0.36 0.58 0.74 0.50
CAPITAL RATIOS:
Leverage capital ratio.............. 7.36% 8.54% 7.88% 5.80% 5.68% 5.48% 5.21%
Tier 1 risk based capital........... 11.29 13.28 12.43 10.20 9.98 10.30 9.35
Total risk based capital............ 12.30 14.53 13.78 11.50 10.92 11.47 10.60
Average equity to average assets.... 7.45 7.37 7.87 5.81 6.05 5.67 5.53
</TABLE>
- -------------------------
(1) Amounts for the nine months ended September 30, 1998 and 1997 are presented
on an annualized basis.
(2) Amounts reflect operating expenses as a percentage of net interest income
plus non-interest income.
(3) For purposes of computing the ratios of earnings to fixed charges, earnings
represent net income from continuing operations plus total taxes based on
income and fixed charges. Fixed charges, excluding interest on deposits,
include interest expense (other than on deposits), one-third (the proportion
deemed representative of the interest factor) of rents, net of income from
subleases and capitalized interest. Fixed charges, including interest on
deposits, include all interest expense, one-third (the proportion deemed
representative of the interest factor) of rents, net of income from
subleases, and capitalized interest.
13
<PAGE> 15
RISK FACTORS
An investment in the Series A Capital Securities involves a number of
risks. Some of these risks relate to the Series A Capital Securities and others
relate to the Corporation. We urge you to carefully consider the following
information, together with the other information in this Prospectus and in the
documents that are incorporated by reference in this Prospectus before you buy
any Series A Capital Securities.
RISKS RELATED TO THE SERIES A CAPITAL SECURITIES
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES A GUARANTEE AND THE SERIES
A SUBORDINATED DEBENTURES
The obligations of the Corporation under the Series A Guarantee issued by
the Corporation for your benefit and under the Series A Subordinated Debentures
are unsecured and rank subordinate and junior in right of payment to all of the
Corporation's Senior Indebtedness. As of September 30, 1998, the Corporation had
no Senior Indebtedness.
The Corporation is a bank holding company. Therefore, its right to
participate in any distribution of assets of any subsidiary (including the Bank)
upon the subsidiary's liquidation or reorganization or otherwise (and your
ability to benefit indirectly from such distribution) is subject to the prior
claims of creditors of that subsidiary, including depositors, in the case of the
Bank, except to the extent that the Corporation may itself be recognized as a
creditor of that subsidiary. At September 30, 1998, the Corporation's sole
subsidiary, the Bank, had total liabilities, including deposits, of $1.5
billion. Accordingly, because the Series A Subordinated Debentures effectively
will be subordinated to all existing and future liabilities of the Corporation's
subsidiaries, including the Bank's deposit liabilities, you should look only to
the assets of the Corporation, and not its subsidiaries, for payments on the
Series A Subordinated Debentures. The Series A Guarantee will constitute an
unsecured obligation of the Corporation and will rank subordinate and junior in
right of payment to all Senior Indebtedness in the same manner as the Series A
Subordinated Debentures. There is no limit to the Corporation's or the Bank's
ability to incur additional indebtedness, including indebtedness that ranks
senior in priority of payment. See "Description of Series A Guarantee -- Status
of the Series A Guarantee" and "Description of Series A Subordinated
Debentures -- General" and "-- Subordination."
The ability of the Trust to make payments with respect to the Series A
Capital Securities is solely dependent upon the Corporation making payments on
the Series A Subordinated Debentures as and when required. If the Corporation
defaults on its obligations to pay principal, premium or interest on the Series
A Subordinated Debentures, the Trust will not have sufficient funds to make
distributions or to pay the liquidation amount of $10 per Series A Capital
Security. As a result, you will not be able to rely upon the Series A Guarantee
for payment of these amounts. Instead, you or the Property Trustee (under
certain circumstances discussed further on page 59) may enforce the rights of
the Trust under the Series A Subordinated Debentures against the Corporation.
14
<PAGE> 16
LIMITATIONS ON SOURCE OF FUNDS
The Corporation is a bank holding company regulated by the Board of
Governors of the Federal Reserve System (the "FRB"), and almost all of the
operating assets of the Corporation are owned by the Bank. The Corporation
relies primarily on dividends from the Bank to meet its corporate expenses and
will rely on such dividends to satisfy its obligations for payment of principal
and interest on its outstanding debt obligations. Dividend payments from the
Bank are subject to (1) regulatory limitations, generally based on current and
retained earnings, imposed by the various regulatory agencies with authority
over the Bank, (2) regulatory restrictions if such dividends would impair the
capital of the Bank and (3) the Bank's profitability, financial condition and
capital expenditures and other cash flow requirements. Bank regulatory agencies
have authority to prohibit the Bank or the Corporation from engaging in an
unsafe or unsound practice in conducting their business. The payment of
dividends, depending upon the financial condition of the Bank or the
Corporation, could be deemed to constitute such an unsafe or unsound practice.
The FRB has stated that, as a matter of prudent banking, a bank or bank holding
company should not maintain its existing rate of cash dividends on common stock
unless (1) the organization's net income available to common shareholders over
the past year has been sufficient to fund fully the dividends; and (2) the
prospective rate of earnings retention appears consistent with the
organization's capital needs, asset quality and overall financial condition.
During the first nine months of 1998, the Bank paid $2.1 million in dividends to
the Corporation, which reflected 4.42% of the total amount of dividends the Bank
was permitted to pay as of September 30, 1998 under existing supervisory
practices. At September 30, 1998, approximately $47.2 million of retained
earnings of the Bank were available for dividend declaration without prior
regulatory approval. We cannot assure you that the Bank will be able to pay
dividends at past levels, or at all, in the future.
Under the Federal Deposit Insurance Act ("FDIA"), the Bank would be
prohibited from making capital distributions, including the payment of
dividends, if, after making any such distribution, the Bank would become
"undercapitalized" (as such term is used in the statute). Based on the Bank's
current financial conditions, the Corporation does not expect that this
provision will have any impact on its ability to obtain dividends from the Bank;
however, no assurance can be given that the Bank will be able to pay dividends
in the future.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES
General
So long as no event of default under the Series A Subordinated Debentures
has occurred and is continuing, the Corporation has the right, at one or more
times, to defer interest payments on the Series A Subordinated Debentures for up
to 20 consecutive quarters, but not beyond the maturity date of such debentures.
As a consequence, the Trust will defer distributions on the Series A Capital
Securities during any such deferral period. However, during this deferral period
you would still accumulate distributions at the rate of % per annum, plus
you would accumulate additional distributions at the same rate of % per
annum compounded quarterly, on any unpaid distributions, to the extent permitted
by law. The Series A Capital Securities may trade at a price that does not fully
15
<PAGE> 17
reflect the value of accrued but unpaid interest on the Series A Subordinated
Debentures. During the pendency of any deferral period, the Corporation
generally will be prohibited from, among other things, declaring or paying
dividends on its capital stock or from making any payments on or repaying,
repurchasing or redeeming any indebtedness which ranks equal to or junior in
right of payment with the Series A Subordinated Debentures. See "Description of
Series A Capital Securities -- Distributions."
Prior to the termination of any deferral period, the Corporation may
further extend the deferral period, provided that an extension may not cause the
deferral period to exceed 20 consecutive quarterly periods or to extend beyond
the maturity date of the Series A Subordinated Debentures. Upon the termination
of any deferral period and the payment of all interest then accrued and unpaid
on the Series A Subordinated Debentures, the Corporation may elect to begin a
new deferral period, subject to certain requirements. There is no limitation on
the number of times that the Corporation may elect to begin a deferral period.
See "Description of Series A Capital Securities -- Distributions" and
"Description of Series A Subordinated Debentures -- Option to Extend Interest
Payment Date."
Tax Consequences
During a deferral period, you will be required to continue to accrue
interest income for U.S. federal income tax purposes in respect of your pro rata
share of the Series A Subordinated Debentures held by the Trust, even if you are
a cash basis taxpayer. As a result, you must include the accrued interest in
your gross income for U.S. federal income tax purposes prior to your receiving
cash. You will not receive the cash related to any accrued and unpaid interest
from the Trust if you sell your Series A Capital Securities before the
termination of any deferral period. Additionally, during a deferral period,
accrued and unpaid distributions that are included in your gross income will
increase your tax basis in the Series A Capital Securities. If you sell your
Series A Capital Securities during a deferral period, your increased tax basis
will decrease the amount of any capital gain or will create a capital loss or
increase the amount of any capital loss that you realize on the sale. A capital
loss, except in certain limited circumstances, cannot be applied to offset
ordinary income.
Market Price Consequences
The Corporation has no current intention of exercising its right to defer
interest payments on the Series A Subordinated Debentures. However, if it
exercises this right in the future, the market price of the Series A Capital
Securities is likely to be affected. If you sell your Series A Capital
Securities during an interest deferral period, you may not receive the same
return on your investment as someone else who continues to hold the Series A
Capital Securities.
REDEMPTION OF THE SERIES A CAPITAL SECURITIES UPON CERTAIN SPECIAL EVENTS
At any time certain special events occur (an Investment Company Event, a
Regulatory Capital Event or a Tax Event, in each case as defined under
"Description of Series A Subordinated Debentures -- Special Event Prepayment")
and are continuing, the Corporation has the right to redeem the Series A
Subordinated Debentures, in whole but
16
<PAGE> 18
not in part. The redemption of the Series A Subordinated Debentures will cause a
mandatory redemption of the Series A Capital Securities and the Series A Common
Securities within 90 days of such event at a redemption price equal to the
liquidation amount of $10 per Series A Capital Security plus any accrued and
unpaid distributions. The Corporation will have to obtain any required
regulatory approval before it redeems the Series A Subordinated Debentures under
these provisions. See "Description of Series A Capital
Securities -- Redemption."
You should be aware that the Internal Revenue Service ("IRS") has
disallowed a deduction for interest paid by Enron Corporation ("Enron") in 1993
and 1994 on securities issued by Enron that are similar to the Series A
Subordinated Debentures. Enron has filed a petition in the U.S. Tax Court
challenging the disallowance of its deductions. Although Enron's debt
obligations differ in certain respects from the Series A Subordinated
Debentures, the arguments of the IRS that interest on those obligations is not
deductible are not focused on those different terms and thus could apply to the
Series A Subordinated Debentures. Thus, if the Tax Court decides in favor of the
IRS in Enron's case, although its decision might be distinguishable from the
Series A Subordinated Debentures, it is also possible that its decision would
result in the receipt by the Corporation or the Trust of an opinion of counsel
that there is more than an insubstantial risk that interest payable on the
Series A Subordinated Debentures is not or will not be deductible. The receipt
of such an opinion would constitute a Tax Event, which would permit the
Corporation to cause a redemption of the Series A Capital Securities and the
Series A Common Securities. See "Description of Series A Capital Securities --
Redemption."
LIQUIDATION DISTRIBUTION OF SERIES A SUBORDINATED DEBENTURES
The Corporation has the right at any time to dissolve the Trust and, after
satisfaction of liabilities to creditors of the Trust as required by applicable
law, to cause the Series A Subordinated Debentures to be distributed to the
holders of Series A Capital Securities and Series A Common Securities
(collectively, the "Trust Securities"). The Corporation's ability to exercise
this right is subject to its receipt of (1) an opinion of counsel stating that a
distribution of the Series A Subordinated Debentures will not be a taxable event
to you, and (2) any required regulatory approval. As a result, and subject to
the terms of the Trust Agreement, the Trustees may distribute the Series A
Subordinated Debentures to the holders of Trust Securities. Although the
Corporation has agreed to use its best efforts to list the Series A Subordinated
Debentures on the Nasdaq National Market if this were to occur, no assurance can
be given that the Series A Subordinated Debentures will be approved for listing
or that a trading market will exist for the Series A Subordinated Debentures.
Because you may receive Series A Subordinated Debentures upon a liquidation of
the Trust and because distributions on the Series A Capital Securities are
limited to payments on the Series A Subordinated Debentures, you are also making
an investment decision with regard to the Series A Subordinated Debentures.
Accordingly, you should carefully review all the information regarding the
Series A Subordinated Debentures, as well as the Series A Capital Securities,
contained in this Prospectus. See "Description of Series A Subordinated
Debentures." Under current U.S. federal income tax law, a distribution of Series
A Subordinated Debentures following the dissolution of the Trust would not be a
taxable event to you. If the Trust is dissolved following an Investment Company
Event, a Regulatory Capital Event or a Tax Event, and you receive
17
<PAGE> 19
distributions of cash, such distributions would constitute a taxable event to
you. See "Certain Federal Income Tax Consequences -- Receipt of Series A
Subordinated Debentures or Cash Upon Liquidation of the Trust."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
We cannot predict the market prices for the Series A Capital Securities or
the Series A Subordinated Debentures that may be distributed if a dissolution of
the Trust were to occur. Accordingly, the Series A Capital Securities or the
Series A Subordinated Debentures may trade at a discount from the price that you
paid for the Series A Capital Securities.
RIGHTS UNDER THE SERIES A GUARANTEE
The Series A Guarantee will guarantee to you the following payments, to the
extent not paid by or on behalf of the Trust:
- any accumulated and unpaid distributions required to be paid on your
Series A Capital Securities, but only to the extent that the Trust has
funds on hand legally available for the payment of such distributions;
- the redemption price with respect to your Series A Capital Securities to
be redeemed, but only to the extent that the Trust has funds on hand
legally available for the redemption of such Series A Capital Securities
at such time; and
- upon a voluntary or involuntary dissolution, winding up or liquidation of
the Trust (unless the Series A Subordinated Debentures are distributed to
you), the lesser of (a) the aggregate liquidation amount of your Series A
Capital Securities and all accumulated and unpaid distributions on your
Series A Capital Securities to the date of payment, to the extent that
the Trust has funds on hand legally available for the payment of such
amounts at such time, and (b) the amount of assets of the Trust remaining
available for distribution to you at such time, after the satisfaction of
liabilities to creditors of the Trust as provided by applicable law.
The holders of at least a majority in liquidation amount of the Series A
Capital Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available with respect of the Series A
Guarantee or to direct the exercise of any trust power conferred under the
Series A Guarantee. As a holder of Series A Capital Securities, you may
institute a legal proceeding directly against the Corporation to enforce your
rights under the Series A Guarantee without first instituting a legal proceeding
against the Trust, the Series A Guarantee trustee or any other person or entity.
If the Corporation were to default on its obligation to pay amounts payable
under the Series A Subordinated Debentures, the Trust would not have sufficient
funds for the payment of distributions on the Series A Capital Securities or
amounts payable on redemption of the Series A Capital Securities in which case
you will not be able to rely upon the Series A Guarantee for payment of such
amounts. Instead, if an event of default shall have occurred and be continuing
under the indenture governing the Series A Subordinated Debentures and such
event is attributable to the failure of the Corporation to pay, among other
things, the principal of or interest on the Series A Subordinated Debentures on
the day on which such payment is due and payable, then you may institute
18
<PAGE> 20
a legal proceeding directly against the Corporation for enforcement of payment.
Notwithstanding any payments made to you by the Corporation in connection with
such an action, the Corporation shall remain obligated to pay the principal of
and interest on the Series A Subordinated Debentures, and it shall be subrogated
to your rights with respect to payments on the Series A Capital Securities to
the extent of any payments made by the Corporation to you in connection with
your actions taken against the Corporation. Except as described herein, you will
not be able to exercise directly any other remedy available to holders of Series
A Subordinated Debentures or to assert directly any other right in respect of
the Series A Subordinated Debentures. See "Description of Series A Subordinated
Debentures -- Enforcement of Certain Rights by Holders of Series A Capital
Securities," "-- Debenture Events of Default" and "Description of Series A
Guarantee." The Trust Agreement will provide that each holder of Series A
Capital Securities by acceptance of such securities agrees to the provisions of
the Indenture.
LIMITED VOTING RIGHTS
As a holder of Series A Capital Securities, you will have limited voting
rights. These voting rights will relate only to the modification of the Series A
Capital Securities and the exercise of the Trust's rights as a holder of the
Series A Subordinated Debentures. In general, only the Corporation can replace
or remove any of the Trustees. However, if an event of default under the Trust
Agreement is continuing, holders of at least a majority in aggregate liquidation
amount of the Series A Capital Securities may replace the Property Trustee and
the Delaware Trustee. The Property Trustee, the Administrative Trustees and the
Corporation may amend the Trust Agreement without your consent in order to
ensure that the Trust will not be classified as an association taxable as a
corporation or to enable the Trust to qualify as a grantor trust, in each case
for federal income tax purposes, or to ensure that the Trust will not be
required to register as an "investment company" under the Investment Company Act
of 1940, as amended, even if such action adversely affects your interests. You
will have no voting rights with respect to any matters submitted to a vote of
the stockholders of the Corporation. See "Description of Series A Capital
Securities -- Voting Rights; Amendment of the Trust Agreement" and "-- Removal
of Trustees."
TRADING CHARACTERISTICS OF THE SERIES A CAPITAL SECURITIES
We intend to list the Series A Capital Securities on the Nasdaq National
Market. Although the Underwriters of the offering of Series A Capital Securities
have indicated that they intend to make a market in the Series A Capital
Securities, they are not obligated to do so and may discontinue any such
market-making activities at any time without notice. We cannot give you any
assurance as to the liquidity of the trading market for the Series A Capital
Securities.
The Series A Capital Securities may trade at prices that do not fully
reflect the value of accrued and unpaid interest on the underlying Series A
Subordinated Debentures. See "Certain Federal Income Tax Consequences" for a
discussion of the U.S. federal income tax consequences that may result from a
taxable disposition of your Series A Capital Securities.
19
<PAGE> 21
RISKS RELATED TO THE CORPORATION
ECONOMIC CONDITIONS
Recently there have been serious economic downturns for some countries in
the Region, including Brazil, and there can be no assurance that widespread
economic difficulties will not be experienced by countries in the Region at some
time in the near future. Economic downturns, coupled with political instability
and economic disruptions in other parts of the world, including Russia and Asia,
have affected, and may continue to affect, investor confidence in the Region and
may result in a reduction of trade in and with the Region that would adversely
affect the Corporation's business prospects, financial condition and results of
operations. During the 1980s, many of the countries in the Region experienced
severe economic difficulties, including periods of slow or negative growth,
large government budget deficits, high inflation, currency devaluations,
government influence over the private sector, nationalization and expropriation
of assets, vulnerability to weakness in world prices for commodity exports
(particularly in smaller countries), large foreign indebtedness on the part of
their governments, and exchange controls and unavailability of foreign exchange,
including United States dollars. As a result, many governments and public and
private institutions in the Region were unable to make interest and principal
payments on their external debt during this deferral period. If this were to
occur again, and the Corporation's customers did not make payments on amounts
owed to the Corporation, the Corporation's ability to make payments on the
Series A Subordinated Debentures and the Trust's ability to make distributions
on the Series A Capital Securities would be adversely affected.
POLITICAL INSTABILITY
Although democracy has largely prevailed in the Region since the early
1990s, a number of countries in the Region have also experienced popular unrest,
internal insurgencies, terrorist activities, hostilities with neighboring
countries, drug trafficking and authoritarian military governments. Some of
these conditions, such as drug trafficking, continue to be experienced and, to a
lesser extent, certain conditions such as terrorist activities, exist from time
to time in certain countries. Most countries in the Region also have a history
of political instability involving periodic, non-democratic forms of government.
Any return to such non-democratic forms of government or expansion of such
destabilizing activities in one or more of the key countries in the Region in
which the Corporation does business could affect investors' confidence not only
in these countries, but in the Region as a whole, reducing trade with the
Region. This could have a material adverse effect on the Corporation's business,
prospects, financial condition and results of operations.
CREDIT RISKS AND COLLATERAL
The financial difficulty or failure of customers of the Corporation or of
its correspondent banks may adversely affect the Corporation's ability to
recover funds due to it. In addition, a significant amount of the Corporation's
trade financing activity involves collateral in or guarantees from countries
subject to economic and political instability. The Corporation, in its trade
financing, also runs the risk that such collateral or guarantees will be
inadequate, largely due to rapidly changing market conditions, deteriorating
financial condition of guarantors, or fraud in the underlying trade transaction,
which may leave
20
<PAGE> 22
either the Corporation or its customer holding documents of title to
non-existent or defective goods. Accordingly, the Corporation maintains an
allowance for credit losses. The allowance for credit losses is determined after
evaluating historic loan loss experience adjusted for current conditions and
circumstances, ratio analyses of credit quality classifications and their trend
in light of current portfolio trends and economic conditions, as well as other
pertinent considerations, all of which involve significant estimation and
judgment and are subject to rapid changes which may not be foreseeable. In
addition, as part of the regulatory examination process, bank regulators may
require the Corporation to increase its allowance for credit losses. Ultimate
losses could vary significantly from current estimates and may be either greater
or less than the Corporation's allowance for credit losses.
CONCENTRATION OF CROSS-BORDER LENDING ACTIVITIES
At September 30, 1998, approximately 28.8% in principal amount of the
Corporation's cross-border outstandings (as a percentage of total assets) were
outstanding to borrowers in four countries other than the United States:
Guatemala (8.6%), Ecuador (8.1%), Panama (6.1%) and Brazil (6.0%). Although all
of these outstanding amounts are denominated in United States dollars, a
significant deterioration of economic or political conditions or the imposition
of currency exchange or similar controls in one or more of these countries could
have a material adverse effect on the Corporation's business, prospects,
financial condition and results of operations. See "Selected Consolidated
Financial Data" and "Hamilton Bancorp Inc."
EFFECTS OF EVENTS IN DEVELOPING MARKETS
The Corporation's business and services are, to a large degree, influenced
by economic and market conditions in developing market countries. Although
economic conditions are different in each country, developments in one country
can have significant effects on the operations of companies doing business with
other countries, including the Corporation. In December 1994, the Mexican
currency was sharply devalued, triggering an economic crisis in Mexico which
adversely affected the securities markets in many developing markets in the
Region. Beginning in the summer of 1997, the currencies of a number of Southeast
Asian countries, including Thailand, Indonesia, Malaysia, the Philippines and
South Korea have come under pressure, and were allowed to float against the
United States dollar resulting in a significant currency devaluation and a
deterioration of economic conditions in that region. More recently the
deterioration of economic conditions in Russia has resulted in a significant
currency devaluation and sovereign debt restructuring. Developing markets,
including the Asian markets and Russia, have continued to experience significant
volatility, affecting both the United States and Latin American capital markets.
Moreover, a continuation of investor uncertainty in the Region may result in
widespread economic difficulties throughout the Region. We can give you no
assurance that the business and operations of companies which do business in the
Region, such as the Corporation, will not be materially adversely affected by
events elsewhere, especially in developing market countries.
21
<PAGE> 23
POTENTIAL IMPACT OF CHANGES IN INTEREST RATES
The Corporation's profitability is primarily dependent on its net interest
income, which is the difference between its interest income on interest-earning
assets, such as loans, and its interest expense on interest-bearing liabilities,
such as deposits. Financial institutions, including the Bank, are affected by
changes in general interest rate levels and by other economic factors. A sharp
increase in interest rates could impact economic activity in the Region and the
demand for the Corporation's loans. Fluctuations in interest rates are not
predictable or controllable and may vary from country to country. In addition,
interest rates are highly sensitive to many factors which are beyond the
Corporation's control, including general economic conditions and the policies of
various government and regulatory authorities. Interest rate risk arises from
mismatches between repricing or maturity characteristics of assets and
liabilities. Although the Corporation has structured its assets and liabilities
in an effort to mitigate the impact of changes in interest rates, changes in
interest rates on retail deposits typically lag behind changes in interest rates
on loans. There can be no assurance that the Corporation will not experience a
material adverse effect on its net interest income in a changing interest rate
environment.
ABILITY OF THE CORPORATION TO CONTINUE ITS GROWTH STRATEGY
The Corporation has historically achieved growth in its trade financing
activities by attracting new customers, expanding its services to existing
customers and increasing its deposit base. In 1996 and 1997, the Corporation's
net loans, including discounted acceptances, increased approximately 26.8% and
80.6% in the aggregate, respectively, to approximately $527.3 million and $952.4
million, and deposits increased by approximately 26.5% and 77.7% in the
aggregate, respectively, to approximately $638.6 million and $1.1 billion, in
each case, when compared to the prior year. For the nine months ended September
30, 1997 and September 30, 1998, the Corporation's net loans, including
discounted acceptances, increased approximately 62.0% and 26.2% in the
aggregate, respectively, to approximately $854.1 million and $1.2 billion, and
deposits increased by approximately 52.9% and 29.2% in the aggregate,
respectively, to approximately $976.3 million and $1.5 billion, in each case,
when compared to the previous period. There can be no assurance that the
Corporation will be able to continue to grow at these rates in the future.
Historical growth rates are not necessarily indicative of future results, and it
becomes more difficult to maintain historical rates of growth as a corporation
increases in size. The Corporation's ability to further implement its strategy
for continued growth of its trade financing activities is largely dependent upon
the Corporation's ability to attract and retain quality customers for the
Corporation's services in a competitive market, on the business growth of those
customers, on its ability to maintain, expand and develop relationships with
correspondent banks, and on its ability to increase deposit growth, all of which
may be affected by a number of factors not within its control. As most of the
Corporation's loans and deposits are short-term in nature and thereby turn over
rapidly, any decline or reversal of the growth rate could occur more quickly
than it would for most other financial institutions. Moreover, as part of its
growth strategy, the Corporation expects to increase its exposure to certain
customers and to attract larger customers. A significant loss on these larger
exposures could have a material adverse effect on the Corporation's business,
prospects, financial condition and results of operations.
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<PAGE> 24
CONCENTRATION OF DEPOSITS
A significant portion of the Corporation's deposits are comprised of
certificates of deposit and other time deposits in amounts in excess of
$100,000. At September 30, 1998, approximately 39.2% and 4.8% of the
Corporation's total deposits were comprised of certificates of deposit and other
time deposits in amounts in excess of $100,000, respectively. Most of the
Corporation's deposits closely match the maturity of its assets. Notwithstanding
the short-term nature of its loan portfolio, in the event that all or
substantially all of such deposits were withdrawn at or prior to their
respective maturities, the Corporation could be required to satisfy such deposit
withdrawals through the (1) use of available interbank funding, (2) sale of
bankers' acceptances, (3) interbank certificate of deposit network or (4)
liquidation of certain assets. Although we believe that the Corporation has
historically been successful in matching the maturity dates of these deposits
against its loan portfolio, there can be no assurance that the Corporation will
continue to be able to do so or that it would not ultimately be required to
liquidate assets in order to satisfy such deposit withdrawals.
DEPENDENCE ON MANAGEMENT AND KEY PERSONNEL
The Corporation's success depends to a significant degree upon the
continued contributions of members of its senior management, particularly
Eduardo A. Masferrer, its Chairman of the Board, President and Chief Executive
Officer, and J. Carlos Bernace, an Executive Vice President of the Corporation
and President of the Bank, as well as other officers and key personnel, many of
whom would be difficult to replace. The future success of the Corporation also
depends on its ability to identify, attract and retain additional qualified
personnel, particularly managerial personnel with experience in international
trade financing. No employees or executive officers have employment agreements
with the Corporation. The loss of Mr. Masferrer or Mr. Bernace, or other
officers or key personnel, could have a material adverse effect on the
Corporation's business, prospects, financial condition and results of
operations. The Corporation does not maintain key person life insurance with
respect to any of its officers.
COMPETITION
International trade financing is a highly competitive industry that is
dominated by large, multinational financial institutions such as Citibank, N.A.,
UBS, AG and Barclays Bank, plc among others. With respect to trade finance in or
relating to larger countries in the Region, primarily in South America, these
larger institutions are the Corporation's primary competition. The Corporation
has less competition from these multinational financial institutions providing
trade finance services in or relating to smaller countries in the Region,
primarily in Central America and the Caribbean, because the volume of trade
financing in such smaller countries has not been as attractive to these larger
institutions. With respect to Central American and Caribbean countries, as well
as United States domestic customers, the Corporation also competes with regional
institutions in the United States and smaller local financial institutions
engaged in trade finance. Many of the Corporation's competitors, particularly
multinational financial institutions, have substantially greater financial and
other resources than the Corporation.
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<PAGE> 25
Although to date the Corporation has competed successfully, on a limited
basis, in those countries in the Region which have high trade volumes, such as
Brazil and Argentina, there can be no assurance that the Corporation will be
able to continue competing successfully in those countries with either large,
multinational financial institutions or regional United States or local
financial institutions. Any significant decrease in the Corporation's trade
volume in such large-volume countries could adversely affect its results of
operations. Although the Corporation faces less competition from multinational
financial institutions in those smaller countries in the Region, particularly
countries in Central America and the Caribbean, there can be no assurance that
such financial institutions will not seek to finance greater volumes of trade in
those countries or that the Corporation would be able to successfully compete
with those financial institutions in the event of increased competition. In
addition, there can be no assurance that the Corporation will be able to
continue to compete successfully in smaller countries with the regional United
States financial institutions and smaller local financial institutions engaged
in trade finance in such countries. Continued political stability and
improvement in economic conditions in such countries is likely to result in
increased competition.
In addition, the Corporation faces competition in attracting deposits. The
Corporation competes with other insured depository institutions such as thrifts,
credit unions and banks, as well as uninsured investment alternatives including
money market funds. These competitors may offer higher rates than the
Corporation, which could result in the Corporation either attracting fewer
deposits or in requiring it to increase the rates it pays to attract deposits.
Increased deposit competition could adversely affect the Corporation's results
of operations.
SUPERVISION AND REGULATION
Bank holding companies and national banks operate in a highly regulated
environment and are subject to supervision and examination by federal regulatory
agencies. The Corporation is subject to the federal Bank Holding Company Act of
1956, as amended (the "BHC Act"), and to regulation and supervision by the FRB.
The Bank, as a national bank that is a member of the Federal Reserve System and
insured by the Federal Deposit Insurance Corporation (the "FDIC"), is subject to
the primary regulation and supervision of the Office of the Comptroller of the
Currency (the "OCC"), and secondarily, of the FDIC. Federal laws and regulations
govern numerous matters including changes in the ownership or control of banks
and bank holding companies, maintenance of adequate capital and the financial
condition of a financial institution, permissible types, amounts and terms of
extensions of credit and investments, permissible non-banking activities, the
level of reserves against deposits and restrictions on dividend payments. The
OCC and the FDIC possess cease and desist powers to prevent or remedy unsafe or
unsound practices or violations of law by national banks, and the FRB possesses
similar powers with respect to bank holding companies. These and other
restrictions limit the manner in which the Corporation and the Bank may conduct
business and obtain financing. Furthermore, the commercial banking business is
affected not only by general economic conditions, but also by the monetary
policies of the FRB. Changes in monetary or legislative policies may affect the
interest rates the Bank must offer to attract deposits and the interest rates it
must charge on its loans, as well as the manner in which it offers deposits and
makes loans. These monetary policies have had, and are expected to continue to
have, significant effects on the operating results of commercial banks,
including the Bank.
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<PAGE> 26
PENDING LITIGATION
On January 13, 1998, Development Specialists, Inc., the Liquidating Trustee
(the "Trustee") of the Model Imperial Liquidating Trust, which was established
under the Plan of Reorganization in the Model Imperial, Inc. ("Model Imperial")
Chapter 11 Bankruptcy proceeding, filed an action against the Bank in the United
States Bankruptcy Court for the Southern District of Florida. In the action, the
Trustee raised objections to the Bank's proof of claim in the Chapter 11
proceeding and is affirmatively seeking damages against the Bank of $34 million,
plus interest, costs and punitive damages for its alleged involvement with
former officers and directors of Model Imperial in a scheme to defraud Model
Imperial and its bank lenders. The action is one of several similar actions
filed by the Trustee against other defendants that were involved with Model
Imperial seeking the same damages as in the action against the Bank. Certain of
these defendants have settled such claims with the Trustee. Pretrial discovery
is currently proceeding and a motion has been made to remove the matter from the
bankruptcy court to the United States District Court.
Although the Corporation believes that the claims asserted by the Trustee
are without merit either as a matter of law or fact and is vigorously defending
the action, there can be no assurance that the Bank will be successful in
defending these claims. Any adverse outcome in this action could have a material
adverse effect on the Corporation's financial position, results of operations
and liquidity.
YEAR 2000 COMPLIANCE
The ability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
2-digit year after 1999 is commonly referred to as the "Year 2000" compliance
issue. The Year 2000 issue is the result of computer programs and equipment
which are dependent on "embedded chip technology" using two digits rather than
four to define the applicable year. Any of the Corporation's computer programs
or equipment that are date dependent may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, or a temporary inability to
process transactions, send invoices or engage in similar normal business
activities.
The Corporation began the process of assessing and preparing its computer
systems and applications to be functional on January 1, 2000 in June 1996. The
Corporation has also been communicating with third parties which it interfaces
with, such as customers, counter parties, payment systems, vendors and others to
determine whether they will be functional on or before January 1, 2000. The
Corporation has provided compliance certification questionnaires to each of its
customers in order to determine their ability to be Year 2000 compliant. If a
customer does not respond to the questionnaire or if its response does not
provide the Corporation with adequate assurance that such customer's failure to
be Year 2000 compliant would not have a material adverse effect on the
Corporation, the Corporation will require that all amounts owed to it by such
customer be satisfied in full prior to December 31, 1999. The Corporation has
also amended its Credit Policy Manual to require the Corporation to terminate
business with a customer unless the Corporation is assured that such customer is
or will be Year 2000 compliant in the near future, except in such instances
where the customer's failure to be Year 2000 compliant will not, either
individually or in the aggregate, have a material adverse effect on the
Corporation. There
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<PAGE> 27
can be no assurance that any of these parties will become Year 2000 compliant on
a timely basis.
We believe that the process of modifying all mission critical applications
of the Corporation will continue as planned and expect to have substantially all
of the testing and changes completed by December 31, 1998. In addition,
non-mission critical applications are scheduled to have substantially all the
testing and updates completed by June 30, 1999.
We believe the total costs to be Year 2000 compliant will be approximately
$250,000, which amount is not material to the Corporation's financial position
or results of operations. To date, the Corporation has incurred approximately
$50,000 of these estimated expenses. Any purchased hardware or software in
connection with this process will be capitalized in accordance with normal
company policy. Personnel and all other costs are being expensed as incurred.
The costs and dates on which the Corporation plans to complete the Year
2000 process are based on our best estimates. However, there can be no assurance
that these estimates will be achieved and actual results could differ.
HAMILTON BANCORP INC.
The Corporation, through its subsidiary, the Bank, provides global trade
finance, with particular emphasis on trade with and between the Region and the
United States or otherwise involving the Region. We believe that trade finance
provides the Corporation with the opportunity for substantial and profitable
growth, primarily with moderate credit risk, and that the Bank is the only
domestic financial institution headquartered in the State of Florida focusing
primarily on financing foreign trade. The Corporation has been able to take
advantage of substantial growth in this trade through its relationships with
approximately 500 correspondent banks and with importers and exporters in the
United States and the Region, as well as its location in South Florida, which is
becoming a focal point for trade in the Region. Much of this growth has been
associated with the adoption of economic stabilization policies in the major
countries of the Region.
The Corporation operates in all major countries throughout the Region and
has been particularly active in several smaller markets, such as Guatemala,
Ecuador, Panama and Peru, in addition to being active in larger markets, such as
Brazil. We believe that these smaller markets are not primary markets for
larger, multinational financial institutions, and, therefore, customers in such
markets do not receive a similar level of service from such institutions as that
provided by the Corporation. To enhance its position in certain markets, the
Corporation has made and currently holds minority investments in indigenous
financial institutions in Guyana, Ecuador and Peru. The Corporation has also
strengthened its relationships with correspondent financial institutions in the
Region by acting as placement agent, from time to time, for debt instruments or
certificates of deposit issued by such institutions.
The Corporation seeks to generate income by participating in multiple
aspects of trade transactions that generate both fee and interest income. The
Corporation earns fees primarily from opening and confirming letters of credit
and discounting acceptances, and earns interest on credit extended, primarily in
the form of commercial loans, for pre- and post-export financing, such as
refinancing of letters of credit, and to a lesser extent, from
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<PAGE> 28
discounted acceptances. As the economy in the Region has grown and stabilized,
the Corporation has begun to service larger customers, and a significant portion
of the Corporation's trade financing activities has shifted from providing
letters of credit to discounting commercial trade paper and originating loans.
This has resulted in relatively less fee income and increased interest income.
Increased competition has also resulted in a reduction in the growth rate of
letter of credit fees relative to the growth in the Corporation's loan
portfolio. Virtually all of the Corporation's business is conducted in United
States dollars. We believe that the Corporation's primary focus on trade
finance, its wide correspondent banking network in the Region, broad range of
services offered, management experience, reputation and prompt decision-making
and processing capabilities provide it with important competitive advantages in
the trade finance business. The Corporation seeks to mitigate its credit risk
through its knowledge and analysis of the markets it serves, by obtaining
third-party guarantees of both local banks and importers on many transactions,
by often obtaining security interests in goods being financed and by the
short-term, self-liquidating nature of trade transactions. At September 30,
1998, 75.1% of the Corporation's loan portfolio consisted of short-term trade
related loans maturing in 365 days or less, and 64.7% of such portfolio have
average remaining maturities of approximately 180 days. Credit is generally
extended under specific credit lines for each customer and country. These credit
lines are reviewed at least annually.
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<PAGE> 29
The following tables reflect the Corporation's growth and diversification
in financing trade flows between the United States and the Region in terms of
loans by country and cross-border outstandings by country. The aggregate amount
of the Corporation's cross-border outstandings by primary credit risk include
cash and demand deposits with other banks, interest earning deposits with other
banks, investment securities, due from customers on bankers acceptances, due
from customers on deferred payment letters of credit and loans-net. Exposure
levels in any given country at the end of each period may be impacted by the
flow of trade between the United States (and to a large extent Florida) and the
given countries, as well as the price of the underlying goods or commodities
being financed.
Loans by Country
(Dollars in thousands)
<TABLE>
<CAPTION>
AMOUNT AT AMOUNT AT
SEPTEMBER 30, PERCENT OF DECEMBER 31, PERCENT OF
COUNTRY 1998 TOTAL LOANS 1997 TOTAL LOANS
- ------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
United States............... $ 366,950 30.19% $236,834 24.55%
Argentina................... 44,057 3.63 58,477 6.06
Bolivia..................... 38,071 3.13 38,058 3.94
Brazil...................... 59,520 4.90 58,040 6.02
Colombia.................... 34,832 2.87 23,768 2.46
Dominican Republic.......... 50,547 4.16 40,161 4.16
Ecuador..................... 98,155 8.08 74,485 7.72
El Salvador................. 44,848 3.69 40,306 4.18
Guatemala................... 146,981 12.09 91,178 9.45
Honduras.................... 53,587 4.41 59,439 6.16
Jamaica(1).................. 21,397 1.76 -- --
Panama...................... 99,143 8.16 77,295 8.01
Peru........................ 63,524 5.23 68,094 7.06
Russia...................... 0 0.0 17,500 1.81
Venezuela(1)................ -- -- 16,299 1.69
Other(2).................... 93,749 7.70 64,860 6.73
---------- ----- -------- ------
Total............. $1,215,361 100.0% $964,794 100.00%
========== ===== ======== ======
</TABLE>
- -------------------------
(1) These countries had loans in periods presented which did not exceed 1% of
total loans.
(2) Consists of loans in countries in which loans did not exceed 1% of total
loans at one of the dates shown.
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Total Cross-Border Outstandings By Country
(Dollars in millions)
<TABLE>
<CAPTION>
AMOUNT AT AMOUNT AT PERCENT OF
SEPTEMBER 30, PERCENT OF DECEMBER 31, TOTAL
COUNTRY 1998 TOTAL ASSETS 1997 ASSETS
- ------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Argentina....................... $ 63 3.8% $ 69 5.2%
Bolivia......................... 37 2.2 44 3.3
Brazil.......................... 100 6.0 85 6.3
B.W. Indies..................... 19 1.1 11 0.8
Colombia........................ 35 2.1 24 1.8
Costa Rica(1)................... 13 0.8 -- --
Dominican Republic.............. 51 3.1 39 2.9
Ecuador......................... 135 8.1 90 6.7
El Salvador..................... 64 3.8 46 3.4
Guatemala....................... 143 8.6 92 6.9
Honduras........................ 61 3.7 52 3.9
Jamaica......................... 43 2.6 32 2.4
Nicaragua(1).................... -- -- 12 0.9
Other Europe(1)................. 32 1.9 -- --
Panama.......................... 101 6.1 72 5.4
Peru............................ 59 3.5 74 5.5
Russia.......................... 0 0.0 17 1.3
Suriname(1)..................... 24 1.4 -- --
Venezuela(1).................... 29 1.7 -- --
Other(2)........................ 91 5.6 39 2.8
------ ---- ---- ----
Total................. $1,100 66.1% $798 59.5%
====== ==== ==== ====
</TABLE>
- -------------------------
(1) These countries had cross-border outstandings in periods presented which did
not exceed 0.75% of total assets.
(2) Consists of cross-border outstandings to countries in which such
cross-border outstandings did not exceed 0.75% of the Corporation's total
assets at one of the dates shown.
Lending activities are funded primarily through domestic consumer and
commercial deposits gathered through a network of eight branches located in
Florida and Puerto Rico, as well as deposits received from correspondent banks,
corporate customers and private banking customers within the Region. The
Corporation opened its branch in San Juan, Puerto Rico in March 1998. The
Corporation's branches are strategically located in markets where it believes
that there is both a concentration of retail deposits and foreign trade
activity. The Corporation also participates in various community lending
activities and, under several United States and Florida laws and regulations,
the Bank is considered a minority-owned bank and is able to participate in
certain minority programs involving both deposits and loans.
The Corporation's total deposits were approximately $1.5 billion at
September 30, 1998 compared to approximately $1.1 billion as of December 31,
1997. Average interest bearing deposits increased by 51.3% to approximately $1.2
billion as of September 30, 1998 from $778.2 million as of December 31, 1997.
The increase in deposits during the nine
29
<PAGE> 31
month period was largely in certificates of deposits over $100,000 which
increased by $226.9 million. In addition, certificates of deposit of $100,000 or
less increased by $154.5 million. These deposits were used to further diversify
the Corporation's deposit base and as a cost effective alternative for the
short-term funding needs of the Corporation.
The Corporation has experienced asset growth and increased earnings since
it acquired the Bank in 1988, and has also achieved a high level of
profitability. The Corporation's average total loans increased from $370.6
million for the year ended December 31, 1995 to $737.9 million for the year
ended December 31, 1997, and during the nine months ended September 30, 1998,
average total loans increased to $1.1 billion from $670.0 million for the
comparable period of 1997. Additionally, net income increased from $8.0 million
for the year ended December 31, 1995 to $15.9 million for the year ended
December 31, 1997. During the nine months ended September 30, 1998, net income
increased to $16.1 million, or $1.56 per share on a fully diluted basis, from
$11.2 million, or $1.27 per share on a fully diluted basis, during the nine
months ended September 30, 1997. For the years ended December 31, 1996 and 1997,
return on average assets was 1.41% and 1.58%, respectively, and return on
average total equity was 24.29% and 20.05%, respectively. For the nine months
ended September 30, 1998, return on average assets was 1.48% (annualized) and
return on average total equity was 19.84% (annualized). Along with its growth,
the Corporation has maintained strong credit quality. Net loan charge-offs as a
percentage of average outstanding loans were 0.36% and 0.32% for the years ended
December 31, 1996 and 1997, respectively, and 0.63% for the nine months ended
September 30, 1998. At December 31, 1997 and September 30, 1998, non-performing
assets represented 0.64% and 0.53% of total loans, respectively. See "Selected
Consolidated Financial Data."
The Corporation's stockholders' equity at September 30, 1998 was $116.0
million compared to $98.3 million at December 31, 1997. During this period,
stockholders' equity increased by $17.7 million due to the retention of net
income of $16.1 million, as well as approximately $2.0 million from the exercise
of stock options. See "Selected Consolidated Financial Data."
The Corporation's goals are to continue to grow its earnings and maintain a
high level of profitability while maintaining strong credit quality by
continuing its focus on trade finance in the Region. The Corporation's strategy
is to:
- continue to take advantage of the growing trade in the Region;
- use the enhanced capital base resulting from this offering of Series A
Capital Securities to expand credit limits to existing customers;
- take advantage of its enhanced capital base to expand the Bank's
involvement with larger banks in certain of the larger markets in the
Region; and
- continue to expand its domestic branch system in order to attract
additional consumer and commercial deposits in the South Florida and
Puerto Rico markets.
The Corporation is a bank holding company incorporated under the laws of
Florida and established in Miami, Florida, in 1988 to acquire the Bank (then
known as Alliance National Bank), a national bank. The principal executive
offices of the Corporation are located at 3750 N.W. 87th Avenue, Miami, Florida
33178, and its telephone number is (305) 717-5500.
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<PAGE> 32
HAMILTON CAPITAL TRUST I
The Trust is a statutory business trust formed by the Corporation under
Delaware law pursuant to a Trust Agreement executed by the Corporation, as
sponsor for the Trust, and certain of its trustees and the filing of a
certificate of trust with the Delaware Secretary of State on December 3, 1998.
The Trust exists solely to:
- issue and sell the Series A Capital Securities and the Series A Common
Securities;
- use the proceeds from the sale of the Series A Capital Securities and
Series A Common Securities to purchase the Series A Subordinated
Debentures of the Corporation, which will be the only assets of the
Trust;
- maintain its status as an entity that is not an association taxable as a
corporation for federal income tax purposes; and
- engage in other activities that are necessary or incidental to these
purposes.
The Corporation will purchase all of the Series A Common Securities of the
Trust. The Series A Common Securities will represent an aggregate liquidation
amount equal to at least 3% of the Trust's total capitalization. The Series A
Capital Securities will represent the remaining 97% of the total capitalization
of the Trust. The Series A Common Securities will have terms substantially
identical to, and will rank equal in priority of payment with, the Series A
Capital Securities. However, if the Corporation defaults on the Series A
Subordinated Debentures, cash distributions and liquidation, redemption and
other amounts payable with respect to the Series A Common Securities will be
subordinate to the Series A Capital Securities in priority of payment.
The Trust has a term of approximately 55 years, but may be dissolved
earlier as provided in the Trust Agreement. The Trust's business and affairs are
conducted by the Trustees, each appointed by the Corporation as holder of the
Series A Common Securities. The Corporation has appointed the following Trustees
to conduct the Trust's business and affairs:
- Wilmington Trust Company, as Property Trustee;
- Wilmington Trust Company, as Delaware Trustee; and
- Three individuals who are employees and officers of the Corporation, as
Administrative Trustees.
As the sole holder of the Series A Common Securities, the Corporation can
replace or remove any of the Trustees. However, if an event of default occurs
and is continuing under the Trust Agreement, the Property Trustee and the
Delaware Trustee can only be replaced and removed by the holders of at least a
majority in aggregate liquidation amount of the Series A Capital Securities.
Only the Corporation, as owner of all of the Trust's Series A Common Securities,
can remove or replace the Administrative Trustees. The duties and obligations of
each Trustee are governed by the Trust Agreement.
The Corporation will pay all fees and expenses related to the Trust and the
offering of the Series A Capital Securities, as well as all of the ongoing costs
and expenses of the Trust, except that the Corporation will not be responsible
for the Trust's obligations under the Series A Capital Securities.
The Trust has no separate financial statements. The statements would not be
material to you because the Trust has no independent operations. The Trust
exists solely for the
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<PAGE> 33
reasons summarized above. The Series A Capital Securities will be fully and
unconditionally guaranteed by the Corporation as described later in this
Prospectus.
The principal executive office of the Trust is c/o Hamilton Bancorp Inc.,
3750 N.W. 87th Avenue, Miami, Florida 33178, and its telephone number is (305)
717-5500.
USE OF PROCEEDS
All of the proceeds from the sale of the Series A Capital Securities and
the Series A Common Securities will be invested by the Trust in the Series A
Subordinated Debentures. The net proceeds to the Corporation from the sale of
the Series A Subordinated Debentures are estimated to be $ million
($ million if the over-allotment option granted to the Underwriters is
exercised in full), net of commissions ($ , or $ , if the
Underwriters' over-allotment option is exercised in full) and other estimated
offering expenses (which are expected to be $ ). The Corporation
intends to invest the net proceeds from the sale of the Series A Subordinated
Debentures in the Bank to increase its capital level. Initially, the net
proceeds will be invested in short-term investment grade financial securities.
The Corporation is required by the FRB to maintain certain levels of
capital for bank regulatory purposes. On October 21, 1996, the FRB announced
that cumulative preferred securities having the characteristics of the Series A
Capital Securities could be included as Tier 1 capital (up to 25% of Tier 1
capital) for bank holding companies. Such Tier 1 capital treatment, together
with the Corporation's ability to deduct, for federal income tax purposes,
interest payable on the Series A Subordinated Debentures, will provide the
Corporation with a more cost-effective means of obtaining capital for bank
regulatory purposes than other Tier 1 capital alternatives currently available
to it.
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<PAGE> 34
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation at September 30, 1998, and as adjusted to give effect to the
consummation of the offering of the Series A Capital Securities (without giving
effect to the exercise by the Underwriters of their over-allotment option) and
the issuance of the Series A Subordinated Debentures to the Trust. The following
data should be read in conjunction with the Consolidated Financial Statements
and Notes incorporated by reference herein to the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997 and Quarterly Report on
Form 10-Q for the quarter ended September 30, 1998. See "Use of Proceeds."
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Other borrowings.......................................... $ 6,116 $ 6,116
Guaranteed preferred beneficial interests in the
Corporation's Junior Subordinated Deferrable Interest
Debentures, Series A(1)................................. -- 11,000
Common stock, par value $0.01 per share: 75,000,000 shares
authorized, 10,050,062 shares issued and outstanding at
September 30, 1998...................................... 100 100
Capital surplus........................................... 58,314 58,314
Retained earnings......................................... 58,160 58,160
Net unrealized loss on securities available for sale, net
of taxes................................................ (552) (552)
-------- --------
Total stockholders' equity...................... 116,022 116,022
-------- --------
Total capitalization............................ $122,138 $133,138
======== ========
</TABLE>
- -------------------------
(1) As described herein, the sole assets of the Trust, which is a subsidiary of
the Corporation, will be $ million aggregate principal amount of the
Series A Subordinated Debentures, which will mature on
, 2028. The Corporation will own all of the Series A
Common Securities issued by the Trust. See "Description of Series A
Subordinated Debentures."
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<PAGE> 35
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of the Corporation, and, accordingly, the accounts of the Trust will be included
in the consolidated financial statements of the Corporation. The Series A
Capital Securities will be presented as a separate line item in the consolidated
balance sheet of the Corporation under the caption "Guaranteed Preferred
Beneficial Interests in the Corporation's Junior Subordinated Deferrable
Interest Debentures, Series A," and appropriate disclosures about the Series A
Capital Securities, the Series A Guarantee and the Series A Subordinated
Debentures will be included in the Notes to Consolidated Financial Statements.
For financial reporting purposes, the Corporation will record distributions
payable on the Series A Capital Securities and the Series A Common Securities as
an expense in the consolidated statements of income.
The Corporation has agreed that future financial reports of the Corporation
filed under the Exchange Act will (1) present the Series A Capital Securities
issued by the Trust as a separate line item entitled "Guaranteed Preferred
Beneficial Interests in the Corporation's Junior Subordinated Deferrable
Interest Debentures, Series A"; (2) include a footnote to the financial
statements, disclosure that the sole assets of the Trust are the Series A
Subordinated Debentures (specifying the principal amount, interest rate and
maturity date of such Series A Subordinated Debentures); and (3) if Staff
Accounting Bulletin 53 treatment is sought, include, in an audited footnote to
the consolidated financial statements, disclosure that (a) the Trust is wholly
owned, (b) the sole assets of the Trust are the Series A Subordinated Debentures
(specifying the principal amount, interest rate and maturity date of such Series
A Subordinated Debentures) and (c) the obligations of the Corporation under the
Series A Subordinated Debentures, the Indenture, the Trust Agreement and the
Series A Guarantee, in the aggregate, constitute a full and unconditional
guarantee by the Corporation of the Trust's obligations under the Series A
Capital Securities.
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<PAGE> 36
DESCRIPTION OF SERIES A CAPITAL SECURITIES
This summary of certain terms and provisions of the Series A Capital
Securities, which describes the material provisions thereof, does not purport to
be complete and is subject to, and qualified in its entirety by reference to,
the Trust Agreement, including the definitions therein of certain terms, and the
Trust Indenture Act, to each of which reference is hereby made. Wherever
particular defined terms of the Trust Agreement (as amended or supplemented from
time to time) are referred to herein, such defined terms are incorporated herein
by reference. The form of the Trust Agreement has been filed as an exhibit to
the Registration Statement of which this Prospectus forms a part.
GENERAL
The Series A Capital Securities of the Trust will rank pari passu and
payments will be made thereon pro rata, with the Series A Common Securities of
the Trust, except as described under "-- Subordination of Series A Common
Securities." Legal title to the Series A Subordinated Debentures will be held by
the Property Trustee in trust for the benefit of the holders of the Series A
Capital Securities. The Series A Guarantee executed by the Corporation for the
benefit of the holders of the Series A Capital Securities will be a guarantee on
a subordinated basis with respect to the Series A Capital Securities, but will
not guarantee payment of Distributions or amounts payable on redemption or
liquidation of such Series A Capital Securities when the Trust does not have
funds on hand available to make such payments. See "Description of Series A
Guarantee."
DISTRIBUTIONS
The Series A Capital Securities represent beneficial ownership interests in
the Trust, and Distributions on the Series A Capital Securities will be
cumulative, will accumulate from the date of original issuance and will be
payable at the annual rate of % on the stated liquidation amount of $10,
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year (each, a "Distribution Date"), to the holders of the Series A
Capital Securities on the relevant record dates. The record dates for the Series
A Capital Securities will be, for so long as the Series A Capital Securities
remain in book-entry form, one Business Day (as defined below) prior to the
relevant Distribution Date and, in the event the Series A Capital Securities are
not in book-entry form, the 15th day of the month in which the relevant
Distribution Date occurs. Distributions will accumulate from the date of
original issuance. The first Distribution Date for the Series A Capital
Securities will be , 199 . The period beginning on and
including the date of original issuance and ending on but excluding the first
Distribution Date and each successive period beginning on and including a
Distribution Date and ending on but excluding the next succeeding Distribution
Date is herein called a "Distribution Period." The amount of Distributions
payable for any Distribution Period will be computed on the basis of a 360-day
year consisting of twelve 30-day months. In the event that any Distribution Date
would otherwise fall on a day that is not a Business Day, such Distribution Date
shall be postponed to the next day that is a Business Day (without any
additional distributions or other payment in respect of such delay), unless it
would thereby fall in the next calendar year, in which event the Distribution
Date shall be brought forward to the immediately preceding Business Day. A
"Business Day" shall mean any day other than a Saturday or a Sunday, or a day on
which banking institutions in New York,
35
<PAGE> 37
New York, Wilmington, Delaware or Miami, Florida are authorized or required by
law or executive order to remain closed or a day on which the principal
corporate trust office of the Property Trustee is closed for business.
The revenue of the Trust available for distribution to holders of the
Series A Capital Securities will be limited to payments made by the Corporation
under the Series A Subordinated Debentures in which the Trustee will invest the
proceeds from the issuance and sale of the Series A Capital Securities and the
Series A Common Securities. See "Description of Series A Subordinated Debentures
- -- General." If the Corporation does not make interest payments on the Series A
Subordinated Debentures, the Property Trustee will not have funds available to
pay Distributions on the Series A Capital Securities and the Series A Common
Securities. The payment of Distributions (if and to the extent the Trust has
funds on hand legally available for the payment of such Distributions) will be
guaranteed by the Corporation to the extent set forth herein under "Description
of Series A Guarantee."
OPTION TO DEFER INTEREST PAYMENTS
So long as no Debenture Event of Default shall have occurred and be
continuing, the Corporation will have the right under the Indenture to elect to
defer the payment of interest on the Series A Subordinated Debentures, at any
time or from time to time, for a period not exceeding 20 consecutive quarterly
periods with respect to each Extension Period, provided that no Extension Period
shall end on a date other than an Interest Payment Date, or extend beyond the
Stated Maturity Date. Upon any such election, quarterly Distributions on the
Series A Capital Securities will be deferred by the Trust during such Extension
Period. Distributions to which you are entitled during any such Extension Period
will accumulate additional distributions thereon at the applicable periodic
Distribution Rate thereof, compounded quarterly from the relevant Distribution
Date, but not exceeding the interest rate then accruing on the Series A
Subordinated Debentures. The term "Distributions," as used herein, shall include
any such additional distributions.
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause the Extension Period to exceed 20 consecutive quarterly periods, to end on
a date other than an Interest Payment Date or to extend beyond the Stated
Maturity Date. Upon the termination of any Extension Period and the payment of
all amounts then due on any Interest Payment Date, the Corporation may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Corporation must give the Property Trustee, the Administrative Trustees and
the Debenture Trustee notice of its election of any such Extension Period (or an
extension thereof) at least five Business Days prior to the earlier of:
- the date the Distributions on the Series A Capital Securities would have
been payable except for the election to begin such Extension Period; and
- the date the Administrative Trustees are required to give notice to any
securities exchange or automated quotation system or to holders of such
Series A Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business
Days prior to such record date.
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<PAGE> 38
There is no limitation on the number of times that the Corporation may elect to
begin an Extension Period. See "Description of Series A Subordinated
Debentures -- Option to Extend Interest Payment Date" and "Certain Federal
Income Tax Consequences -- Original Issue Discount."
During any such Extension Period, the Corporation may not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of its
capital stock;
- make any payment of principal of, or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation
(including any other debentures) that rank pari passu with or junior in
right of payment to the Series A Subordinated Debentures; or
- make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation
(including other guarantees) if such guarantee ranks pari passu with or
junior in right of payment to the Series A Subordinated Debentures;
other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, the Corporation's common stock,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Series A Guarantee, (d) as a result of a reclassification of
the Corporation's capital stock or the exchange or conversion of one class or
series of its capital stock for another class or series of its capital stock,
(e) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged and (f) purchases of common stock
related to the issuance of common stock or rights under any of the Corporation's
benefit plans for its directors, officers or employees or any of the
Corporation's dividend reinvestment plans. The Corporation has no current
intention to exercise its right to defer payments of interest on the Series A
Subordinated Debentures.
The revenue of the Trust available for distribution to holders of the
Series A Capital Securities will be limited to payments under the Series A
Subordinated Debentures in which the Trust will invest the proceeds from the
issuance and sale of the Series A Capital Securities and the Series A Common
Securities. See "Description of Series A Subordinated Debentures -- General." If
the Corporation does not make interest payments on the Series A Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the Series A Capital Securities. The payment of Distributions
(if and to the extent the Trust has funds on hand legally available for the
payment of such Distributions) is guaranteed by the Corporation on a limited
basis as set forth herein under "Description of Series A Guarantee."
REDEMPTION
Upon the repayment on the Stated Maturity Date or prepayment, in whole or
in part, prior to the Stated Maturity Date of the Series A Subordinated
Debentures (other than following the distribution of the Series A Subordinated
Debentures to the holders of the
37
<PAGE> 39
Trust Securities), the proceeds from such repayment or prepayment shall be
applied by the Property Trustee (subject to the Property Trustee having received
written notice no later than 45 days prior to such repayment) to redeem a Like
Amount (as defined below) of the Trust Securities, upon not less than 30 nor
more than 60 days' notice of a date of redemption (the "Redemption Date"), at
the Redemption Price, which shall be equal to 100% of the corresponding
principal amount of Series A Subordinated Debentures so repaid or prepaid, as
the case may be, plus accrued and unpaid interest thereon to the date of
redemption. See "Description of Series A Subordinated Debentures -- Optional
Prepayment" and "-- Special Event Prepayment." If less than all of the Series A
Subordinated Debentures are to be prepaid on a Redemption Date, then the
proceeds of such prepayment shall be allocated pro rata to the Trust Securities.
Upon the entry of an order for the dissolution of the Trust by a court of
competent jurisdiction, the Series A Subordinated Debentures thereafter will be
subject to optional prepayment in whole, but not in part, on or after
, 2008.
"Like Amount" means: (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Series A Junior Subordinated Debentures to be paid in accordance with
their terms; and (ii) with respect to a distribution of Series A Subordinated
Debentures upon the liquidation of the Trust, Series A Subordinated Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the holder to whom such Series A Subordinated Debentures are
distributed.
The Corporation will have the right to prepay the Series A Subordinated
Debentures: (i) in whole or in part, on or after , 2008;
and (ii) in whole but not in part, at any time prior to ,
2008, upon the occurrence of certain events, in each case at the Prepayment
Price (as described in "Description of Series A Subordinated
Debentures -- Optional Prepayment") and subject to the receipt of any required
regulatory approval. See "Description of Series A Subordinated Debentures --
Optional Prepayment" and "-- Special Event Prepayment."
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF SERIES A SUBORDINATED DEBENTURES
The Corporation will have the right at any time to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause the Series A Subordinated Debentures to be distributed
to the holders of the Trust Securities in liquidation of the Trust. Such right
is subject to: (1) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of Series A
Capital Securities; and (2) receipt of any required regulatory approval.
The Trust automatically shall dissolve upon the first to occur of: (1)
certain events of bankruptcy, dissolution or liquidation of the Corporation; (2)
the distribution of a Like Amount of the Series A Subordinated Debentures to the
holders of the Trust Securities, if the Corporation, as sponsor, has given
written direction to the Property Trustee to dissolve the Trust (which direction
is optional and, except as described above, wholly within the discretion of the
Corporation, as sponsor); (3) redemption of all of the Trust Securities as
described under "-- Redemption;" (4) expiration of the term of the Trust; and
(5) the entry of an order for the dissolution of the Trust by a court of
competent jurisdiction.
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<PAGE> 40
If a dissolution occurs as described in clauses (1), (2), (4), or (5)
above, the Trust shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to the
holders of the Trust Securities a Like Amount of the Series A Subordinated
Debentures, unless such distribution is determined by the Property Trustee not
to be practicable, in which event such holders will be entitled to receive out
of the assets of the Trust legally available for distribution to holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the aggregate of the Liquidation Amount plus accumulated
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Trust has insufficient assets on hand legally available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Trust Securities shall be paid on a pro rata basis,
except that if a Debenture Event of Default has occurred and is continuing, the
Series A Capital Securities shall have a priority over the Series A Common
Securities. See "-- Subordination of Series A Common Securities."
If the Corporation elects not to prepay the Series A Subordinated
Debentures prior to maturity in accordance with their terms and either elects
not to or is unable to liquidate the Trust and distribute the Series A
Subordinated Debentures to holders of the Trust Securities, the Trust Securities
will remain outstanding until the repayment of the Series A Subordinated
Debentures on the Stated Maturity Date.
After the liquidation date is fixed for any distribution of Series A
Subordinated Debentures to holders of the Trust Securities: (1) the Trust
Securities will no longer be deemed to be outstanding; (2) DTC or its nominee
will receive, in respect of each registered global certificate, if any,
representing Trust Securities and held by it, a registered global certificate or
certificates representing the Series A Subordinated Debentures to be delivered
upon such distribution; and (3) any certificates representing Trust Securities
not held by DTC or its nominee will be deemed to represent Series A Subordinated
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their agent for
cancellation, whereupon the Corporation will issue to such holder, and the
Debenture Trustee will authenticate, a certificate representing such Series A
Subordinated Debentures.
There can be no assurance as to the market prices for the Series A Capital
Securities or the Series A Subordinated Debentures that may be distributed in
exchange for the Series A Capital Securities if a dissolution and liquidation of
the Trust were to occur. Accordingly, the Series A Capital Securities that you
purchase, or the Series A Subordinated Debentures that you may receive upon a
dissolution and liquidation of the Trust, may trade at a discount to the price
that you paid to purchase the Series A Capital Securities offered hereby.
REDEMPTION PROCEDURES
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Series A Subordinated Debentures. Any redemption of Trust
Securities shall be made and the
39
<PAGE> 41
applicable Redemption Price shall be payable on the Redemption Date only to the
extent that the Trust has funds legally available for the payment of such
applicable Redemption Price. See also "-- Subordination of Series A Common
Securities."
If the Trust gives a notice of redemption in respect of the Series A
Capital Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds legally are available, with respect to the Series A
Capital Securities held by DTC or its nominees, the Property Trustee will
deposit or cause the Paying Agent (as defined herein) to deposit irrevocably
with DTC funds sufficient to pay the applicable Redemption Price. See "-- Form,
Denomination, Book-Entry Procedures and Transfer." With respect to the Series A
Capital Securities held in certificated form, the Property Trustee, to the
extent funds are legally available, will irrevocably deposit with the Paying
Agent for the Series A Capital Securities funds sufficient to pay the applicable
Redemption Price and will give such Paying Agent irrevocable instructions and
authority to pay the applicable Redemption Price to the holders thereof upon
surrender of their certificates evidencing the Series A Capital Securities. See
"-- Payment and Paying Agency." Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date shall be payable to the holders of
such Series A Capital Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of the Series A Capital Securities called for redemption will cease,
except the right of the holders of such Series A Capital Securities to receive
the applicable Redemption Price, but without interest on such Redemption Price,
and such Series A Capital Securities will cease to be outstanding. In the event
that any Redemption Date of Series A Capital Securities is not a Business Day,
then the applicable Redemption Price payable on such date will be paid on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such next succeeding
Business Day falls in the next calendar year, such payment shall be made on the
immediately preceding Business Day. In the event that payment of the applicable
Redemption Price is improperly withheld or refused and not paid either by the
Trust or by the Corporation (as described under "Description of Series A
Guarantee") pursuant to the Series A Guarantee: (1) Distributions on Series A
Capital Securities will continue to accumulate at the then applicable rate, from
the Redemption Date originally established by the Trust to the date such
applicable Redemption Price is actually paid; and (2) the actual payment date
will be the Redemption Date for purposes of calculating the applicable
Redemption Price.
Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Corporation defaults in payment of the applicable
Redemption Price on, or in the repayment of, the Series A Subordinated
Debentures, on and after the Redemption Date, Distributions will cease to accrue
on the Trust Securities called for redemption.
Subject to applicable law (including, without limitation, U.S. federal
securities laws), the Corporation or its subsidiaries may at any time and from
time to time purchase outstanding Series A Capital Securities by tender, in the
open market or by private agreement.
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<PAGE> 42
SUBORDINATION OF SERIES A COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Series A
Capital Securities and the Series A Common Securities, as applicable, shall be
made pro rata based on the Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date a Debenture Event
of Default shall have occurred and be continuing, no payment of any Distribution
on, or applicable Redemption Price of, any of the Series A Common Securities,
and no other payment on account of the redemption, liquidation or other
acquisition of the Series A Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
outstanding Series A Capital Securities for all Distribution periods terminating
on or prior thereto, or in the case of payment of the applicable Redemption
Price the full amount of such Redemption Price, shall have been made or provided
for, and all funds available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions on, or Redemption Price of, the
Series A Capital Securities then due and payable.
In the case of any Event of Default, the Corporation, as holder of all of
the Series A Common Securities, will be deemed to have waived any right to act
with respect to such Event of Default until the effect of such Event of Default
shall have been cured, waived or otherwise eliminated. Until any such Event of
Default has been so cured, waived or otherwise eliminated, the Property Trustee
shall act solely on behalf of the holders of the Series A Capital Securities and
not on behalf of the Corporation as holder of the Series A Common Securities,
and only the holders of the Series A Capital Securities will have the right to
direct the Property Trustee to act on their behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of a Debenture Event of Default under the Indenture
constitutes an "Event of Default" under the Trust Agreement. See "Description of
Series A Subordinated Debentures -- Debenture Events of Default."
The Trust Agreement provides that within ten (10) days after the occurrence
of any Event of Default actually known to the Property Trustee, the Property
Trustee shall transmit notice of such Event of Default to the holders of the
Series A Capital Securities, the Administrative Trustees and the Corporation, as
sponsor, unless such Event of Default shall have been cured or waived. The
Corporation, as sponsor, and the Administrative Trustees are required to file
annually with the Property Trustee a certificate as to whether or not they are
in compliance with all the conditions and covenants applicable to them under the
Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Series
A Capital Securities shall have a preference over the Series A Common Securities
as described under "-- Liquidation of the Trust and Distribution of Series A
Subordinated Debentures" and "-- Subordination of Series A Common Securities."
The existence of an Event of Default does not entitle the holders of Series A
Capital Securities to accelerate maturity thereof.
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<PAGE> 43
REMOVAL OF TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
the Property Trustee and the Delaware Trustee may be removed at any time by the
holder of the Series A Common Securities. If a Debenture Event of Default has
occurred and is continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by the holders of a majority in Liquidation Amount of the
outstanding Series A Capital Securities. In no event will the holders of the
Series A Capital Securities have the right to vote to appoint, remove or replace
the Administrative Trustees, which voting rights are vested exclusively in the
Corporation as the holder of all of the Series A Common Securities. No
resignation or removal of the Property Trustee and the Delaware 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 TRUSTEES
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
Person succeeding to all or substantially all of the corporate trust business of
such Trustee, shall be the successor of such Trustee under the Trust Agreement,
provided such Person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other Person,
except as described below or as otherwise described under "-- Liquidation of the
Trust and Distribution of Series A Subordinated Debentures." The Trust may, at
the request of the Corporation, as sponsor, with the consent of the
Administrative Trustees but without the consent of the holders of the Series A
Capital Securities, the Property Trustee or the Delaware Trustee, merge with or
into, consolidate, amalgamate or be replaced by or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to a trust
organized as such under the laws of any State; provided, that:
- such successor entity either (a) expressly assumes all of the obligations
of the Trust with respect to the Trust Securities or (b) substitutes for
the Trust Securities other securities having substantially the same terms
as the Trust Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Trust Securities rank in
priority with respect to distributions and payments upon liquidation,
redemption and otherwise;
- the Corporation expressly appoints a trustee of such successor entity
possessing the same powers and duties as the Property Trustee with
respect to the Series A Subordinated Debentures;
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<PAGE> 44
- the Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange
or other organization on which the Trust Securities are then listed or
quoted, if any;
- if the Series A Capital Securities (including any Successor Securities)
are rated by any nationally recognized statistical rating organization
prior to such transaction, such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Series A
Capital Securities (including any Successor Securities) or, if the Series
A Subordinated Debentures are so rated, the Series A Subordinated
Debentures, to be downgraded by any such nationally recognized
statistical rating organization;
- such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect;
- such successor entity has a purpose substantially identical to that of
the Trust;
- prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Corporation has received an opinion
from independent counsel to the Trust experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than
any dilution of such holders' interests in the new entity) and (b)
following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the
Investment Company Act; and
- the Corporation or any permitted successor or assignee owns all of the
common securities of such successor entity and guarantees the obligations
of such successor entity under the Successor Securities at least to the
extent provided by the Series A Guarantee and the Common Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to
be classified as an association taxable as a corporation for U.S. federal income
tax purposes.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "-- Mergers, Consolidations,
Amalgamations or Replacements of the Trust" and "Description of Series A
Guarantee -- Amendments and Assignment" and as otherwise required by law and the
Trust Agreement, the holders of the Series A Capital Securities will have no
voting rights.
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The Trust Agreement may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities: (1) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement, which shall not be inconsistent
with the other provisions of the Trust Agreement; or (2) to modify, eliminate or
add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that at all times that any Trust Securities are outstanding
the Trust will not be classified as an association taxable as a corporation or
to enable the Trust to qualify as a grantor trust, in each case for U.S. federal
income tax purposes, or to ensure that the Trust will not be required to
register as an "investment company" under the Investment Company Act; provided,
however, that in the case of clause (1) such action shall not adversely affect
in any material respect the interests of the holders of the Series A Capital
Securities, and any such amendments of the Trust Agreement pursuant to the
foregoing shall become effective when notice thereof is given to the holders of
the Series A Capital Securities.
The Trust Agreement may be amended by the Trustees and the Corporation: (1)
with the consent of holders representing a majority (based upon Liquidation
Amount) of the outstanding Trust Securities; and (2) upon receipt by the
Trustees of an opinion of counsel experienced in such matters to the effect that
such amendment or the exercise of any power granted to the Trustees in
accordance with such amendment will not affect the Trust's classification as an
entity that is not an association taxable as a corporation or as being a grantor
trust for U.S. federal income tax purposes or the Trust's exemption from status
as an "investment company" under the Investment Company Act, provided that,
without the consent of each holder of Trust Securities, the Trust Agreement may
not be amended to: (a) 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 (b) 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 Series A Subordinated Debentures are held by the Property
Trustee, the Trustees shall not:
- direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or execute any trust or power
conferred on the Debenture Trustee with respect to the Series A
Subordinated Debentures;
- waive certain past defaults under the Indenture;
- exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of the Series A Subordinated Debentures; or
- consent to any amendment, modification or termination of the Indenture or
the Series A Subordinated Debentures, where such consent shall be
required;
without, in each case, obtaining the prior consent of the holders of a majority
in Liquidation Amount of all outstanding Series A Capital Securities; provided,
however, that where a consent under the Indenture would require the consent of
each holder of Series A Subordinated Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior approval of
each holder of the Series A Capital Securities.
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The Trustees shall not revoke any action previously authorized or approved
by a vote of the holders of the Series A Capital Securities except by subsequent
vote of such holders. The Property Trustee shall notify each holder of Series A
Capital Securities of any notice of default with respect to the Series A
Subordinated Debentures. In addition to obtaining the foregoing approvals of
such holders of the Series A Capital Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will not be classified as an
association taxable as a corporation for U.S. federal income tax purposes on
account of such action.
Any required approval of holders of Series A Capital Securities may be
given at a meeting of such holders convened for such purpose or pursuant to
written consent. The Property Trustee will cause a notice of any meeting at
which holders of Series A Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such holders has been taken, to
be given to each holder of record of Series A Capital Securities in the manner
set forth in the Trust Agreement.
No vote or consent of the holders of Series A Capital Securities will be
required for the Trust to redeem and cancel the Series A Capital Securities in
accordance with the Trust Agreement.
Notwithstanding that holders of the Series A Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Series A Capital Securities that are owned by the Corporation, the
Trustees or any affiliate of the Corporation or of any Trustee, shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
DEPOSITARY PROCEDURES
DTC has advised the Trust and the Corporation that DTC is a limited-purpose
trust company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(including the Underwriters), banks, trust companies, clearing corporations and
certain other organizations. Indirect access to DTC's system is also available
to other entities such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly (collectively, the "Indirect Participants"). Persons who are not
Participants may beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The ownership interest
and transfer of ownership interest of each actual purchaser of each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC also has advised the Trust and the Corporation that, pursuant to
procedures established by it, (1) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants designated by the Underwriters with
portions of the liquidation
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amount of the Global Capital Securities and (2) ownership of such interests in
the Global Capital Securities will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Capital
Securities).
REGISTRATION OF SERIES A CAPITAL SECURITIES
The Series A Capital Securities will be represented by global certificates
registered in the name of DTC or its nominee. Beneficial interests in the Series
A Capital Securities will be shown on, and transfers thereof will he effected
only through, records maintained by Participants. Except as described below,
Series A Capital Securities in certificated form will not be issued in exchange
for the global certificates. See "-- Exchange of Book-Entry Series A Capital
Securities for Certificated Series A Capital Securities."
You may hold your interests in the Series A global capital security
directly through DTC if you are a Participant, or indirectly through
organizations that are Participants. All interests in a Global Capital Security
will be subject to the procedures and requirements of DTC. The laws of some
states require that certain persons take physical delivery in certificated form
of securities that they own. Consequently, the ability to transfer beneficial
interests in a Global Capital Security to such persons will be limited to that
extent. Because DTC can act only on behalf of Participants, which in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having beneficial interests in a Global Capital Security to pledge such
interests to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of such interests, may be affected by the lack
of a physical certificate evidencing such interests. For certain other
restrictions on the transferability of the Capital Securities, see "-- Exchange
of Book-Entry Series A Capital Securities for Certificated Series A Capital
Securities."
Payments in respect of the Global Capital Security registered in the name
of DTC, or its nominee, will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms of
the Trust Agreement, the Property Trustee will treat the persons in whose names
the Series A Capital Securities, including the Global Capital Securities, are
registered as the owners thereof for the purpose of receiving such payments and
for any and all other purposes whatsoever. Consequently, neither the Property
Trustee nor any agent thereof has or will have any responsibility or liability
for:
- any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of
beneficial ownership interests in the Global Capital Securities, or for
maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the
beneficial ownership interests in the Global Capital Securities; or
- any other matter relating to the actions and practices of DTC or any of
its Participants or Indirect Participants. DTC has advised the Trust and
the Corporation that its current practice, upon receipt of any payment in
respect of securities such as the Series A Capital Securities, is to
credit the accounts of the relevant Participants with the payment on the
payment date, in amounts proportionate to their respective holdings in
liquidation amount of beneficial
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interests in the relevant security as shown on the records of DTC unless
DTC has reason to believe it will not receive payment on such payment
date.
Payments by the Participants and the Indirect Participants to the beneficial
owners of Series A Capital Securities will be governed by standing instructions
and customary practices and will be the responsibility of the Participants or
the Indirect Participants and will not be the responsibility of DTC, the
Property Trustee, the Trust or the Corporation. None of the Trust, the
Corporation or the Property Trustee will be liable for any delay by DTC or any
of its Participants or Indirect Participants in identifying the beneficial
owners of the Series A Capital Securities, and the Trust, the Corporation and
the Property Trustee may conclusively rely on and will be protected in relying
on instructions from DTC or its nominee for all purposes.
Any secondary market trading activity in interests in the Global Capital
Securities will settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will settle in same-day funds.
DTC has advised the Trust and the Corporation that it will take any action
permitted to be taken by a holder of Series A Capital Securities (including,
without limitation, the presentation of Series A Capital Securities for exchange
as described below) only at the direction of one or more Participants to whose
account with DTC interests in the Global Capital Securities are credited and
only in respect of such portion of the liquidation amount of the Series A
Capital Securities as to which such Participant or Participants has or have
given such direction. However, if there is an Event of Default under the Trust
Agreement, DTC reserves the right to exchange the Global Capital Securities for
Series A Capital Securities in certificated form and to distribute such Series A
Capital Securities to its Participants.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Trust and the Corporation believe to be
reliable, but neither the Trust nor the Corporation takes responsibility for the
accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Capital Securities among Participants in DTC, it is
under no obligation to perform or to continue to perform such procedures, and
such procedures may be discontinued at any time. None of the Trust, the
Corporation or the Property Trustee will have any responsibility or liability
for any aspect of the performance by DTC or its Participants or Indirect
Participants of any of their respective obligations under the rules and
procedures governing their operations or for maintaining, supervising or
reviewing any records relating to the Global Capital Securities that are
maintained by DTC or any of its Participants or Indirect Participants.
EXCHANGE OF BOOK-ENTRY SERIES A CAPITAL SECURITIES FOR CERTIFICATED SERIES A
CAPITAL SECURITIES
A Global Capital Security is exchangeable for Series A Capital Securities
in registered certificated form if: (1) DTC (a) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary within 90 days
of receipt of such notice, or (b) has ceased
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to be a clearing agency registered under the Exchange Act and the Trust
thereupon fails to appoint a successor Depositary within 90 days of becoming
aware of such condition; (2) the Corporation in its sole discretion elects to
cause the issuance of the Series A Capital Securities in certificated form; or
(3) there shall have occurred and be continuing an Event of Default or any event
which after notice or lapse of time or both would be an Event of Default under
the Trust Agreement. In addition, beneficial interests in a Global Capital
Security may be exchanged by or on behalf of DTC for certificated Series A
Capital Securities upon request by DTC, but only upon at least 20 days' prior
written notice given to the Property Trustee in accordance with DTC's customary
procedures. In all cases, certificated Series A Capital Securities delivered in
exchange for any Global Capital Security or beneficial interests therein will be
registered in the names, and issued in any approved denominations, requested by
or on behalf of the Depositary (in accordance with its customary procedures).
PAYMENT AND PAYING AGENCY
Payments in respect of the Series A Capital Securities held in global form
shall be made to the DTC, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates, or in respect of the Series A
Capital Securities that are not held by the DTC, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address shall
appear on the register. The paying agent (the "Paying Agent") shall initially be
the Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Corporation. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' notice to the
Property Trustee, the Administrative Trustees and the Corporation. In the event
that the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Administrative Trustees and the Corporation) to
act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Series A Capital Securities.
Registration of transfers of the Series A Capital Securities will be
effected without charge by or on behalf of the Trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Series A Capital Securities after they have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than upon the occurrence and during the
continuance of an Event of Default, will undertake to perform only such duties
as are specifically set forth in the Trust Agreement and, after such an Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any holder of Trust
Securities, unless it is offered reasonable indemnity against the costs,
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expenses and liabilities that might be incurred thereby. If no Event of Default
has occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the Trust
Agreement or is unsure of the application of any provision of the Trust
Agreement, and the matter is not one on which holders of the Series A Capital
Securities or the Series A Common Securities are entitled under the Trust
Agreement to vote, then the Property Trustee shall take such action as is
directed by the Corporation and, if not so directed, shall take such action as
it deems advisable and in the best interests of the holders of the Trust
Securities and will have no liability, except for its own bad faith, negligence
or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that: (1) the Trust will not
be deemed to be an "investment company" required to be registered under the
Investment Company Act; (2) the Trust will not be classified as an association
taxable as a corporation and may be classified as a grantor trust for U.S.
federal income tax purposes; and (3) the Series A Subordinated Debentures will
be treated as indebtedness of the Corporation for U.S. federal income tax
purposes. The Corporation and the Administrative Trustees are authorized to take
any action, not inconsistent with applicable law, the certificate of trust of
the Trust or the Trust Agreement, that the Corporation and the Administrative
Trustees determine in their discretion to be necessary or desirable for such
purposes, as long as such action does not materially adversely affect the
interests of the holders of the Trust Securities.
The Trust Agreement provides that (1) holders of the Trust Securities have
no preemptive or similar rights to subscribe for any additional Trust Securities
and (2) the issuance of Trust Securities is not subject to preemptive rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
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DESCRIPTION OF SERIES A SUBORDINATED DEBENTURES
This summary of certain terms and provisions of the Series A Subordinated
Debentures set forth below, which describes the material provisions thereof,
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the Indenture, and the Trust Indenture Act, to each of which
reference is hereby made. The Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Wilmington Trust
Company will act as Indenture Trustee ("Debenture Trustee") under the Indenture.
The Indenture is qualified under the Trust Indenture Act. Whenever particular
defined terms of the Indenture (as supplemented or amended from time to time)
are referred to herein, such defined terms are incorporated herein by reference.
GENERAL
Concurrently with the issuance of the Series A Capital Securities, the
Trust will invest the proceeds thereof, together with the consideration paid by
the Corporation for the Series A Common Securities, in the Series A Subordinated
Debentures issued by the Corporation. The Series A Subordinated Debentures will
bear interest at the annual rate of % of the principal amount thereof,
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year (each, an "Interest Payment Date"), commencing
, 199 , and at maturity to the person in whose name each
Series A Subordinated Debenture is registered at the close of business on the
record date immediately preceding such Interest Payment Date. The period
beginning on and including the date of original issuance of the Series A
Subordinated Debentures and ending on but excluding the first Interest Payment
Date and each successive period beginning on and including an Interest Payment
Date and ending on but excluding the next succeeding Interest Payment Date is
herein called an "Interest Period." It is anticipated that, until the
liquidation, if any, of the Trust, each Series A Subordinated Debenture will be
held by the Property Trustee in trust for the benefit of the holders of the
Series A Capital Securities. The amount of interest payable for any Interest
Period will be computed on the basis of a 360-day year consisting of twelve
30-day months. In the event that any Interest Payment Date would otherwise fall
on a day that is not a Business Day, such Interest Payment Date shall be
postponed to the next day that is a Business Day (without any interest or other
payment in respect of any such delay) unless it would thereby fall in the next
calendar year, in which event the Interest Payment Date shall be brought forward
to the immediately preceding Business Day. Accrued interest that is not paid on
the applicable Interest Payment Date will bear additional interest on the amount
thereof (to the extent permitted by law) at the rate of % per annum,
compounded quarterly from the relevant Interest Payment Date. The term
"interest" as used herein shall include quarterly interest payments and interest
on quarterly interest payments not paid on the applicable Interest Payment Date,
as applicable. Notwithstanding anything to the contrary, set forth above, if the
maturity date falls on a day that is not a Business Day, the payment of
principal and interest will be paid on the next succeeding Business Day, with
the same force and effect as if made on such maturity date and no interest on
such payments will accrue from and after the maturity date.
The Series A Subordinated Debentures will be issued as a Series of junior
subordinated deferrable interest debentures under the Indenture.
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The Series A Subordinated Debentures will mature on ,
2028 (the "Stated Maturity Date").
The Series A Subordinated Debentures will rank pari passu with all Other
Debentures and will be unsecured and will rank subordinate and junior in right
of payment to all Senior Indebtedness to the extent and in the manner set forth
in the Indenture. See "-- Subordination."
The Corporation is a bank holding company regulated by the FRB and almost
all of its operating assets are owned by the Bank. The Corporation is a legal
entity separate and distinct from its subsidiary. Holders of Series A
Subordinated Debentures should look only to the Corporation for payments on the
Series A Subordinated Debentures. The principal sources of the Corporation's
income are dividends, interest and fees from the Bank. The Corporation relies
primarily on dividends from the Bank to meet its obligations for payment of
principal and interest on its outstanding debt obligations and corporate
expenses. Dividend payments from the Bank are subject to regulatory limitations,
generally based on current and retained earnings, imposed by the various
regulatory agencies with authority over the Bank. Under the FDIA, an insured
depositary institution such as the Bank is prohibited from making capital
distributions, including the payment of dividends, if, after making such
distribution, the institution would become "undercapitalized" (as such term is
used in the statute). Based on the Bank's current financial condition, the
Corporation does not expect that this provision will have any impact on its
ability to obtain dividends from the Bank. During the first nine months of 1998,
the Bank paid $2.1 million in dividends to the Corporation, which reflected
4.42% of the total amount of dividends the Bank was permitted to pay as of
September 30, 1998 under existing supervisory practices. At September 30, 1998,
approximately $47.2 million of retained earnings of the Bank were available for
dividend declaration without prior regulatory approval. Payment of dividends by
the Bank is also subject to the respective Bank's profitability, financial
condition and capital expenditures and other cash flow requirements. The FRB has
stated that, as a matter of prudent banking, a bank or bank holding company
should not maintain its existing rate of cash dividends on common stock unless
(1) the organization's net income available to common shareholders over the past
year has been sufficient to fund fully the dividends; and (2) the prospective
rate of earnings retention appears consistent with the organization's capital
needs, asset quality, and overall financial condition. No assurance can be given
that the Bank will be able to pay dividends at past levels, or at all, in the
future.
In addition to restrictions on the payment of dividends, the Bank is
subject to certain restrictions imposed by federal law on any extensions of
credit to, and certain other transactions with, the Corporation and certain
other affiliates, and on investments in stock or other securities thereof. Such
restrictions prevent the Corporation and such other affiliates from borrowing
from the Bank unless the loans are at least 100% secured by various types of
collateral. Furthermore, such secured loans, other transactions and investments
by the Bank are generally limited in amount as to the Corporation and as to each
of such other affiliates to 10% of the Bank's capital and surplus and as to the
Corporation and all of such other affiliates to an aggregate of 20% of the
Bank's capital and surplus.
Because the Corporation is a holding company, its right to participate in
any distribution of assets of any subsidiary upon such subsidiary's liquidation
or reorganization or otherwise (and thus the ability of holders of the Series A
Capital Securities to benefit
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indirectly from such distribution), is subject to the prior claims of creditors
of that subsidiary (including depositors, in the case of the Bank), except to
the extent that the Corporation may itself be recognized as a creditor of that
subsidiary. At September 30, 1998, the Bank had total liabilities, including
deposits, of $1.5 billion. Accordingly, the Series A Subordinated Debentures
will be effectively subordinated to all existing and future liabilities of the
Bank (including the Bank's deposit liabilities) and all liabilities of any
future subsidiaries of the Corporation. The Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Corporation or
the Bank, including Senior Indebtedness. See "-- Subordination."
FORM, REGISTRATION AND TRANSFER
If the Series A Subordinated Debentures are distributed to the holders of
the Trust Securities, the Series A Subordinated Debentures may be represented by
one or more global certificates registered in the name of Cede & Co., as the
nominee of DTC. The depositary arrangements for such Series A Subordinated
Debentures are expected to be substantially similar to those in effect for the
Series A Capital Securities. For a description of DTC and the terms of the
depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Description of Series A
Capital Securities -- Form, Denomination, Book-Entry Procedures and Transfer."
PAYMENT AND PAYING AGENTS
Payment of principal of and interest on the Series A Subordinated
Debentures will be made at the office of the Debenture Trustee in Wilmington,
Delaware or at the office of such Paying Agent or Paying Agents as the
Corporation may designate from time to time, except that at the option of the
Corporation payment of any interest may be made, except in the case of Series A
Subordinated Debentures in global form: (1) by check mailed to the address of
the Person entitled thereto as such address shall appear in the register for
Series A Subordinated Debentures; or (2) by transfer to an account maintained by
the Person entitled thereto as specified in such register, provided that proper
transfer instructions have been received by the relevant Record Date. Payment of
any interest on any Series A Subordinated Debenture will be made to the Person
in whose name such Series A Subordinated Debenture is registered at the close of
business on the Record Date for such interest, except in the case of defaulted
interest. The Corporation may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent; however the Corporation will at all
times be required to maintain a Paying Agent in each place of payment for the
Series A Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of or
interest on any Series A Subordinated Debenture and remaining unclaimed for two
years after such principal or interest has become due and payable shall, at the
request of the Corporation, be repaid to the Corporation and the holder of such
Series A Subordinated Debenture shall thereafter look, as a general unsecured
creditor, only to the Corporation for payment thereof.
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OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation will have the right under the Indenture to defer the payment of
interest on the Series A Subordinated Debentures, at any time and from time to
time, for a period not exceeding 20 consecutive quarterly periods with respect
to each Extension Period, provided that no Extension Period shall end on a date
other than an Interest Payment Date or extend beyond the Stated Maturity Date.
At the end of such Extension Period, the Corporation must pay all interest then
accrued and unpaid (together with interest thereon at the rate of % per
annum, compounded quarterly from the relevant Interest Payment Date, to the
extent permitted by applicable law). During an Extension Period, interest will
continue to accrue, and holders of the Trust Securities while Trust Securities
are outstanding or, if the Series A Subordinated Debentures have been
distributed to holders of the Trust Securities, holders of Series A Subordinated
Debentures, will be required to continue to include that deferred interest in
gross income for U.S. federal income tax purposes on an accrual method of
accounting prescribed by the Code and Treasury regulation provisions on OID
prior to the receipt of cash attributable to that income. See "Certain Federal
Income Tax Consequences -- Original Issue Discount."
During any such Extension Period, the Corporation may not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the
Corporation's capital stock;
- make any payment of principal of, or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation
(including any Other Debentures) that rank pari passu with or junior in
right of payment to the Series A Subordinated Debentures; or
- make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation
(including any Other Guarantees) if such guarantee ranks pari passu with
or junior in right of payment to the Series A Subordinated Debentures;
other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, common stock of the Corporation,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Series A Guarantee, (d) as a result of a reclassification of
the Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged
and (f) purchases of common stock of the Corporation related to the issuance of
common stock or rights under any of the Corporation's benefit plans for its
directors, officers or employees or any of the Corporation's dividend
reinvestment plans. The Corporation has no current intention to exercise its
option to defer payments of interest on the Series A Subordinated Debentures.
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension
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Period to exceed 20 consecutive quarterly periods, end on a date other than an
Interest Payment Date or extend beyond the Stated Maturity Date. Upon the
termination of any such Extension Period and the payment of all interest then
accrued and unpaid (together with interest thereon at the rate of % per
annum, compounded quarterly, to the extent permitted by applicable law), the
Corporation may elect to begin a new Extension Period, subject to the
requirements set forth herein. No interest shall be due and payable during an
Extension Period, except at the end thereof.
The Corporation must give the Property Trustee, the Administrative Trustees
and the Debenture Trustee notice of its election of any Extension Period (or an
extension thereof) at least five Business Days prior to the earlier of:
- the date the Distributions on the Trust Securities would have been
payable except for the election to begin or extend such Extension Period;
or
- the date the Administrative Trustees are required to give notice to any
securities exchange or automated quotation system on which the Series A
Capital Securities may then be listed or quoted or to holders of Series A
Capital Securities of the record date for such Distributions; or
- the date such Distributions are payable, but in any event not less than
five Business Days prior to such record date. The Debenture Trustee shall
give notice of the Corporation's election to begin or extend a new
Extension Period to the holders of the Series A Capital Securities.
There is no limitation on the number of times that the Corporation may elect to
begin an Extension Period.
OPTIONAL PREPAYMENT
The Series A Subordinated Debentures will be prepayable, in whole or in
part, at the option of the Corporation on or after , 2008,
subject to the Corporation having received any required regulatory approval, at
a price (the "Prepayment Price") equal to 100% of the principal amount of the
Series A Subordinated Debentures so prepaid, plus accrued and unpaid interest
thereon, if any, to the date of prepayment.
SPECIAL EVENT PREPAYMENT
Prior to , 2008, if a Special Event has occurred and
is continuing, the Corporation may, at its option, and subject to receipt of any
required regulatory approval, prepay the Series A Subordinated Debentures, in
whole but not in part, at any time within 90 days of the occurrence of such
Special Event, at the Prepayment Price. If, following the occurrence of a
Special Event, the Corporation exercises its option to prepay the Series A
Subordinated Debentures, then the proceeds of that prepayment must be applied to
redeem a Like Amount of Trust Securities at the Redemption Price. See
"Description of Series A Capital Securities -- Redemption."
A "Special Event" means an Investment Company Event, a Regulatory Capital
Event or a Tax Event, as the case may be.
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An "Investment Company Event" means the receipt by the Corporation and the
Trust of an opinion of independent securities 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 regulation thereunder of the United States or any
rules, guidelines or policies of any applicable regulatory authority for
the Corporation; or
- any official administrative 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 original
issuance of the Trust Securities;
the Trust is, or within 90 days of the date of such opinion will be, considered
an "investment company" that is required to be registered under the Investment
Company Act.
A "Regulatory Capital Event" means the receipt by the Corporation of an
opinion of independent bank regulatory 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
rules, guidelines or policies of an applicable regulatory agency; or
- any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on or
after the date of original issuance of the Trust Securities;
the Series A Capital Securities do not constitute, or within 90 days of such
opinion will not constitute, Tier 1 capital (or its then equivalent if the
Corporation were subject to such capital requirement).
A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of independent tax 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
- any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or
after the date of original issuance of the Trust Securities;
there is more than an insubstantial risk that:
- the Trust is, or will be within 90 days of the date of such opinion,
subject to U.S. federal income tax with respect to any income received or
accrued on the Series A Subordinated Debentures;
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- interest payable by the Corporation on the Series A Subordinated
Debentures is not, or within 90 days of the date of such opinion will not
be, deductible by the Corporation, in whole or in part, for U.S. federal
income tax purposes; or
- the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the prepayment date to each holder of Series A Subordinated
Debentures to be prepaid at its registered address. Unless the Corporation
defaults in payment of the Prepayment Price, on the prepayment date interest
shall cease to accrue on such Series A Subordinated Debentures called for
prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Series A Subordinated Debentures such amounts as may
be necessary in order that the amount of Distributions then due and payable by
the Trust on the outstanding Trust Securities shall not be reduced as a result
of any additional taxes, duties or other governmental charges to which the Trust
has become subject as a result of a Tax Event ("Additional Sums").
CERTAIN COVENANTS OF THE CORPORATION
The Corporation will covenant that it will not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the
Corporation's capital stock;
- make any payment of principal of, or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation
(including any Other Debentures) that rank pari passu with or junior in
right of payment to the Series A Subordinated Debentures; or
- make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation
(including any Other Guarantees) if such guarantee ranks pari passu with
or junior in right of payment to the Series A Subordinated Debentures;
other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, common stock of the Corporation,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Series A Guarantee, (d) as a result of a reclassification of
the Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of common stock of the Corporation related to the issuance of
common stock or rights under any of the Corporation's benefit plans for its
directors, officers or employees or any of the Corporation's dividend
reinvestment plans, if at such time: (1) there shall have occurred
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any event of which the Corporation has actual knowledge that (A) is, or with the
giving of notice or the lapse of time, or both, would be, a Debenture Event of
Default and (B) in respect of which the Corporation shall not have taken
reasonable steps to cure; (2) the Corporation shall be in default with respect
to its payment of any obligations under the Series A Guarantee; or (3) the
Corporation shall have given notice of its election to exercise its right to
commence an Extension Period as provided in the Indenture and such Extension
Period, or any extension thereof, shall have commenced and be continuing.
So long as the Trust Securities remain outstanding, the Corporation also
will covenant:
- to directly or indirectly maintain 100% direct or indirect ownership of
the Series A Common Securities; provided, however, that any permitted
successor of the Corporation under the Indenture may succeed to the
Corporation's ownership of such Series A Common Securities;
- to use commercially reasonable efforts to cause the Trust (a) to remain a
business trust, except in connection with the distribution of Series A
Subordinated Debentures to the holders of Trust Securities in liquidation
of the Trust, the redemption of all of the Trust Securities, or certain
mergers, consolidations or amalgamations, each as permitted by the Trust
Agreement, and (b) to otherwise continue not to be classified as an
association taxable as a corporation and to be classified as a grantor
trust for U.S. federal income tax purposes;
- to use commercially reasonable efforts to cause each holder of Trust
Securities to be treated as owning an undivided beneficial interest in
the Series A Subordinated Debentures; and
- to not cause, as sponsor of the Trust, or permit, as holder of the Series
A Common Securities, the dissolution, winding-up or liquidation of the
Trust, except as provided in the Trust Agreement.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of Series A Subordinated Debentures, amend the
Indenture for specified purposes, including, among other things, curing
ambiguities, defects or inconsistencies, provided that any such action does not
materially adversely affect the interest of the holders of Series A Subordinated
Debentures, and qualifying, or maintaining the qualification of, the Indenture
under the Trust Indenture Act. The Indenture contains provisions permitting the
Corporation and the Debenture Trustee, with the consent of the holders of a
majority in aggregate principal amount of Series A Subordinated Debentures, to
modify the Indenture in a manner affecting the rights of the holders of Series A
Subordinated Debentures; provided that no such modification may, without the
consent of the holders of each outstanding Series A Subordinated Debenture so
affected:
- change the Stated Maturity Date, or reduce the principal amount of the
Series A Subordinated Debentures;
- reduce the amount payable on prepayment thereof or reduce the rate or
extend the time of payment of interest thereon except pursuant to the
Corporation's right
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under the Indenture to defer the payment of interest as provided therein
(see "-- Option to Extend Interest Payment Date");
- make the principal of, or interest on, the Series A Subordinated
Debentures payable in any coin or currency other than that provided in
the Series A Subordinated Debentures;
- impair or affect the right of any holder of Series A Subordinated
Debentures to institute suit for the payment thereof; or
- reduce the percentage of principal amount of Series A Subordinated
Debentures, the holders of which are required to consent to any such
modification of the Indenture.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Series A Subordinated Debentures constitutes a
"Debenture Event of Default" (whatever the reason for such Debenture Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
- failure for 30 days to pay any interest (including compounded interest
and Additional Sums, if any) on the Series A Subordinated Debentures or
any Other Debentures when due (subject to the deferral of any interest
due date in the case of an Extension Period with respect to the Series A
Subordinated Debentures or Other Debentures as the case may be); or
- failure to pay any principal or premium, if any, on the Series A
Subordinated Debentures or any Other Debentures when due whether at
maturity, upon prepayment, by declaration of acceleration of maturity or
otherwise; or
- failure to observe or perform, in any material respect, any other
covenant contained in the Indenture for 90 days after written notice to
the Corporation from the Debenture Trustee or to the Corporation and the
Debenture Trustee from the holders of at least 25% in aggregate
outstanding principal amount of Series A Subordinated Debentures; or
- certain events related to bankruptcy, insolvency or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of the
Series A Subordinated Debentures have, subject to certain exceptions, the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee. The Debenture Trustee or the holders of not
less than 25% in aggregate outstanding principal amount of the Series A
Subordinated Debentures may declare the principal due and payable immediately
upon a Debenture Event of Default. The holders of a majority in aggregate
outstanding principal amount of the Series A Subordinated Debentures may annul
such declaration and waive the default if the default (other than the
non-payment of the principal of the Series A Subordinated Debentures which has
become due solely by such acceleration) has been cured and a sum sufficient to
pay all
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matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Series A Subordinated Debentures affected thereby may, on behalf of the holders
of all the Series A Subordinated Debentures, waive any past default, 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 Series A Subordinated Debenture.
The Indenture requires an annual filing by the Corporation with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the Indenture.
The Indenture provides that the Debenture Trustee may withhold notice of a
Debenture Event of Default from the holders of the Series A Subordinated
Debentures if the Debenture Trustee considers it in the interest of such holders
to do so.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF SERIES A CAPITAL SECURITIES
If a Debenture Event of Default shall have occurred and be continuing and
shall be attributable to the failure of the Corporation to pay the principal of,
or interest (including compounded interest and Additional Sums, if any) on the
Series A Subordinated Debentures on the due date, a holder of Series A Capital
Securities may institute a Direct Action. The Corporation may not amend the
Indenture to remove the foregoing right to bring a Direct Action without the
prior written consent of the holders of all of the Series A Capital Securities.
Notwithstanding any payments made to a holder of Series A Capital Securities by
the Corporation in connection with a Direct Action, the Corporation shall remain
obligated to pay the principal of or interest (including compounded interest and
Additional Sums, if any) on the Series A Subordinated Debentures, and the
Corporation shall be subrogated to the rights of the holder of such Series A
Capital Securities with respect to payments on the Series A Capital Securities
to the extent of any payments made by the Corporation to such holder in any
Direct Action.
The holders of the Series A Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Series A Subordinated Debentures, unless there
shall have been an Event of Default under the Trust Agreement. See "Description
of Series A Capital Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties as an
entirety or substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease its
properties as an entirety or substantially as an entirety to the Corporation,
unless:
- in case the Corporation consolidates with or merges into another Person
or conveys or transfers its properties as an entirety or substantially as
an entirety to any Person,
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the successor Person is organized under the laws of the United States or
any state or the District of Columbia, and such successor Person
expressly assumes the Corporation's obligations under the Indenture with
respect to the Series A Subordinated Debentures;
- immediately after giving effect thereto, no Debenture Event of Default,
and no event which, after notice or lapse of time or both, would become a
Debenture Event of Default, shall have occurred and be continuing; and
- certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the Series
A Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Corporation that may adversely affect holders of the
Series A Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Series A
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (1) have become due and payable or (2) will become due and payable
at maturity or called for prepayment within one year, and the Corporation
deposits or causes to be deposited with the Debenture Trustee funds, in trust,
for the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the Series A Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation, for the principal and interest
(including compounded interest and Additional Sums, if any) to the date of the
prepayment or to the Stated Maturity Date, as the case may be, then the
Indenture will cease to be of further effect (except as to the Corporation's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Corporation will be deemed to have satisfied and discharged the Indenture.
SUBORDINATION
In the Indenture, the Corporation has covenanted and agreed that any Series
A Subordinated Debentures issued thereunder will be subordinate and junior in
right of payment to all Senior Indebtedness to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Indebtedness
will first be entitled to receive payment in full of all Allocable Amounts (as
defined below) in respect of such Senior Indebtedness before the holders of
Series A Subordinated Debentures will be entitled to receive or retain any
payment in respect thereof.
In the event of the acceleration of the maturity of Series A Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of such
Senior Indebtedness before the holders of Series A Subordinated Debentures will
be entitled to receive or retain any payment in
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respect of the principal of (or premium, if any) or interest, if any, on the
Series A Subordinated Debentures.
No payments on account of principal or interest, if any, in respect of the
Series A Subordinated Debentures may be made if there shall have occurred and be
continuing a default in any payment with respect to Senior Indebtedness, or an
event of default with respect to any Senior Indebtedness resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
"Allocable Amounts," when used with respect to any Senior Indebtedness,
means all amounts due or to become due on such Senior Indebtedness less, if
applicable, any amount which would have been paid to, and retained by, the
holders of such Senior Indebtedness (whether as a result of the receipt of
payments by the holders of such Senior Indebtedness from the Corporation or any
other obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such Senior
Indebtedness pursuant to any provision of such indebtedness for the payment over
of amounts received on account of such indebtedness to the holders of such
Senior Indebtedness or otherwise) but for the fact that such Senior Indebtedness
is subordinate or junior in right of payment to (or subject to a requirement
that amounts received on such Senior Indebtedness be paid over to obligees on)
trade accounts payable or accrued liabilities arising in the ordinary course of
business.
"Indebtedness" shall mean, whether recourse is to all or a portion of the
assets of the Corporation and whether or not contingent:
- every obligation of the Corporation for money borrowed;
- every obligation of the Corporation evidenced by bonds, debentures, notes
or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses;
- every reimbursement obligation of the Corporation with respect to letters
of credit, banker's acceptances or similar facilities issued for the
account of the Corporation;
- every obligation of the Corporation issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of
business);
- every capital lease obligation of the Corporation;
- all indebtedness of the Corporation whether incurred on or prior to the
date of the Indenture or thereafter incurred, for claims in respect of
derivative products, including interest rate, foreign exchange rate and
commodity forward contracts, options and swaps and similar arrangements;
and
- every obligation of the type referred to in the clauses above of another
Person and all dividends of another Person the payment of which, in
either case, the Corporation has guaranteed or is responsible or liable
for, directly or indirectly, as obligor or otherwise.
"Indebtedness Ranking on a Parity with the Series A Subordinated
Debentures" shall mean (1) Indebtedness, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred, to the
extent such Indebtedness by its terms ranks
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equally with and not prior to the Series A Subordinated Debentures in the right
of payment upon the happening of the dissolution, winding-up, liquidation or
reorganization of the Corporation; and (2) all other debt securities, and
guarantees in respect of those debt securities, issued to any trust other than
the Trust, or a trustee of such trust, partnership or other entity affiliated
with the Corporation that is a financing vehicle of the Corporation (a
"financing entity") in connection with the issuance by such financing entity of
equity securities or other securities guaranteed by the Corporation pursuant to
an instrument that ranks pari passu with or junior in right of payment to the
Series A Guarantee. The securing of any Indebtedness, otherwise constituting
Indebtedness Ranking on a Parity with the Series A Subordinated Debentures,
shall not be deemed to prevent such Indebtedness from constituting Indebtedness
Ranking on a Parity with the Series A Subordinated Debentures.
"Indebtedness Ranking Junior to the Series A Subordinated Debentures" shall
mean any Indebtedness, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, to the extent such
Indebtedness by its terms ranks junior to and not equally with or prior to the
Series A Subordinated Debentures (and any other Indebtedness Ranking on a Parity
with the Series A Subordinated Debentures) in right of payment upon the
happening of the dissolution, winding-up, liquidation or reorganization of the
Corporation. The securing of any Indebtedness, otherwise constituting
Indebtedness Ranking Junior to the Series A Subordinated Debentures, shall not
be deemed to prevent such Indebtedness from constituting Indebtedness Ranking
Junior to the Series A Subordinated Debentures.
"Senior Indebtedness" shall mean the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation whether
or not such claim for post-petition interest is allowed in such proceedings), on
all Indebtedness, whether outstanding on the date of execution of the Indenture
or thereafter created, assumed or incurred, except Indebtedness Ranking on a
Parity with the Series A Subordinated Debentures or Indebtedness Ranking Junior
to the Series A Subordinated Debentures, and any deferrals, renewals or
extensions of such Senior Indebtedness.
The Corporation is a bank holding company and almost all of the operating
assets of the Corporation are owned by the Bank. The Corporation relies
primarily on dividends from the Bank to meet its corporate expenses. The
Corporation is a legal entity separate and distinct from its subsidiary. Holders
of Series A Subordinated Debentures should look only to the Corporation for
payments on the Series A Subordinated Debentures. There are regulatory
limitations on the payment of dividends directly or indirectly to the
Corporation from the Bank. See "-- General." In addition, the Bank is subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Corporation and certain other affiliates,
and on investments in stock or other securities thereof. Such restrictions
prevent the Corporation and such other affiliates from borrowing from the Bank
unless the loans are at least 100% secured by various types of collateral.
Further, such secured loans, other transactions and investments by the Bank are
generally limited in amount as to the Corporation and as to each of such other
affiliates to 10% of the Bank's capital and surplus and as to the Corporation
and all of such other affiliates to an aggregate of 20% of the Bank's capital
and surplus. Accordingly, the Series A
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Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries.
In addition, because the Corporation is a bank holding company, the right
of the Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise
(and thus the ability of holders of the Series A Capital Securities to benefit
indirectly from such distribution), is subject to the prior claims of creditors
of that subsidiary (including depositors, in the case of the Bank), except to
the extent the Corporation may itself be recognized as a creditor of that
subsidiary. At September 30, 1998, the Corporation's sole subsidiary, the Bank,
had total liabilities, including deposits, of $1.5 billion. Accordingly, the
Series A Subordinated Debentures will be effectively subordinated to all
existing and future liabilities of the Corporation's subsidiaries (including the
Bank's deposit liabilities) and all liabilities of any future subsidiaries of
the Corporation. The Indenture does not limit the incurrence or issuance of
other secured or unsecured debt of the Corporation or any subsidiary, including
Senior Indebtedness.
GOVERNING LAW
The Indenture and the Series A Subordinated Debentures will be governed by
and construed in accordance with the laws of the State of New York, without
regard to conflict of law principles.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Series A Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties under the Indenture if the Debenture Trustee
reasonably believes that repayment or adequate indemnity is not reasonably
assured to it.
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DESCRIPTION OF SERIES A GUARANTEE
The Series A Guarantee will be executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Series A Capital Securities
for the benefit of the holders from time to time of the Series A Capital
Securities. Wilmington Trust Company will act as Series A Guarantee Trustee
under the Series A Guarantee for the purposes of compliance with the Trust
Indenture Act. The Series A Guarantee will be qualified as an Indenture under
the Trust Indenture Act. This summary of certain provisions of the Series A
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 Series A Guarantee,
including the definitions contained therein of certain terms, and the Trust
Indenture Act, to each of which reference is hereby made. The form of the Series
A Guarantee has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. The Series A Guarantee Trustee will hold the
Series A Guarantee for the benefit of the holders of the Series A Capital
Securities.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Series A Capital Securities, as and when due, regardless
of any defense, right of set-off or counterclaim that the Trust may have or
assert other than the defense of payment. The following payments with respect to
the Series A Capital Securities, to the extent not paid by or on behalf of the
Trust (the "Guarantee Payments"), will be subject to the Series A Guarantee:
- any accumulated and unpaid Distributions required to be paid on the
Series A Capital Securities, to the extent that the Trust has funds on
hand legally available therefor at such time;
- the applicable Redemption Price with respect to the Series A Capital
Securities called for redemption, to the extent that the Trust has funds
on hand legally available therefor at such time; and
- upon a voluntary or involuntary dissolution, winding-up or liquidation of
the Trust (other than in connection with the distribution of the Series A
Subordinated Debentures to holders of the Series A Capital Securities or
the redemption of all Series A Capital Securities), the lesser of (a) the
Liquidation Distribution, to the extent the Trust has funds legally
available therefor at the time, and (b) the amount of assets of the Trust
remaining available for distribution to holders of Series A Capital
Securities after satisfaction of liabilities to creditors of the Trust as
required by applicable law.
The Series A Guarantee will rank subordinate and junior in right of payment to
all Senior Indebtedness to the extent provided therein. See "-- Status of the
Series A Guarantee." The Corporation's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Corporation to
the holders of the Series A Capital Securities or by causing the Trust to pay
such amounts to such holders.
The Series A Guarantee will be an irrevocable guarantee on a subordinated
basis of the Trust's obligations under the Series A Capital Securities, but will
apply only to the
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extent that the Trust has funds sufficient to make such payments. If the
Corporation does not make interest payments on the Series A Subordinated
Debentures held by the Trust, the Trust will not be able to pay the
Distributions on the Series A Capital Securities and will not have funds legally
available therefor. See "Relationship Among the Series A Capital Securities, the
Series A Subordinated Debentures and the Series A Guarantee." The Series A
Guarantee does not limit the incurrence or issuance of other secured or
unsecured debt of the Corporation, including Senior Indebtedness, whether under
the Indenture, any other indenture that the Corporation may enter into in the
future or otherwise.
The holders of not less than a majority in aggregate Liquidation Amount of
the Series A Capital Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Series A
Guarantee Trustee in respect of the Series A Guarantee or to direct the exercise
of any trust power conferred upon the Series A Guarantee Trustee under the
Series A Guarantee. Any holder of the Series A Capital Securities may institute
a legal proceeding directly against the Corporation to enforce its rights under
the Series A Guarantee without first instituting a legal proceeding against the
Trust, the Series A Guarantee Trustee or any other person or entity. If the
Corporation were to default on its obligation to pay amounts payable under the
Series A Subordinated Debentures, the Trust would lack funds for the payment of
Distributions or amounts payable on redemption of the Series A Capital
Securities or otherwise, and, in such event, holders of the Series A Capital
Securities would not be able to rely upon the Series A Guarantee for payment of
such amounts. Instead, if a Debenture Event of Default shall have occurred and
be continuing and such event is attributable to the failure of the Corporation
to pay interest on or principal of the Series A Subordinated Debentures on the
applicable payment date, then a holder of Series A Capital Securities may
institute a Direct Action against the Corporation pursuant to the terms of the
Indenture for enforcement of payment to such holder of the principal of or
interest on such Series A Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Amount of the Series A Capital Securities of
such holder. In connection with such Direct Action, the Corporation will have a
right of set-off under the Indenture to the extent of any payment made by the
Corporation to such holder of Series A Capital Securities in the Direct Action.
Except as described herein, holders of Series A Capital Securities will not be
able to exercise directly any other remedy available to the holders of the
Series A Subordinated Debentures or assert directly any other rights in respect
of the Series A Subordinated Debentures. The Trust Agreement provides that each
holder of Series A Securities by acceptance thereof agrees to the provisions of
the Series A Guarantee and the Indenture.
The Corporation will, through the Series A Guarantee, the Trust Agreement,
the Series A Subordinated Debentures and the Indenture, taken together, fully,
irrevocably and unconditionally guarantee all of the Trust's obligations under
the Series A Capital Securities. No single document standing alone, or operating
in conjunction with fewer than all of the other documents, constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Series A Capital Securities. See "Relationship
Among the Series A Capital Securities, the Series A Subordinated Debentures and
the Series A Guarantee."
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STATUS OF THE SERIES A GUARANTEE
The Series A Guarantee will constitute an unsecured obligation of the
Corporation and will rank subordinate and junior in right of payment to all
Senior Indebtedness in the same manner as the Series A Subordinated Debentures.
See "Description of Series A Subordinated Debentures -- Subordination." In
addition, because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise is subject to the
prior claims of creditors of such subsidiary (including depositors of the Bank),
except to the extent the Corporation may itself be recognized as a creditor of
such subsidiary. Accordingly, the Corporation's obligations under the Series A
Guarantee effectively will be subordinated to all existing and future
liabilities of the Corporation's present and future subsidiaries (including the
depositors of the Bank). As a result, claimants should look only to the assets
of the Corporation for payments under the Series A Guarantee. See "Description
of Series A Subordinated Debentures -- General."
The Series A Guarantee will rank pari passu with all other guarantees
issued by the Corporation with respect to preferred beneficial interests (if
any) issued by other trusts. The Series A Guarantee does not limit the amount of
secured or unsecured debt, including Senior Indebtedness, that may be incurred
by the Corporation or any of its subsidiaries. The Corporation expects from time
to time that it will incur additional indebtedness and that its subsidiaries
will also incur additional liabilities. The Series A Guarantee will constitute a
guarantee of payment and not of collection (i.e., the guaranteed party may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Series A Guarantee without first instituting a legal proceeding
against any other person or entity). The Series A Guarantee will be held for the
benefit of the holders of the Series A Capital Securities. The Series A
Guarantee will not be discharged, except by payment of the Guarantee Payments in
full to the extent not paid by the Trust or upon distribution to the holders of
the Series A Capital Securities of the Series A Subordinated Debentures.
EVENTS OF DEFAULT
An event of default under the Series A Guarantee will occur upon the
failure of the Corporation to perform any of its payment or other obligations
thereunder; provided, however, that except with respect to a default in payment
of any Guarantee Payment, the Corporation shall have received notice of default
and shall not have cured such default within 60 days after receipt of such
notice. The holders of not less than a majority in Liquidation Amount of the
Series A Capital Securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Series A
Guarantee Trustee in respect of the Series A Guarantee or to direct the exercise
of any trust or power conferred upon the Series A Guarantee Trustee under the
Series A Guarantee.
Any holder of the Series A Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the
Series A Guarantee without first instituting a legal proceeding against the
Trust, the Series A Guarantee Trustee or any other person or entity.
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The Corporation, as guarantor, will be required to file annually with the
Series A Guarantee Trustee a certificate as to whether or not the Corporation is
in compliance with all the conditions and covenants applicable to it under the
Series A Guarantee.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Series A Capital Securities (in which case no vote
will be required), the Series A Guarantee may not be amended without the prior
approval of the holders of a majority of the Liquidation Amount of such
outstanding Series A Capital Securities. The manner of obtaining any such
approval will be as set forth under "Description of Series A Capital
Securities -- Voting Rights; Amendment of the Trust Agreement." All guarantees
and agreements contained in the Series A Guarantee Agreement shall bind the
successors, assigns, receivers, trustees and representatives of the Corporation
and shall inure to the benefit of the holders of the Series A Capital Securities
then outstanding.
TERMINATION OF THE SERIES A GUARANTEE
The Series A Guarantee will terminate and be of no further force and effect
upon full payment of the applicable Redemption Price of all outstanding Series A
Capital Securities, upon full payment of the Liquidation Amount payable upon
liquidation of the Trust or upon distribution of Series A Subordinated
Debentures to the holders of the Series A Capital Securities. The Series A
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the Series A Capital Securities must restore
payment of any sums paid under the Series A Capital Securities or the Series A
Guarantee.
INFORMATION CONCERNING THE SERIES A GUARANTEE TRUSTEE
The Series A Guarantee Trustee, other than during the occurrence and
continuance of a default by the Corporation in performance of the Series A
Guarantee, will undertake to perform only such duties as are specifically set
forth in the Series A Guarantee and, in case a default with respect to the
Series A Guarantee has occurred, 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 Series A Guarantee Trustee will be under
no obligation to exercise any of the powers vested in it by the Series A
Guarantee at the request of any holder of the Series A Capital Securities unless
it is offered reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby.
GOVERNING LAW
The Series A Guarantee will be governed by and construed in accordance with
the laws of the State of New York, without regard to conflict of law principles.
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RELATIONSHIP AMONG THE SERIES A CAPITAL SECURITIES,
THE SERIES A SUBORDINATED DEBENTURES AND THE SERIES A GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Series A Capital
Securities (to the extent the Trust has funds on hand legally available for the
payment of such Distributions) will be irrevocably guaranteed by the Corporation
as and to the extent set forth under "Description of Series A Guarantee." Taken
together, the Corporation's obligations under the Series A Subordinated
Debentures, the Indenture, the Trust Agreement and the Series A Guarantee will
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of Distributions and other amounts due on the Series A Capital
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Series A Capital Securities. If and to the extent that the Corporation does not
make the required payments on the Series A Subordinated Debentures, the Trust
will not have sufficient funds to make the related payments, including
Distributions, on the Series A Capital Securities. The Series A Guarantee will
not cover any such payment when the Trust does not have sufficient funds on hand
legally available therefor. In such event, the remedy of a holder of Series A
Capital Securities is to institute a Direct Action. The obligations of the
Corporation under the Series A Guarantee will be subordinate and junior in right
of payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Series A Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Series A Capital Securities,
primarily because: (1) the aggregate principal amount or Prepayment Price of the
Series A Subordinated Debentures will be equal to the sum of the Liquidation
Amount or Redemption Price, as applicable, of the Trust Securities; (2) the
interest rate and interest and other payment dates on the Series A Subordinated
Debentures will match the Distribution Rate and Distribution and other payment
dates for the Trust Securities; (iii) the Corporation, as sponsor, shall pay for
all and any costs, expenses and liabilities of the Trust, except the Trust's
obligations to holders of Trust Securities under such Trust Securities; and (iv)
the Trust Agreement further provides that the Trust is not authorized to engage
in any activity that is not consistent with its limited purposes of the Trust.
ENFORCEMENT RIGHTS OF HOLDERS OF SERIES A CAPITAL SECURITIES
A holder of any Series A Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the Series A
Guarantee without first instituting a legal proceeding against the Series A
Guarantee Trustee, the Trust or any other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Trust Agreement. However, in
the event of payment
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defaults under, or acceleration of, Senior Indebtedness, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Series A Subordinated Debentures until such Senior Indebtedness has been
paid in full or any payment default thereunder has been cured or waived. Failure
to make required payments on Series A Subordinated Debentures would constitute
an Event of Default under the Trust Agreement.
LIMITED PURPOSE OF THE TRUST
The Series A Capital Securities will represent beneficial interests in the
Trust, and the Trust exists for the sole purpose of issuing and selling the
Trust Securities, using the proceeds from the sale of the Trust Securities to
acquire the Series A Subordinated Debentures and engaging in only those other
activities necessary, advisable or incidental thereto. A principal difference
between the rights of a holder of a Series A Capital Security and a holder of a
Series A Subordinated Debenture is that a holder of a Series A Subordinated
Debenture will be entitled to receive from the Corporation the principal amount
of and interest on Series A Subordinated Debentures held, while a holder of
Series A Capital Securities is entitled to receive Distributions from the Trust
(or, in certain circumstances, from the Corporation under the Series A
Guarantee) if and to the extent the Trust has funds on hand legally available
for the payment of such Distributions.
RIGHTS UPON DISSOLUTION
Unless the Series A Subordinated Debentures are distributed to holders of
the Trust Securities, upon any voluntary or involuntary dissolution, winding-up
or liquidation of the Trust, after satisfaction of the liabilities of creditors
of the Trust as required by applicable law, the holders of the Trust Securities
will be entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of Series A Capital
Securities -- Liquidation of the Trust and Distribution of Series A Subordinated
Debentures." Upon any voluntary or involuntary liquidation or bankruptcy of the
Corporation, the Property Trustee, as holder of the Series A Subordinated
Debentures, would be a subordinated creditor of the Corporation, subordinated in
right of payment to all Senior Indebtedness as set forth in the Indenture, but
entitled to receive payment in full of principal and interest, before any
stockholders of the Corporation receive payments or distributions. Since the
Corporation will be the guarantor under the Series A Guarantee and will agree to
pay all costs, expenses and liabilities of the Trust (other than the Trust's
obligations to the holders of its Trust Securities), the positions of a holder
of Series A Capital Securities and a holder of Series A Subordinated Debentures
relative to other creditors and to stockholders of the Corporation in the event
of liquidation or bankruptcy of the Corporation are expected to be substantially
the same.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In the opinion of Greenberg Traurig, P.A., special federal income tax
counsel to the Corporation and the Trust ("Special Tax Counsel"), the following
summary accurately describes the material U.S. federal income tax consequences
of the purchase, ownership and disposition of a Series A Capital Security.
This summary addresses only the tax consequences to a person that acquires
a Series A Capital Security on its original issuance at its original issue price
and that holds the security as a capital asset. The summary does not address all
tax consequences that may be applicable to a beneficial owner of a Series A
Capital Security and does not address the tax consequences to holders subject to
special tax regimes (like banks, thrifts, real estate investment trusts,
regulated investment companies, insurance companies, dealers in securities or
currencies, tax-exempt investors, persons that will hold a Series A Capital
Security as a position in a "straddle," as part of a "synthetic security" or
"hedge" or as part of a "conversion transaction" or other integrated
investment). This summary does not include any description of any alternative
minimum tax consequences or the tax laws of any state or local government or of
any foreign government that may apply to a Series A Capital Security. Except as
noted below in the discussion of Non-U.S. Holders, this discussion is addressed
to a U.S. Holder, which is defined as a beneficial owner of a Series A Capital
Security that, for U.S. federal income tax purposes, is (or is treated as) (1) a
citizen or individual resident of the United States, (2) a corporation or
partnership created or organized in or under the laws of the United States or
any political subdivision thereof, (3) an estate the income of which is
includible in gross income for U.S. federal income tax purposes without regard
to its source or (4) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. persons have the ability to control all substantial decisions of the
trust. This summary does not address the tax consequences to any shareholder,
partner or beneficiary of a holder of a Series A Capital Security. This summary
is based on the Code, Treasury regulations thereunder and the administrative and
judicial interpretations thereof, as of the date hereof, all of which are
subject to change, possibly on a retroactive basis. An opinion of Special Tax
Counsel is not binding on the IRS or the courts. No rulings have been or are
expected to be sought from the IRS with respect to any of the transactions
described herein. No assurance can be given that the opinions expressed herein
will not be challenged by the IRS or, if challenged, that the challenge will not
be successful.
CLASSIFICATION OF THE SERIES A SUBORDINATED DEBENTURES
The Corporation intends to take the position that the Series A Subordinated
Debentures will be classified for U.S. federal income tax purposes as
indebtedness of the Corporation. Special Tax Counsel will render its opinion
generally to the effect 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 relevant
documents), and based on certain assumptions and qualifications referenced in
the opinion, the Series A Subordinated Debentures will be characterized for U.S.
federal income tax purposes as indebtedness of the Corporation. The Corporation,
the Trust and the holders of the Series A Capital Securities (by acceptance of a
beneficial interest in a
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Series A Capital Security) will agree to treat the Series A Subordinated
Debentures as indebtedness of the Corporation for all U.S. federal income tax
purposes. No assurance can be given, however, that that position will not be
challenged by the IRS or, if challenged, that the challenge will not be
successful. The remainder of this discussion assumes that the Series A
Subordinated Debentures will be classified as indebtedness of the Corporation
for U.S. federal income tax purposes.
Prospective investors should be aware that the IRS has disallowed a
deduction for interest paid by Enron Corporation ("Enron") in 1993 and 1994 on
securities issued by Enron that are similar to the Series A Subordinated
Debentures. Enron has filed a petition in the U.S. Tax Court challenging the
disallowance of its deductions. The opinion of Special Tax Counsel regarding the
tax classification of the Series A Subordinated Debentures is based on the law
prior to any Tax Court decision in the Enron case. Although Enron's debt
obligations differ in certain respects from the Series A Subordinated
Debentures, the arguments of the IRS that interest on those obligations is not
deductible are not focused on those different terms and thus could apply to the
Series A Subordinated Debentures. Therefore, if the Tax Court decides in favor
of the IRS in Enron's case, although its decision might be distinguishable from
the Series A Subordinated Debentures, it is also possible that its decision
would result in the receipt by the Corporation or the Trust of a subsequent
opinion of counsel that there is more than an insubstantial risk that interest
payable on the Series A Subordinated Debentures is not or will not be
deductible. The receipt of such an opinion would constitute a Tax Event, which
would permit the Corporation to cause a redemption of the Series A Capital
Securities.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Series A Capital Securities, Special
Tax Counsel will render its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Trust Agreement
and the Indenture (and certain other documents), and based on certain facts and
assumptions contained in that opinion, the Trust will not be classified for U.S.
federal income tax purposes as an association taxable as a corporation.
Accordingly, for U.S. federal income tax purposes, the Trust will not be subject
to U.S. federal income tax, and each holder of a Series A Capital Security
generally will be required to include in its gross income any interest (or
accrued original issue discount ("OID")) with respect to its allocable share of
the Series A Subordinated Debentures.
ORIGINAL ISSUE DISCOUNT
Under the Indenture, the Corporation has the right to defer the payment of
interest on the Series A Subordinated Debentures at any time or from time to
time for one or more Extension Periods not exceeding 20 consecutive quarterly
periods each, provided that no Extension Period shall end on a date other than
an Interest Payment Date or extend beyond the Stated Maturity Date. By reason of
that right, Treasury regulations will subject the Series A Subordinated
Debentures to the rules in the Code and Treasury regulations on debt instruments
issued with OID (the "OID Rules"), unless the Indenture or Series A Subordinated
Debentures contain terms or conditions that make the likelihood of exercise of
the deferral option remote. Because the Corporation does not have a policy of
paying dividends on its common stock and instead reinvests its earnings in its
business, the
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covenant in the Indenture prohibiting the Corporation from paying dividends
during an Extension Period probably does not provide an effective deterrent to
the Corporation's exercise of the deferral option, and thus the OID Rules
probably apply. Special Tax Counsel to the Corporation is unable to conclude
that the Indenture or the Series A Subordinated Debentures contain terms or
conditions that make the likelihood of exercise of the deferral option remote,
and the Corporation intends to report payments on the Series A Subordinated
Debentures to the Internal Revenue Service on the basis that the OID Rules
apply.
If the OID Rules apply, a U.S. Holder will include income on the Series A
Subordinated Debentures in gross income on a daily economic accrual method of
accounting prescribed by the OID Rules, regardless of the U.S. Holder's regular
method of accounting for federal income tax purposes. A holder of a Series A
Subordinated Debenture thus would include in gross income amounts that had not
yet been received (including, in particular, during any Extension Period, when
the Corporation would not make actual cash payments). Under the OID Rules, a
U.S. Holder would accrue an amount of interest income in each taxable year that
approximates the amount of interest that accrues on the Series A Subordinated
Debentures at the stated interest rate, and actual cash payments of interest on
the Series A Subordinated Debentures would not be separately includible in gross
income. In addition, any holder who disposes of a Series A Capital Security
before the record date for the payment of a Distribution will include OID in
gross income but will not receive any cash related thereto from the Corporation.
The amount of any accrued but unpaid Distributions could be significant if the
disposition of the Series A Capital Security occurs during an Extension Period.
The amount of any OID included in a U.S. Holder's gross income will increase
that holder's tax basis in its Series A Capital Securities, and the amount of
distributions received by a U.S. Holder with respect to those Series A Capital
Securities will reduce the tax basis of those Series A Capital Securities.
Because the Series A Capital Securities will be treated as indebtedness,
corporate holders of the Series A Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to a Series A Capital Security.
RECEIPT OF SERIES A SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE
TRUST
The Corporation will have the right at any time to liquidate the Trust and
cause the Series A Subordinated Debentures to be distributed to the holders of
the Trust Securities. Under current law, such a distribution, for U.S. federal
income tax purposes, would be treated as a nontaxable event to each holder, and
the aggregate tax basis of each holder in its Series A Subordinated Debentures
received would be equal to its aggregate tax basis in its Series A Capital
Securities surrendered. A holder's holding period in the Series A Subordinated
Debentures received in liquidation of the Trust would be no shorter than the
period during which the Series A Capital Securities were held by that holder. A
holder would account for interest in respect of the Series A Subordinated
Debentures received from the Trust in the manner described above under
"-- Original Issue Discount," including any OID accrued on the Series A
Subordinated Debentures as of the date of any such distribution.
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Under certain circumstances described herein (see "Description of Series A
Capital Securities"), the Series A Subordinated Debentures may be prepaid in
cash, and the proceeds of that prepayment would be distributed to holders in
redemption of their Series A Capital Securities. Under current law, that
redemption would constitute, for U.S. federal income tax purposes, a taxable
disposition of the redeemed Series A Capital Securities, the tax consequences of
which are described below under "-- Sales or Redemptions of Series A Capital
Securities."
SALES OR REDEMPTIONS OF SERIES A CAPITAL SECURITIES
On a sale or redemption of a Series A Capital Security for cash, a holder
will recognize gain or loss equal to the difference between its adjusted tax
basis in the Series A Capital Security and the amount realized on the sale or
redemption of that Series A Capital Security. If the OID Rules apply, a holder's
adjusted basis in a Series A Capital Security generally will be its initial
purchase price increased by any OID previously included in the holder's gross
income to the date of disposition and decreased by any distributions received on
the Series A Capital Security. If the OID Rules do not apply, a holder's
adjusted basis in a Series A Capital Security generally will be its initial
purchase price, and if the holder uses an accrual method of accounting, the
holder will have a basis in any accrued but unpaid interest. Gain or loss
recognized on a sale or redemption of a Series A Capital Security will be
capital gain or loss. Capital gain recognized by an individual in respect of a
Series A Capital Security held for more than one year as of the date of sale or
redemption is subject to a maximum U.S. federal income tax rate of 20 percent.
The Series A Capital Securities may trade at a price that discounts any
accrued but unpaid interest on the Series A Subordinated Debentures. Therefore,
the amount realized by a holder who disposes of a Series A Capital Security
between Distribution payment dates and whose adjusted basis in the Series A
Capital Security has been increased by the amount of any accrued but unpaid OID
(or interest) may be less than the holder's adjusted basis in the Series A
Capital Security. A holder's basis in a Series A Capital Security could be
increased either under the OID Rules or, if the OID Rules do not apply, in the
case of a holder that uses an accrual method of accounting, under the accrual
accounting rules. In that case, the holder will recognize a capital loss.
Subject to a limited exception in the case of individual taxpayers, capital
losses cannot be applied to offset ordinary income for U.S. federal income tax
purposes.
NON-U.S. HOLDERS
For purposes of this discussion, a "Non-U.S. Holder" generally is any
individual, corporation, partnership, estate or trust that is not a U.S. Holder
for U.S. federal income tax purposes.
Under current U.S. federal income tax laws, subject to the discussion below
of backup withholding, (i) payments by the Trust or any of its paying agents to
a Non-U.S. Holder will not be subject to U.S. federal withholding tax, provided
that (a) the Non-U.S. Holder does not own, actually or constructively, ten
percent or more of the total combined voting power of all classes of stock of
the Corporation entitled to vote, (b) the Non-U.S. Holder is not a controlled
foreign corporation that is related to the Corporation through stock
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ownership, (c) the Non-U.S. Holder is not a bank whose receipt of interest on
the Series A Subordinated Debentures is described in Section 881(c)(3)(A) of the
Code, and (d) either (A) the Non-U.S. Holder certifies to the Trust or its
agent, under penalties of perjury, that it is not a U.S. Holder and provides its
name and address or (B) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course of
business (a "Financial Institution") and holds the Series A Capital Security in
that capacity certifies to the Trust or its agent, under penalties of perjury,
that that statement has been received from the Non-U.S. Holder by it or by a
Financial Institution between it and the Non-U.S. Holder and furnishes the Trust
or its agent with a copy thereof, and (ii) a Non-U.S. Holder will not be subject
to U.S. federal withholding tax on any gain realized upon a sale or other
disposition of a Series A Capital Security. New final Treasury regulations
provide alternative methods for satisfying the certification requirements
described in clause (i)(d) above, effective for certain payments made after
December 31, 1999.
If a Non-U.S. Holder is engaged in trade or business in the United States
and interest on the Series A Capital Securities (or the Series A Subordinated
Debentures) is effectively connected with the conduct of that trade or business,
the Non-U.S. Holder, although exempt from the withholding tax discussed above,
will be subject to U.S. federal income tax on that interest on a net income
basis in generally the same manner as if it were a U.S. Holder. In addition, if
such Non-U.S. Holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30% of its effectively connected earnings and profits for
the taxable year, subject to adjustments. For this purpose, the interest income
would be included in the foreign corporation's earnings and profits. In the case
of a Non-U.S. Holder entitled to the benefits of a tax treaty with the United
States, the foregoing discussion generally applies only if the Non-U.S. Holder
is engaged in business in the United States through a U.S. permanent
establishment and the income on the Series A Subordinated Debentures is
attributable to that permanent establishment within the meaning of the treaty,
and the rate of the branch profits tax may be limited to a rate prescribed by
the treaty for the withholding of tax on dividends. New final Treasury
regulations generally prescribe new methods for certifying that a Non-U.S.
Holder is exempt from the withholding of U.S. federal income tax by reason of
being engaged in trade or business in the United States.
Any gain recognized upon a sale or other disposition of Series A Capital
Securities (or Series A Subordinated Debentures) generally will not be subject
to U.S. federal income tax unless (i) the gain is effectively connected with a
U.S. trade or business of the Non-U.S. Holder or (ii) in the case of a Non-U.S.
Holder who is an individual, that individual is present in the United States for
183 days or more in the taxable year of the sale or other disposition, and
certain other conditions are met.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest, including OID, accrued on Series A Capital
Securities held of record by U.S. Holders (other than corporations and other
exempt holders) will be reported to the IRS. "Backup" withholding at a rate of
31% will apply to payments of interest to non-exempt U.S. Holders unless the
holder furnishes its taxpayer identification number in the manner prescribed in
applicable Treasury regulations, certifies that that
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number is correct, certifies as to no loss of exemption from backup withholding
and meets certain other conditions.
Payment of the proceeds from the disposition of Series A Capital Securities
to or through the U.S. office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner establishes an
exemption from information reporting and backup withholding.
Non-U.S. Holders are generally exempt from the information reporting and
backup withholding rules but may be required to comply with certain
certification and identification requirements to prove their exemption.
Any amount withheld from a holder under the backup withholding rules will
be allowed as a refund or a credit against such holder's U.S. federal income tax
liability, provided the required information is furnished to the IRS.
It is anticipated that income on Series A Capital Securities will be
reported to holders on Form 1099-OID and mailed to holders of Series A Capital
Securities by January 31 following each calendar year.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. YOU SHOULD CONSULT YOUR TAX ADVISER WITH RESPECT TO THE
TAX CONSEQUENCES TO YOU OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF A SERIES A
CAPITAL SECURITY, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. FEDERAL OR OTHER TAX
LAWS.
ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
(a "Plan") subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Series A 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 exemption 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
75
<PAGE> 77
the requirements of ERISA or Section 4975 of the Code; however, governmental
plans may be subject to similar provisions under applicable state laws.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the 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 the 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 Trust would not be deemed to be "plan assets" of investing Plans
if, at all times, less than 25% of the value of each class of equity interests
in the 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"), or if the Series A Capital Securities
were "publicly-offered securities" for purposes of the Plan Assets Regulation.
No assurance can be given that the Series A Capital Securities held by Benefit
Plan Investors will be less than 25% of the total value of such Series A Capital
Securities at the completion of this offering or thereafter, and no monitoring
or other measures will be taken with respect to the satisfaction of the
conditions to this exception. In addition, no assurance can be given that the
Series A Capital Securities would be considered to be "publicly-offered
securities" under the Plan Assets Regulation. All of the Series A Common
Securities will be purchased and initially held by the Corporation.
Certain transactions involving the 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 Series A Capital Securities were acquired
with "plan assets" of such Plan and the assets of the Trust were deemed to be
"plan assets" of Plans investing in the Trust. For example, if the Corporation
were a Party in Interest with respect to a Plan (either directly or by reason of
its ownership of the Bank or other subsidiaries), extensions of credit between
the Corporation and the Trust (as represented by the Series A Subordinated
Debentures and the Series A Guarantee) 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 administrative exemption (see below).
In addition, if the Corporation were considered to be a fiduciary with respect
to the Trust as a result of certain powers it holds (such as the powers to
remove and replace the Property Trustee and the Administrative Trustees), it is
possible that the optional redemption or acceleration of the Series A
Subordinated Debentures would be considered to be prohibited transactions under
Section 406(b) of ERISA and Section 4975(c)(1)(E) of the Code. In an attempt to
avoid such prohibited transactions, each investing plan, by purchasing Series A
Capital Securities, will be deemed to have directed the Trust to invest in the
Series A Subordinated Debentures and to have appointed the Property Trustee.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief if required for direct or indirect prohibited
transactions that may arise from the purchase or holding of the Series A Capital
Securities. Those class
76
<PAGE> 78
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 Series A Capital Securities may be deemed to be equity
interests in the Trust for purposes of applying ERISA and Section 4975 of the
Code, the Series A 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 purchaser or holder is exempt from any
prohibited transactions because of the relief provided under PTCE 96-23, 95-60,
91-38, 90-1 or 84-14 or another applicable exemption. Any purchaser or holder of
the Series A Capital Securities or any interest therein will be deemed to have
represented by its purchase and holding thereof that it either (a) 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) is exempt from any prohibited transactions
because of the relief provided under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption with respect to such purchase or holding. If a
purchaser or holder of the Series A 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 Corporation and the Trust may require a satisfactory opinion
of counsel or other evidence with respect to the availability of such exemption
for such purchase and holding.
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 purchasing the Series A
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 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 or any other applicable exemption.
77
<PAGE> 79
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated December , 1998 (the "Underwriting Agreement"), the Corporation and the
Trust have agreed that the Trust will sell to each of the Underwriters named
below, and each of such Underwriters has severally agreed to purchase from the
Trust, the respective number of Series A Capital Securities set forth opposite
its name below:
<TABLE>
<CAPTION>
NUMBER OF
SERIES A
CAPITAL SECURITIES
------------------
<S> <C>
CIBC Oppenheimer Corp. .....................................
Raymond James & Associates, Inc. ...........................
---------
Total............................................. 1,100,000
=========
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Series A Capital
Securities if any are taken.
The Underwriters propose initially to offer the Series A Capital Securities
in part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus and in part to certain securities dealers at
such price less a concession not in excess of $ per Series A Capital
Security. The Underwriters may allow, and such dealers may reallow, a concession
not to exceed $ per Series A Capital Security to certain brokers and
dealers. After the Series A Capital Securities are released for sale to the
public, the initial public offering price and other selling terms may from time
to time be varied by the Underwriters. No Underwriter will execute any
transaction in a discretionary account without prior approval of the customer.
In view of the fact that the proceeds from the sale of the Series A Capital
Securities will be used to purchase the Series A Subordinated Debentures issued
by the Corporation, the Underwriting Agreement provides that the Corporation
will pay as Underwriters' compensation for the Underwriters' arranging the
investment in such Series A Subordinated Debentures of such proceeds an amount
of $ per Series A Capital Security for the accounts of the several
Underwriters.
The Trust has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus, to purchase up to an additional 165,000
Series A Capital Securities at the public offering price set forth on the cover
page hereof less underwriting discounts. The Underwriters may exercise such
option to purchase additional Series A Capital Securities solely for the purpose
of covering over-allotments, if any, incurred in the sale of the Series A
Capital Securities.
To the extent that the Underwriters exercise their option to purchase
additional Series A Capital Securities, the Trust will issue and sell to the
Corporation additional Series A Common Securities and the Corporation will issue
and sell to the Trust additional Series A Subordinated Debentures in an
aggregate principal amount equal to the total liquidation amount of the
additional Series A Capital Securities being purchased pursuant to the option
and the additional Series A Common Securities.
The Corporation and the Trust have agreed that, for a period of 180 days
from the date of the Underwriting Agreement, they will not offer, sell, contract
to sell or otherwise
78
<PAGE> 80
dispose of, any other beneficial interests in the assets of the Trust, or any
preferred securities or any other securities of the Trust or the Corporation
which are substantially similar to the Series A Capital Securities, including
any guarantee of such securities, or any securities convertible into or
exchangeable for or representing the right to receive preferred securities or
any such substantially similar securities of either the Trust or the
Corporation, without the prior written consent of the Underwriters, except for
the Series A Capital Securities offered in connection with this offering.
Prior to the offering, there has been no public market for the Series A
Capital Securities. Although the Underwriters have indicated to the Corporation
and the Trust that they intend to make a market in the Series A Capital
Securities, they are not obligated to do so and may discontinue any such
market-making activities at any time without notice. No assurance can be given
as to the liquidity of the trading markets for the Series A Capital Securities.
The Corporation and the Trust have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act.
It is expected that delivery of the Series A Capital Securities will be
made in book-entry form only through the facilities of The Depository Trust
Company in New York, New York against payment therefor on or about December ,
1998, as agreed upon by the Corporation, the Trust and the Underwriters in
accordance with Rule 15c6-1 under the Exchange Act.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment services to the
Corporation and its affiliates, for which such Underwriters or their affiliates
have received or will receive customary fees and commissions.
In connection with this offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Series A Capital
Securities. Such transactions may include stabilization transactions effected in
accordance with Rule 104 of Regulation M under the Exchange Act, pursuant to
which such persons may bid for or purchase Series A Capital Securities for the
purpose of stabilizing the market price for Series A Capital Securities. The
Underwriters may also create a short position for the account of the
Underwriters by selling more Series A Capital Securities in connection with the
offering than they are committed to purchase from the Trust, and in such case
may purchase Series A Capital Securities in the open market following completion
of the offering to cover all or a portion of the Series A Capital Securities or
by exercising the Underwriters' over-allotment option referred to above. In
addition, CIBC Oppenheimer Corp., on behalf of the Underwriters may impose
"penalty bids" under contractual arrangements with the Underwriters whereby it
may reclaim from an Underwriter (or dealer participating in the offering) for
the account of the other Underwriters, the selling concession with respect to
Series A Capital Securities that are distributed in the offering but
subsequently purchased for the account of the Underwriters in the open market.
Any of the transactions described in this paragraph may result in the
maintenance of the price of the Series A Capital Securities at a level above
that which might otherwise prevail in the open market. None of the transactions
described in this paragraph is required, and, if undertaken, may be discontinued
at any time.
79
<PAGE> 81
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Series A
Capital Securities, the enforceability of the Trust Agreement and the formation
of the Trust will be passed upon by Richards, Layton & Finger, P.A., special
Delaware counsel to the Corporation and the Trust. The validity of the Series A
Guarantee and the Series A Subordinated Debentures will be passed upon for the
Corporation by Greenberg Traurig, P.A. and for the Underwriters by Thacher
Proffitt & Wood. Greenberg Traurig, P.A. and Thacher Proffitt & Wood will rely
on the opinion of Richards, Layton & Finger, P.A., as to matters of Delaware
law. Thacher Proffitt & Wood will rely on the opinion of Greenberg Traurig, P.A.
as to matters of Florida law. Greenberg Traurig, P.A. will rely on the opinion
of J. Reid Bingham, General Counsel to the Corporation, as to certain matters.
Certain matters relating to U.S. federal income tax considerations described in
this Prospectus will be passed upon for the Corporation by Greenberg Traurig,
P.A..
EXPERTS
The Consolidated Financial Statements incorporated in this Prospectus by
reference from the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
80
<PAGE> 82
INDEX OF SIGNIFICANT DEFINITIONS
Set forth below is a list of the significant defined terms used in this
Prospectus and the pages on which the definitions of such terms may be found
herein.
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Additional Sums............... 56
Administrative Trustees....... 6
Allocable Amounts............. 61
Bank.......................... 4
BHC Act....................... 24
Business Day.................. 35
Commission.................... 2
Corporation................... 2
Delaware Trustee.............. 6
Distribution Date............. 35
Distribution Period........... 35
Distributions................. 7,36
DTC........................... 9
ERISA......................... 75
Exchange Act.................. 2
Extension Period.............. 7
FDIA.......................... 15
FDIC.......................... 24
FRB........................... 15
Guarantee Payments............ 64
Indebtedness.................. 61
Indebtedness Ranking Junior to
the Series A Subordinated
Debentures.................. 62
Indebtedness Ranking on a
Parity with the Series A
Subordinated Debentures..... 61
Indirect Participants......... 45
Interest Payment Date......... 50
Interest Period............... 50
</TABLE>
<TABLE>
<CAPTION>
TERM PAGE
---- ----
<S> <C>
Investment Company Event...... 55
IRS........................... 17
Like Amount................... 38
Liquidation Distribution...... 39
Nasdaq National Market........ 9
Non-U.S. Holder............... 73
OCC........................... 24
OID........................... 71
OID Rules..................... 71
Participants.................. 45
Paying Agent.................. 48
Prepayment Price.............. 54
Property Trustee.............. 6
Redemption Date............... 38
Region........................ 4
Regulatory Capital Event...... 55
Senior Indebtedness........... 62
Series A Capital Securities... 5
Series A Common Securities.... 5
Series A Guarantee............ 8
Series A Subordinated
Debentures.................. 7
Special Event................. 54
Stated Maturity Date.......... 51
Successor Securities.......... 42
Tax Event..................... 55
Trust......................... 5
Trust Agreement............... 5
Trustees...................... 6
Trust Securities.............. 17
</TABLE>
81
<PAGE> 83
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION
OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON
ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS AN OFFER TO
SELL ONLY THE SECURITIES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES WHERE IT
IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CURRENT ONLY
AS OF ITS DATE. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION OR THE TRUST SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
-------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More
Information....................... 2
Incorporation of Certain Documents
by Reference...................... 2
Forward-Looking Statements.......... 3
Summary............................. 4
Selected Consolidated Financial
Data.............................. 11
Risk Factors........................ 14
Hamilton Bancorp Inc................ 26
Hamilton Capital Trust I............ 31
Use of Proceeds..................... 32
Capitalization...................... 33
Accounting Treatment................ 34
Description of Series A Capital
Securities........................ 35
Description of Series A Subordinated
Debentures........................ 50
Description of Series A Guarantee... 64
Relationship Among the Series A
Capital Securities, the Series A
Subordinated Debentures and the
Series A Guarantee................ 68
Certain Federal Income Tax
Consequences...................... 70
ERISA Considerations................ 75
Underwriting........................ 78
Validity of Securities.............. 80
Experts............................. 80
Index of Significant Definitions.... 81
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
HAMILTON CAPITAL TRUST I
$11,000,000
BLUS(SM)
% BENEFICIAL UNSECURED SECURITIES, SERIES A
(LIQUIDATION AMOUNT $10 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT
DESCRIBED HEREIN, BY
HAMILTON BANCORP INC.
PILLAR
-------------------------
PROSPECTUS
-------------------------
CIBC OPPENHEIMER
RAYMOND JAMES &
ASSOCIATES, INC.
DECEMBER , 1998
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 84
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Corporation will pay all of the expenses incurred in connection with
the offering described in this registration statement, other than underwriting
commissions and discounts. Such expenses are estimated to be as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 10,178
Legal fees and expenses..................................... 175,000
Accounting fees and expenses................................ 75,000
Blue Sky fees and expenses.................................. 5,000
Printing and engraving fees................................. 75,000
Fees and expenses of registrars, transfer agents, paying
agents and trustees....................................... 15,000
Listing fees................................................ 33,750
Miscellaneous............................................... 11,072
--------
Total............................................. $400,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation has authority under the Florida Business Corporation Act to
indemnify its directors and officers to the extent provided for in such statute.
The Corporation's Amended and Restated Articles of Incorporation require the
Corporation to indemnify the Corporation's directors, officers, employees and
agents. The Corporation has entered into an agreement with each of its directors
and certain of its officers providing for indemnification to the fullest extent
permitted by law. Insofar as indemnification for liabilities under the
Securities Act, may be permitted to directors, officers or persons controlling
the Corporation, pursuant to the foregoing provisions, or otherwise, the
Corporation has 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. The Corporation also maintains
directors' and officers' liability insurance.
II-1
<PAGE> 85
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <C> <S>
1.1 -- Form of Underwriting Agreement.
4.1 -- Certificate of Trust for Hamilton Capital Trust I.(1)
4.2 -- Declaration of Trust for Hamilton Capital Trust I.(1)
4.3 -- Form of Amended and Restated Declaration of Trust.
4.4 -- Form of Series A Series A Subordinated Debenture.
4.5 -- Form of Series A Capital Security.
4.6 -- Form of Series A Guarantee Agreement.
4.7 -- Form of Indenture.
5.1 -- Opinion of Greenberg Traurig, P.A. as to the legality of the
Series A Subordinated Debentures and the Series A Guarantee
to be issued by the Corporation.
5.2 -- Opinion of Richard, Layton & Finger, special Delaware
counsel, as to the legality of the Series A Capital
Securities.
8.1 -- Opinion of Greenberg Traurig, P.A. as to certain federal
income tax matters.
12.1 -- Computation of ratio of earnings to fixed charges.(1)
23.1 -- Consent of Deloitte & Touche, LLP.
23.2 -- Consent of Greenberg, Traurig, P.A. (included in Exhibit
5.1).
23.3 -- Consent of Richards, Layton & Finger (included in Exhibit
5.2).
25.1 -- Form T-1 Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Amended and Restated
Declaration of Trust of Hamilton Capital Trust I.(1)
25.2 -- Form T-1 Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Indenture.(1)
25.3 -- Form T-1 Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Series A Guarantee for
the benefit of the holders of Series A Capital Securities of
Hamilton Capital Trust I.(1)
27.1 -- Financial Data Schedule (for SEC use only).(1)
</TABLE>
- -------------------------
(1) Previously filed.
ITEM 17. UNDERTAKINGS.
(a) Each of the undersigned registrants hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of a Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 86
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
each registrant pursuant to the foregoing provisions, or otherwise, each
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by a
registrant of expenses incurred or paid by a director, officer, or controlling
person of a registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the respective registrant will,
unless in the opinion of 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 of 1933 and will be governed by the final adjudication of such
issue.
(c) The undersigned registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement,
certificates in such denominations and registered in such names as required by
the Underwriters to permit the prompt delivery to each purchaser.
(d) That for the purpose of determining any liability under the Securities
Act of 1933:
(i) the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(ii) each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE> 87
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Miami, State of Florida, on this 17th day of
December, 1998.
HAMILTON BANCORP INC.
By: /s/ EDUARDO A. MASFERRER
-----------------------------------
Eduardo A. Masferrer,
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ EDUARDO A. MASFERRER Chairman of the Board, December 17, 1998
- ----------------------------- President, and Chief
Eduardo A. Masferrer Executive Officer
(principal executive
officer)
/s/ JOHN M.R. JACOBS* Senior Vice President, December 17, 1998
- ----------------------------- Finance
John M.R. Jacobs (principal accounting
officer)
/s/ MAURA A. ACOSTA* Executive Vice President and December 17, 1998
- ----------------------------- Director
Maura A. Acosta
/s/ WILLIAM ALEXANDER* Director December 17, 1998
- -----------------------------
William Alexander
/s/ VIRGILIO E. SOSA, JR.* Director December 17, 1998
- -----------------------------
Virgilio E. Sosa, Jr.
Director December , 1998
- -----------------------------
William Bickford
Director December , 1998
- -----------------------------
Thomas F. Gaffney
*By: /s/ EDUARDO A. December 10, 1998
MASFERRER
- -----------------------------
Eduardo A. Masferrer
Attorney-in-fact
</TABLE>
II-4
<PAGE> 88
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
------ ----------- ----
<S> <C> <C>
1.1 Form of Underwriting Agreement
4.3 Form of Amended and Restated Declaration of Trust
4.4 Form of Series A Subordinated Debenture
4.5 Form of Series A Capital Security
4.6 Form of Series A Guarantee Agreement
4.7 Form of Indenture
5.1 Form of Opinion of Greenberg Traurig, P.A. as to the
legality of the Series A Subordinated Debentures and the
Series A Guarantee to be issued by the Corporation.
5.2 Form of Opinion of Richards, Layton & Finger, special
Delaware counsel, as to the legality of the Series A Capital
Securities.
8.1 Form of Opinion of Greenberg Traurig, P.A. as to certain
federal income tax matters.
23.1 Consent of Deloitte & Touche, LLP.
</TABLE>
<PAGE> 1
Exhibit 1.1
$30,000,000
Hamilton Capital Trust I
BLUS(SM)
[____]% Beneficial Unsecured Securities, Series A
(Liquidation Amount $25 per Capital Security)
UNDERWRITING AGREEMENT
December [__], 1998
CIBC Oppenheimer Corp.
Raymond James & Associates, Inc.
On behalf of the Several
Underwriters named in
Schedule I attached hereto.
c/o CIBC Oppenheimer Corp.
Oppenheimer Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Hamilton Capital Trust I (the "Trust"), a statutory business
trust created under the Business Trust Act (the "Delaware Act") of the State of
Delaware, and Hamilton Bancorp Inc., a corporation organized under the laws of
the State of Florida (the "Company"), propose to sell to you and the other
underwriters named in Schedule I to this Agreement (the "Underwriters"), for
whom you are acting as representatives (the "Representatives"), an aggregate of
[1,100,000] (the "Firm Securities") of the Trust's [____]% Beneficial Unsecured
Securities, Series A (liquidation amount $10 per security). In addition, the
Trust and the Company propose to grant to the Underwriters an option to purchase
up to an additional [165,000] (the "Option Securities") of the Trust's [____]%
Beneficial Unsecured Securities, Series A (liquidation amount $10 per security)
from the Trust for the purpose of covering over-allotments in connection with
the sale of the Firm Securities. The Firm Securities and the Option Securities
are together called the "Capital Securities."
The Capital Securities will be guaranteed by the Company with
respect to distributions and amounts payable upon liquidation or redemption of
such Capital Securities (the "Guarantee") to the extent set forth in the
Guarantee Agreement (the "Guarantee Agreement"), to be entered into between the
Company and Wilmington Trust Company, as trustee (the "Guarantee Trustee"), for
the benefit of holders, from time to time, of the Capital Securities. The
Company will be the owner of all of the beneficial ownership interests
represented by the common securities (the "Common Securities") of the Trust.
Proceeds from the sale of Capital Securities to the Underwriters and from the
concurrent sale of Common Securities to the Company will be used to purchase
[___]% Junior Subordinated Deferrable Interest Debentures, Series A due December
[__], 2028 (the "Debentures") of the Company. The Debentures will be issued by
the Company pursuant to an Indenture (the "Indenture"), to be entered into
between the Company and Wilmington Trust Company, as trustee
<PAGE> 2
(the "Debenture Trustee"). This Agreement, the Indenture, the Debentures, the
Declaration (as defined in Section 4(s)) and the Guarantee Agreement are
referred to collectively as the "Operative Documents."
1. SALE AND PURCHASE OF THE CAPITAL SECURITIES. On the basis
of the representations, warranties and agreements contained in, and subject to
the terms and conditions of, this Agreement:
(a) The Trust and the Company agree to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase the respective number of Firm Securities set forth
opposite the name of such Underwriter on Schedule I to this Agreement
at a purchase price of 100% of the liquidation amount thereof (the
"Initial Price").
(b) The Company and the Trust grant to the several
Underwriters an option to purchase, severally and not jointly, all or
any part of the Option Securities at the Initial Price. The number of
Option Securities to be purchased by each Underwriter shall be the same
percentage (adjusted by the Representatives to eliminate fractions) of
the total number of Option Securities to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Securities.
Such option may be exercised only to cover over-allotments in the sales
of the Firm Securities by the Underwriters and may be exercised in
whole or in part at any time and from time to time on or before 12:00
noon, New York City time, on the business day before the Firm
Securities Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each
case upon written or telegraphic notice, or oral or telephonic notice
confirmed by written or telegraphic notice, by the Representatives to
the Company no later than 12:00 noon, New York City time, on the
business day before the Firm Securities Closing Date or at least two
business days before each Option Securities Closing Date (as defined
below), as the case may be, setting forth the number of Option
Securities to be purchased and the time and date (if other than the
Firm Securities Closing Date) of such purchase.
2. DELIVERY AND PAYMENT. Delivery of the Firm Securities to
the Representatives for the respective accounts of the Underwriters, and payment
of the purchase price by wire transfer or certified or official bank check or
checks payable in immediately available (same day) funds to the Trust, shall
take place at the offices of Thacher Proffitt & Wood at Two World Trade Center,
New York, New York 10048, at 10:00 a.m., New York City time, on the third
business day following the date of this Agreement, or at such time on such other
date, not later than 10 business days after the date of this Agreement, as shall
be agreed upon by the Trust, the Company and the Representatives (such time and
date of delivery and payment are called the "Firm Securities Closing Date").
In the event the option with respect to the Option Securities
is exercised, delivery by the Company and the Trust of the Option Securities to
the Representatives for the respective accounts of the Underwriters and payment
of the purchase price by certified or official bank check or checks payable in
New York Clearing House (next day) funds to the Trust shall take place at the
offices of Thacher Proffitt & Wood specified above at the time and on the date
(which may be the
2
<PAGE> 3
same date as, but in no event shall be earlier than, the Firm Securities Closing
Date) specified in the notice referred to in Section 1(b) (such time and date of
delivery and payment are called an "Option Securities Closing Date"). The Firm
Securities Closing Date and each Option Securities Closing Date are called,
individually, a "Closing Date" and, together, the "Closing Dates."
Certificates evidencing the Capital Securities shall be
registered in such names and shall be in such denominations as the
Representatives shall request at least two full business days before the Firm
Securities Closing Date or, in the case of Option Securities, on the day of
notice of exercise of the option as described in Section 1(b), and shall be made
available to the Representatives for checking and packaging, at such place as is
designated by the Representatives, one full business day before the Firm
Securities Closing Date (or the Option Securities Closing Date in the case of
the Option Securities).
As compensation for the Underwriters' commitment and in view
of the fact that proceeds from the sale of the Capital Securities to the
Underwriters will be used to purchase the Debentures, the Company shall pay, on
each Closing Date, to the Underwriters a commission of $___ per Capital Security
purchased by the Underwriters on such Closing Date by wire transfer of
immediately available (same day) funds on such Closing Date to a bank account
designated by CIBC Oppenheimer Corp.
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The
Company and the Trust have prepared in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "'Commission") a registration statement on Form S-3
(No. 333-68453), including a preliminary prospectus relating to the Capital
Securities, and have filed with the Commission the Registration Statement (as
hereinafter defined) and such amendments thereof as may have been required to
the date of this Agreement. Such Registration Statement has been declared
effective by the Commission, and no further amendments thereto or supplements
thereof have been filed by the Company or the Trust with the Commission. Copies
of such Registration Statement (including all amendments thereof) and of the
related preliminary prospectus have heretofore been delivered by the Company and
the Trust to you. The term "Preliminary Prospectus" means any preliminary
prospectus (as described in Rule 430 of the Rules) included at any time as a
part of the Registration Statement. The Registration Statement as amended at the
time and on the date it became effective (the "'Effective Date"), including all
exhibits and information, if any, deemed to be part of the Registration
Statement pursuant to Rule 424(b) and Rule 430A of the Rules, is called the
"Registration Statement." The term "Prospectus" means the prospectus in the form
first used to confirm sales of the Capital Securities (whether such prospectus
was included in the Registration Statement at the time of effectiveness or was
subsequently filed with the Commission pursuant to Rule 424(b) of the Rules).
Reference made herein to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act as of the date of such Preliminary Prospectus or Prospectus, as
the case may be.
The Company and the Trust understand that the Underwriters
propose to make a public offering of the Capital Securities as set forth in and
pursuant to the Prospectus as soon after
3
<PAGE> 4
the date of this Agreement as the Representatives deem advisable. The Company
and the Trust hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each Preliminary Prospectus
and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company and the Trust furnish amendments or supplements
thereto to the Underwriters).
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE
COMPANY. The Trust and the Company, jointly and severally, hereby represent and
warrant to, and agree with, each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied, and on
the date of the Prospectus, on the date any post-effective amendment to
the Registration Statement shall become effective, on the date any
supplement or amendment to the Prospectus is filed with the Commission
and on each Closing Date, the Registration Statement and the Prospectus
(and any amendment thereof or supplement thereto) will comply, in all
material respects, with the applicable provisions of the Securities Act
and the Rules and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder. The Registration Statement did not, as of the Effective
Date, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and on the other dates
referred to above, neither the Registration Statement nor the
Prospectus, nor any amendment thereof or supplement thereto, will
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading. When any Preliminary
Prospectus was first filed with the Commission (whether filed as part
of the Registration Statement or any amendment thereto or pursuant to
Rule 424(a) of the Rules) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary
Prospectus as amended or supplemented complied in all material respects
with the applicable provisions of the Securities Act and the Rules and
did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. Notwithstanding
the foregoing, the Company and the Trust make no representation or
warranty as to the paragraph with respect to stabilization and the
statements contained in the third paragraph, and the second sentence in
the eighth paragraph under the caption "Underwriting" in the
Prospectus. The Company and the Trust acknowledge that the statements
referred to in the previous sentence constitute the only information
furnished in writing by the Representatives on behalf of the several
Underwriters specifically for inclusion in the Registration Statement,
any Preliminary Prospectus or the Prospectus.
(b) The documents incorporated by reference in the
Registration Statement and the Prospectus, when they were filed with
the Commission, conformed in all material respects to the requirements
of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein not
misleading.
4
<PAGE> 5
(c) The consolidated financial statements of the Company and
its subsidiary, Hamilton Bank, N.A., a national banking association
(the "Bank") (including all notes and schedules thereto) incorporated
by reference in the Registration Statement and Prospectus present
fairly the financial condition, the results of operations and cash
flows and stockholders' equity and the other information purported to
be shown therein of the Company and the Bank at the respective dates
and for the respective periods to which they apply; and such financial
statements have been prepared in conformity with generally accepted
accounting principles, consistently applied throughout the periods
involved, except as otherwise disclosed therein and all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of the results for such periods have been made.
(d) Deloitte & Touche LLP, whose reports are filed with the
Commission as a part of the Registration Statement, are and, during the
periods covered by their reports, were independent public accountants
as required by the Securities Act and the Rules.
(e) The Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHC Act");
the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Florida,
and the Bank has been duly organized and is validly existing as a
national banking association under the laws of the United States. The
Bank is the only subsidiary, direct or indirect, of the Company. The
Company does not control, directly or indirectly, any corporation
(other than the Bank), partnership, joint venture, association or other
business organization. The Company and the Bank are duly qualified to
do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification, except where the failure to so qualify will not have a
material adverse effect on the assets or properties, business, results
of operations, prospects or financial condition of the Company and the
Bank, taken as a whole, and have all corporate power necessary to own
or hold their respective properties, to operate their branches and to
conduct the businesses in which they are engaged. The deposit accounts
of the Bank are insured by the Bank Insurance Fund of the Federal
Deposit Insurance Corporation (the "FDIC") to the fullest extent
permitted by law and the rules and regulations of the FDIC, and no
proceedings for the termination of such insurance are pending or
threatened.
(f) Each of the Company and the Bank owns, possesses or has
obtained all governmental licenses, permits, certificates, consents,
orders, approvals and other authorizations (collectively, the
"Authorizations") and has made all requisite declarations,
registrations and filings (collectively, the "Filings") of, from and
with all governmental or regulatory bodies and any other person or
entity, required under the laws of the State of Florida, the United
States and any other jurisdiction in which the Company or the Bank
transact business in order to own or lease, as the case may be, and to
operate its properties and to conduct its business as presently
conducted and as described in the Prospectus,
5
<PAGE> 6
except where the failure to own, possess, obtain or make such
Authorization or Filing would not have a material adverse effect upon
the assets or properties, business, results of operations, prospects or
financial condition of the Company and the Bank, taken as a whole; all
of such Authorizations are in full force and effect, and neither the
Company nor the Bank has received any notice of proceedings relating
to any revocation or modification thereof.
(g) Each of the Company and the Bank is in compliance in all
material respects with all applicable laws administered by and
regulations of the Board of Governors of the Federal Reserve System,
the Office of the Comptroller of the Currency, the FDIC and any state
bank regulatory authority with jurisdiction over the Company or the
Bank, as the case may be (each, a "Bank Regulatory Authority"), the
failure to comply with which would have a material adverse effect upon
the assets or properties, business, results of operations, prospects or
financial condition of the Company and the Bank, taken as a whole.
Neither the Company nor the Bank is a party to any written agreement or
memorandum of understanding with, or a party to any commitment letter
or similar undertaking to, or is subject to any order or directive by,
or is a recipient of any extraordinary supervisory letter from, or has
adopted any board resolutions at the request of, any Bank Regulatory
Authority which restricts materially the conduct of its business, or in
any manner relates to its capital adequacy, its credit policies or its
management, nor have any of them been advised by any Bank Regulatory
Authority that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such
order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission, or any
such board resolutions.
(h) Except as disclosed in the Registration Statement and
Prospectus, the Company and the Bank each owns or possesses adequate
and enforceable rights, either as owner or licensee, to use all
trademarks, trademark applications, trade names, service marks,
copyrights, copyright applications, licenses, know-how and other
similar rights and proprietary knowledge (collectively, "Intangibles")
necessary for the conduct of its business as described in the
Registration Statement and the Prospectus. The Company has not received
any notice of, or to its best knowledge is not aware of, any
infringement of or conflict with asserted rights of others with respect
to any Intangibles, which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a material
adverse effect upon the assets or properties, business, results of
operations, prospects or financial condition of the Company and the
Bank, taken as a whole.
(i) The Company and the Bank each have good and marketable
title in fee simple to all real property and good title to all personal
property owned by it, in each case free and clear of all liens,
encumbrances and defects except such as do not materially affect the
value of such or do not materially interfere with the use made of such
property by the Company or the Bank; and all real property and
buildings held under lease by the Company or the Bank are held by them
under valid, subsisting and enforceable leases, with such exceptions as
are not material and do not interfere with the use made of such
property and buildings by the Company or the Bank.
6
<PAGE> 7
(j) There is no action, suit, investigation or proceeding,
governmental or otherwise, pending or, to the Company's best knowledge,
threatened or contemplated (and the Company does not know of any basis
therefor) to which the Company or the Bank is or may be a party or of
which the business or property of the Company or the Bank is or may be
subject in either case that is material to the Company and the Bank,
taken as a whole, or which is required to be disclosed in the
Prospectus and is not so disclosed.
(k) Except as disclosed in or contemplated by the Registration
Statement and the Prospectus, subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any material adverse change in the
assets or properties, business, management, results of operations,
prospects or financial condition of the Company and the Bank whether or
not arising from transactions in the ordinary course of business, and
neither the Company nor the Bank has sustained any material loss or
interference with its assets, businesses or properties from fire,
explosion, earthquake, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree.
(l) Neither the Company nor the Bank is in violation of any
term or provision of (i) its charter or by-laws or other governing
documents or (ii) any franchise, license, permit, judgment, decree,
order, statute, rule, regulation, directive, policy or guideline to
which it or its property may be subject, except, in the case of clause
(ii), for such violations which would not, individually or in the
aggregate, have a material adverse effect on the assets or properties,
business, results of operations, prospects or financial condition of
Company and the Bank, taken as a whole.
(m) No default exists, and no event has occurred which with
notice or lapse of time or both would constitute a default, in the due
performance and observance of any term, covenant or condition by the
Company or the Bank of any agreement, indenture, mortgage, deed of
trust, note or any other agreement or material instrument to which the
Company or the Bank is a party or by which any of them or their
respective properties or businesses may be bound, except for such
defaults or events which would not have a material adverse effect on
the assets or properties, business, results of operations, prospects or
financial condition of the Company and the Bank, taken as a whole.
(n) Neither the execution, delivery and performance of the
Operative Documents by the Company and the Trust nor the consummation
of any of the transactions contemplated hereby or thereby will (i)
conflict with or result in the breach or violation of any term or
provision of, or give rise to a right to terminate or accelerate the
due date of any payment due under, or constitute a default (or an event
which with notice or lapse of time or both would constitute a default)
under, or require any consent or waiver under, or result in the
creation or imposition of any of any lien, charge, claim, encumbrance
or security interest on any properties or assets of the Company or of
the Bank pursuant to the terms of, any material agreement, indenture,
mortgage or other material agreement or material instrument to which
the Company or the Bank is a party or by which the Company or the Bank
is bound or to which any of the property or assets of the Company or
the Bank is subject, nor (ii) violate
7
<PAGE> 8
the charter or by-laws or other governing document of the Company or
the Bank or any applicable law, rule, regulation, decision, order or
decree of any court or governmental agency or governmental authority
having jurisdiction over the Company or the Bank or any of their
properties, except, in the case of clause (i), for such violations
which would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or financial
condition of the Company and the Bank, taken as a whole.
(o) No consent, approval, authorization or order of, or
filing, registration, or qualification with, any governmental agency or
authority is required in connection with the execution, delivery and
performance by the Company and the Trust of the Operative Documents or
the consummation of the transactions contemplated hereby and taken
thereby, except (A) as may be required under the Securities Act and the
Rules, the Exchange Act, or the Blue Sky laws of the various states of
the United States in connection with any sales of Capital Securities
therein or (B) as have already been obtained or made.
(p) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as
permitted by the Rules.
(q) The Company's capitalization is as set forth in the
Prospectus; all of the issued shares of capital stock of the Bank have
been duly and validly authorized and issued and are fully paid and
non-assessable, and 99.8% of such shares are owned by the Company,
directly or indirectly, free and clear of all liens, encumbrances,
equities or claims of any third parties; and no holder of any security
of the Company has the right to have any security owned by such holder
included in the Registration Statement.
(r) Since the date of the latest balance sheet incorporated by
reference in the Registration Statement and the Prospectus, except as
reflected therein, neither the Company nor the Bank has (i) issued or
granted any securities (other than shares of the Company's common stock
issued under the Company's Stock Option Plan, pursuant to the exercise
of outstanding stock options or to employees or directors under bonus
or other compensation plans or arrangements) or incurred any material
liability or obligation, whether fixed or contingent, except for
liabilities or obligations incurred in the ordinary course of its
banking business, (ii) entered into any transaction not in the ordinary
course of its banking business, or (iii) declared or paid any dividend
or made any distribution on any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase
or otherwise acquire any shares of its capital stock.
(s) Neither the Company nor the Bank is involved in any labor
dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a material adverse effect on the
assets or properties, business, results of operations, prospects or
financial condition of the Company and the Bank, taken as a whole.
8
<PAGE> 9
(t) No transaction has occurred between or among the Company
or any of its affiliates, officers or directors or any affiliate or
affiliates cf any such officer or director that is required to be
described in and is not described In the Registration Statement and the
Prospectus.
(u) The Company and the Bank have filed all Federal, state,
local and foreign tax returns which are required to be filed by them,
either on an individual or consolidated basis, through the date hereof,
or has received extensions thereof; all taxes shown on such returns and
all assessments received by them have been paid, to the extent that the
same have become due, except where the failure to so file or pay would
not have a material adverse effect on the assets or properties,
business, results of operations, prospects or financial condition of
the Company and the Bank, taken as a whole.
(v) The Capital Securities have been duly authorized for
quotation on the National Association of Securities Dealers Automated
Quotation ("NASDAQ") National Market System, subject to official notice
of issuance, and a registration statement has been filed on Form 8-A
pursuant to Section 12 of the Exchange Act for the Capital Securities,
which registration statement complies in all material respects with the
Exchange Act.
(w) The Company will comply with all of the requirements and
file the required forms as specified in Florida Statutes Section
517.075 if qualification of the Capital Securities becomes necessary.
(x) The Capital Securities and the Common Securities have been
duly and validly authorized and, when issued and delivered against
payment therefor as provided herein, will be duly and validly issued,
fully paid and non-assessable; and the Capital Securities and the
Common Securities, when issued and delivered, will conform in all
material respects to the descriptions thereof contained in the
Prospectus.
(y) The Indenture has been duly authorized, and when duly
executed by the proper officers of the Company (assuming due execution
and delivery by the Indenture Trustee) and delivered by the Company
will constitute a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium 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); and the
Debentures have been duly authorized and, when duly executed,
authenticated, issued and delivered as contemplated in the Indenture,
will constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture and enforceable in accordance with
their terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium 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); and the Debentures, when issued and delivered, will conform in
all material respects to the description thereof contained in the
Prospectus.
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<PAGE> 10
(z) The Trust has been duly created and is validly existing as
a statutory business trust in good standing under the Delaware Act with
the trust power and authority to own property and conduct its business
as described in the Prospectus, and has conducted and will conduct no
business other than the transactions contemplated by this Agreement as
described in the Prospectus; the Trust is not a party to or bound by
any agreement or instrument other than this Agreement, the Amended and
Restated Declaration of Trust (the "Declaration") among the Company,
Wilmington Trust Company, as property trustee (the "Property Trustee"),
Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee"),
and the individuals named therein as the Administrative Trustees (the
"Administrative Trustees," and, together with the Property Trustee and
the Delaware Trustee, the "Trustees"), and the agreements and
instruments contemplated by the Declaration and described in the
Prospectus; the Trust has no liabilities or obligations other than
those arising out of the transactions contemplated by this Agreement
and the agreements and instruments contemplated by the Declaration and
described in the Prospectus; and the Trust is not a party to or subject
to any action, suit or proceeding of any nature.
(aa) The Declaration has been duly authorized by the Company
and, when duly executed and delivered by the Company and the Trustees,
will be a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting the rights of creditors generally and general equitable
principles (whether considered in a proceeding in equity or at law),
and will conform in all material respects to the description thereof
contained in the Prospectus. Each of the Administrative Trustees is an
employee of the Company and has been duly authorized by the Company to
serve in such capacity and to execute and deliver the Declaration.
(bb) The Guarantee Agreement has been duly authorized and,
when duly executed and delivered by the proper officers of the Company
and the Guarantee Trustee, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance
with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium 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); and the Guarantee Agreement, when executed and delivered, will
conform in all material respects to the description thereof contained
in the Prospectus.
(cc) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Trust and constitutes a valid
and legally binding agreement of the Company and the Trust enforceable
against the Company and the Trust in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium 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).
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<PAGE> 11
(dd) Neither the Trust nor the Company nor the Bank is
required to register as an "investment company" within the meaning of
such term under the Investment Company Act of 1940 (the "Investment
Company Act") and the rules and regulations of the Commission
thereunder as a result of the consummation of the transactions
contemplated by the Operative Documents.
(ee) The conditions for use of Form S-3 by the Company and the
Trust, as set forth in the General Instructions thereto, have been
satisfied.
5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters under this Agreement are several and not joint.
The respective obligations of the Underwriters to purchase the Capital
Securities on each Closing Date are subject to each of the following terms and
conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a)(i) of this Agreement.
(b) No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus shall have been or shall be in
effect and no order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the Commission, and any requests for
additional information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Representatives.
(c) No Underwriter shall have been advised by the Company or
shall have discovered and disclosed to the Company that the
Registration Statement or the Prospectus or any amendment or supplement
thereby, contains an untrue statement of fact which, in the opinion of
counsel to the Underwriters, is material, or omits to state a fact
which, in the opinion of counsel to the Underwriters, is material and
is required to be stated therein or is necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
(d) The representations and warranties of the Trust and the
Company contained in this Agreement and in the certificates delivered
pursuant to Section 5(e) shall be true and correct when made and on and
as of each Closing Date as if made on such date and each of the Trust
and the Company shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by it at or before such Closing Date.
(e) The Representatives shall have received on each Closing
Date a certificate, addressed to the Representatives and dated such
Closing Date, of the chief executive or chief operating officer and the
chief financial officer of the Company, to the effect that the signers
of such certificate have reviewed the Registration Statement, the
Prospectus and this Agreement and that (i) to the best of their
knowledge after due inquiry, the representations and warranties of the
Company contained in this Agreement are true and
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<PAGE> 12
correct as if made on and as of such Closing Date with the same effect
as if made on such Closing Date, and the Company has performed all
covenants and agreements and satisfied all conditions contained in this
Agreement required to be performed or satisfied by it at or prior to
such Closing Date and (ii) they have reviewed the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and the Prospectus did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (B) since the Effective
Date no event has occurred which should have been set forth in a
supplement to the Prospectus or an amendment to the Registration
Statement.
(f) The Representatives shall have received at the time this
Agreement is executed and on each Closing Date a signed letter from
Deloitte & Touche LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and such Closing Date, in form
and substance reasonably satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of
the Securities Act and the Rules and are in compliance with the
applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission and stating in
effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included
or incorporated by reference in the Registration
Statement and the Prospectus and reported on by them
comply as to form in all material respects with the
applicable accounting requirements of the Securities
Act and the Rules;
(ii) On the basis of a reading of the
financial statements and amounts included or
incorporated by reference in the Registration
Statement and the Prospectus, carrying out certain
procedures (but not an examination in accordance with
generally accepted auditing standards) which would
not necessarily reveal matters of significance with
respect to comments set forth in such letter, a
reading of the minutes of the meetings of the
shareholders and board of directors of the Company
and the Bank and inquiries of certain officials of
the Company who have responsibility for financial and
accounting matters of the Company and the Bank,
nothing came to their attention which caused them to
believe that there were any changes, increases or
decreases, as of the date of the letter, in
consolidated net interest income, net income,
long-term debt or capital stock compared to the same
period in the prior year or as of December 31, 1997,
as the case may be, except in all instances for
changes, increases or decreases set forth or
contemplated in the Registration Statement or as
otherwise set forth in this letter; and
(iii) they have performed certain other
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature set forth in the Registration
Statement and the Prospectus
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<PAGE> 13
agrees with the financial statements or accounting or
other records of the Company and is arithmetically
correct.
References to the Registration Statement and the Prospectus in this paragraph
(f) are to such documents as amended and supplemented at the date of such
letters.
(g) The Representatives shall have received on each Closing
Date from Greenberg, Traurig, P.A., counsel to the Company and the
Trust, an opinion or opinions, addressed to the Representatives and
dated such Closing Date, and stating in effect that:
(i) The Company is duly registered as a bank
holding company under the BHC Act and has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the State of
Florida. The Bank has been duly organized and is
validly existing as a national banking association
under the laws of the United States. The Company and
the Bank are duly qualified and in good standing as
foreign corporations in each jurisdiction in which
their respective ownership or lease of property or
the conduct of their respective businesses requires
such qualification, except where the failure to so
qualify would not have a material adverse effect on
the assets or properties, business, results of
operations or financial condition of the Company and
the Bank, taken as a whole, and have all corporate
power necessary to own or hold their respective
properties, to operate their branches and conduct the
business in which they are engaged as described in
the Prospectus. The deposit accounts of the Bank are
insured by the Bank Insurance Fund of the FDIC to the
fullest extent permitted by law and the rules and
regulations of the FDIC, and no proceedings for the
termination of such insurance are pending or
threatened.
(ii) The Company's capitalization is as set
forth in the Prospectus; and all of the issued shares
of capital stock of the Bank have been duly and
validly authorized and issued and are fully paid and
non-assessable; and no holder of any security of the
Company has the right, under the Company's
certificate of incorporation or by-laws or any
agreement or instrument known to such counsel, to
have any security owned by such holder included in
the Registration Statement.
(iii) The Registration Statement was
declared effective under the Securities Act at the
time and on the date specified in such counsel's
opinion, and to the best knowledge of such counsel,
no stop order or other order suspending the
effectiveness of the Registration Statement has been
issued and no proceedings for that purpose are
pending before the Commission under the Securities
Act.
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<PAGE> 14
(iv) The Registration Statement and the
Prospectus and any further amendments or supplements
thereto made by the Company prior to such Closing
Date (other than the financial statements and related
notes and schedules therein, as to which such counsel
need express no opinion) comply as to form in all
material respects with the requirements of the
Securities Act and the Rules; and the documents
incorporated by reference in the Prospectus (other
than the financial statements and related schedules
therein, as to which such counsel need express no
opinion), when they were filed with the Commission,
complied as to form in all material respects with the
requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
(v) All the conditions necessary for the use
of Form S-3 in connection with the issuance and sale
of the Capital Securities, the Guarantee and the
Debentures have been satisfied by the Company and the
Trust.
(vi) No consent, approval, authorization or
order of or filing, registration, or qualification
with any governmental agency or authority is required
in connection with the execution and delivery by the
Company and the Trust of the Operative Documents and
the consummation of the transactions contemplated
hereby except (A) as may be required under the
Exchange Act or the Blue Sky laws of the various
states of the United States in connection with any
sales of Capital Securities therein or (B) as have
already been obtained or made.
(vii) This Agreement has been duly
authorized, executed and delivered by the Company and
the Trust and constitutes a valid and binding
agreement of the Company and the Trust enforceable
against the Company and the Trust in accordance with
its terms, except as enforceability thereof may be
limited by (A) the application of bankruptcy,
reorganization, insolvency and other laws affecting
creditors' rights generally, and (B) equitable
principles being applied at the discretion of a court
before which any proceeding may be brought.
(viii) The Declaration has been duly
authorized, executed and delivered by the Company.
(ix) The Indenture has been duly authorized,
executed and delivered by the Company and (assuming
due authorization, execution and delivery thereof by
the Indenture Trustee) constitutes a valid and
binding agreement of the Company enforceable against
the Company in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors'
rights generally and general equitable principles
(whether
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<PAGE> 15
considered in a proceeding in equity or at law); and
the Debentures have been duly authorized, executed,
issued and delivered by the Company as contemplated
in the Indenture and (assuming due authentication by
the Indenture Trustee) constitute valid and binding
obligations of the Company entitled to the benefits
of the Indenture and enforceable in accordance with
their term, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium 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).
(x) The Guarantee Agreement has been duly
authorized, executed and delivered by the Company
and, assuming due authorization, execution and
delivery by the Guarantee Trustee, constitutes a
valid and legally binding obligation of the Company
enforceable against the Company in accordance with
its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium 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).
(xi) The statements contained in the
Prospectus under the caption "Certain United States
Federal Income Tax Consequences" are accurate in all
material respects and constitute a fair summary of
the matters set forth therein.
(xii) To the best knowledge of such counsel,
the businesses of the Company and the Bank have been
conducted in all material respects in compliance with
all applicable laws, rules and regulations of the
State of Florida and the United States, which laws
are material to the operations of the Company and the
Bank taken as a whole.
(xiii) The statements in the Prospectus
under the captions "Description of Series A Capital
Securities," "Description of Series A Subordinated
Debentures," "Description of Series A Guarantee" and
"Relationship Among the Series A Capital Securities,
the Series A Subordinated Debentures and the Series A
Guarantee," insofar as such statements constitute a
summary of documents referred to therein or matters
of law, are fair summaries in all material respects
and accurately present the information called for
with respect to such documents and matters.
(xiv) Except as set forth (or referred to)
in the Prospectus, or incorporated by reference
therein, to our knowledge, there are no contractual
encumbrances or restrictions, or material legal
restrictions on the ability of the Bank (i) to pay
dividends or make any other distributions on its
capital stock or to pay indebtedness owed to the
Company, (ii) to make any loans or
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<PAGE> 16
advances to, or investments in, the Company, or (iii)
to transfer any of its properties or assets to the
Company.
(xv) Neither the Trust nor the Company nor
the Bank is required to register as an investment
company under the Investment Company Act as a result
of the transactions contemplated by the Operative
Documents.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company, the Bank
and public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the State of Florida and the Federal laws of the United States; PROVIDED that
such counsel shall state that in their opinion the Underwriters and they are
justified in relying on such other opinions. Copies of such certificates and
other opinions shall be furnished to the Representatives and counsel for the
Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives, including Underwriters'
counsel, and representatives of the independent certified public accountants of
the Company, at which conferences the contents of the Registration Statement and
the Prospectus and related matters were discussed and, although such counsel is
not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus (relying as to materiality to a large extent upon
the opinions and representations of officers and other representatives of the
Company), on the basis of the foregoing, no facts have come to the attention of
such counsel which lead such counsel to believe that the Registration Statement
at the time the Registration Statement became effective (except with respect to
the financial statements and notes thereto and other financial and statistical
data contained therein, as to which such counsel need express no opinion or
belief) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as amended or supplemented
(except with respect to the financial statements and notes thereto and other
financial and statistical data contained therein, as to which such counsel need
make no statement or express any opinion or belief) on the date thereof and on
such Closing Date contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(h) The Representatives shall have received on each Closing
Date from J. Reid Bingham, Esq., general counsel of the Company, an
opinion, addressed to the Representatives and dated such Closing Date,
and stating in effect that:
(i) To the best knowledge of such counsel,
neither the Company nor the Bank is in violation of
or conflict with any term or provision of its charter
or by-laws or other governing documents and neither
the Company nor the Bank is in violation of any
franchise, license, permit, judgment, decree, order,
statute, rule, regulation, directive, policy or
guideline to which it or its property may be subject,
except for such violations which could not
individually or in the aggregate, have a material
adverse effect on the Company and the Bank, taken as
a whole.
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<PAGE> 17
(ii) To the best knowledge of such counsel,
no default exists, and no event has occurred which
with notice or lapse of time or both would constitute
a default, in the due performance and observance of
any term, covenant or condition by the Company or the
Bank of any material agreement, indenture, mortgage,
deed of trust, note or any other material agreement
or material instrument to which the Company or the
Bank is a party or by which it or its properties or
businesses may be bound.
(iii) The execution, delivery and
performance of the Operative Documents by the Company
and the Trust and the consummation of the
transactions contemplated hereby and thereby will not
conflict with or result in the breach or violation of
any term or provision of, or constitute a default (or
an event which with notice or lapse of time or both
would constitute a default) under, or require any
consent or waiver under, or result in the creation or
imposition of any lien, charge, claim, encumbrance or
security interest on any properties or assets of the
Company or the Bank pursuant to the terms of, any
material agreement, indenture, mortgage or other
material agreement or material instrument known to
such counsel to which the Company or the Bank is a
party or by which the Company or the Bank is bound or
to which any of the property or assets of the Company
or the Bank is subject, nor will such actions violate
the charter or bylaws or other governing document of
the Company or the Bank or any applicable law, rule
or administrative regulation of any court or
governmental agency or governmental authority having
jurisdiction over the Company or the Bank or any of
their properties, except for such violations which
could not have, individually or in the aggregate, a
material adverse effect on the Company.
(iv) To the best of such counsel's
knowledge, there are no contracts or other documents
which are required to be described in the Prospectus
or filed as exhibits to the Registration Statement by
the Securities Act or by the Rules which have not
been so described or filed as required.
(v) To the best knowledge of such counsel,
there is no action, suit, investigation or
proceeding, governmental or otherwise, pending,
threatened or contemplated to which the Company or
the Bank is or may be a party or of which the
business or property of the Company or the Bank is or
may be subject in either case that is required to be
disclosed in the Prospectus.
(vi) To the best knowledge of such counsel,
99.8% of the shares of capital stock of the Bank
are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities
or claims.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and
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<PAGE> 18
the Prospectus (except as specified in the foregoing opinion), on the basis of
the foregoing, no facts have come to the attention of such counsel which lead
such counsel to believe that the Registration Statement at the time it became
effective (except with respect to the financial statements and notes and
schedules thereto and other financial data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements and notes and
schedules thereto and other financial data, as to which such counsel need make
no statement), as of its issue date and at the date of such opinion, contained
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(i) On each Closing Date there shall have been furnished to
the Representatives the opinion (addressed to the Underwriters) of
Richards, Layton & Finger, P.A., as special Delaware counsel to the
Trust and the Company, dated such Closing Date, and in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Trust has been duly created and is
validly existing in good standing as a business trust
under the Delaware Act, and all filings required
under the laws of the State of Delaware with respect
to the creation and valid existence of the Trust as a
business trust have been made;
(ii) Under the Delaware Act and the
Declaration, the Trust has the trust power and
authority to own its property and conduct its
business as set forth in the Declaration;
(iii) The Declaration constitutes a valid
and binding obligation of the Company and the
Trustees, and is enforceable against the Company and
the Trustees in accordance with its terms, subject,
as to enforcement, to the effect upon the Declaration
of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent
transfer and other similar laws relating to the
rights and remedies of creditors generally, (ii)
principles of equity, including applicable law
relating to fiduciary duties (regardless of whether
considered and applied in a proceeding in equity or
at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating
to indemnification or contribution;
(iv) Under the Delaware Act and the
Declaration, the Trust has the trust power and
authority (i) to execute and deliver, and to perform
its obligations under, the Underwriting Agreement,
(ii) to issue and perform its obligations under the
Capital Securities and the Common Securities and
(iii) to purchase and hold the Debentures;
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<PAGE> 19
(v) Under the Delaware Act and the
Declaration, the execution and delivery by the Trust
of this Agreement, and the performance by the Trust
of its obligations hereunder, have been duly
authorized by all necessary trust action on the part
of the Trust;
(vi) The Capital Securities have been duly
authorized by the Declaration and are duly and
validly issued and, subject to the qualifications set
forth herein, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust and
are entitled to the benefits of the Declaration. The
holders of the Capital Securities, as beneficial
owners of the Trust, will be entitled to the same
limitation of personal liability extended to
stockholders of private corporations for profit
organized under the General Corporation Law of the
State of Delaware. Such counsel may note that the
holders of Capital Securities may be obligated,
pursuant to the Declaration, (i) to provide indemnity
and/or security in connection with and pay taxes or
governmental charges arising from transfers or
exchanges of certificates of Capital Securities and
the issuance of replacement certificates of Capital
Securities, and (ii) to provide security or indemnity
in connection with requests of or directions to the
Property Trustee to exercise its rights and powers
under the Declaration;
(vii) The Common Securities have been duly
authorized by the Declaration and are validly issued
undivided beneficial interests in the assets of the
Trust and are entitled to the benefits of the
Declaration.
(viii) Under the Delaware Act and the
Declaration, the issuance of the Capital Securities
and Common Securities is not subject to preemptive
rights;
(ix) The issuance and sale by the Trust of
the Capital Securities and Common Securities, the
execution, delivery and performance by the Trust of
the Underwriting Agreement, the consummation by the
Trust of the transactions contemplated hereby and
compliance by the Trust with its obligations
hereunder, and the performance by the Company, as
depositor, of its obligations under the Declaration
(A) do not violate (i) any of the provisions of the
certificate of trust of the Trust or the Declaration
or (ii) any applicable Delaware law or administrative
regulation (except that such counsel need express no
opinion with respect to the securities laws of the
State of Delaware) and (B) do not require any
consent, approval, license, authorization or
validation of, or filing or registration with, any
Delaware legislative, administrative or regulatory
body under the laws or administrative regulations of
the State of Delaware (except that such counsel need
express no opinion with respect to the securities
laws of the state of Delaware); and
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<PAGE> 20
(x) Assuming that the Trust derives no
income from or in connection with sources within the
State of Delaware and has no assets, activities
(other than maintaining the Delaware Trustee and the
filing of documents with the Secretary of State of
the State of Delaware) or employees in the State of
Delaware, the holders of the Capital Securities
(other than those holders of Capital Securities who
reside or are domiciled in the State of Delaware)
will have no liability for income taxes imposed by
the State of Delaware solely as a result of their
participation in the Trust, and the Trust will not be
liable for any income tax imposed by the State of
Delaware.
(j) On each Closing Date there shall have been furnished to
the Representatives the opinion (addressed to the Underwriters) of
Thacher Proffitt & Wood, counsel for the Underwriters, with respect to,
as applicable, the incorporation of the Company, the Registration
Statement, the Prospectus (other than financial statements and other
financial data included therein) and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such documents and information as they may reasonably request
to enable them to pass upon such matters.
(k) The Capital Securities to be purchased on each Closing
Date by the Underwriters shall have been approved for listing on the
NASDAQ National Market System.
(l) All corporate proceedings and other legal matters incident
to the authorization, form and validity of the Operative Documents, the
Registration Statement and the Prospectus shall be satisfactory in all
respects to counsel for the Underwriters, and the Representatives shall
have been furnished with such additional documents and certificates as
the Representatives or counsel for the Underwriters may reasonably
request related to this Agreement, the Prospectus or the transactions
contemplated hereby.
(m) If the Capital Securities have been qualified for sale in
Florida, the Representatives shall have received on each Closing Date
certificates, addressed to the Representatives, and dated such Closing
Date, of an executive officer of the Company, stating solely in his
capacity as an executive officer of the Company, to the effect that the
signer of such certificate has reviewed and understands the provisions
of Section 517.075 of the Florida Statutes, and represents that, to his
knowledge after due inquiry, the Company has complied, and at all times
will comply, with all provisions of Section 517.075 and further, that
as of such Closing Date, neither the Company nor any of its affiliates
does business with the government of Cuba or with any person or
affiliate located in Cuba.
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<PAGE> 21
6. COVENANTS OF THE TRUST AND THE COMPANY. (A) The Trust and
the Company covenant and agree as follows:
(a) To prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the second business day following the
execution and delivery of this Agreement, and to promptly advise the
Representatives (i) when any amendment to the Registration Statement
shall have become effective, (ii) of any request by the Commission for
any amendment of the Registration Statement or the Prospectus or for
any additional information, (iii) of the prevention or suspension of
the use of any Preliminary Prospectus or the Prospectus or of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose, and (iv) of the receipt
by the Trust or the Company of any notification with respect to the
suspension of the qualification of the Capital Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose. Neither the Trust nor the Company shall file any
amendment of the Registration Statement or supplement to the Prospectus
unless the Trust or the Company has furnished the Representatives a
copy for its review prior to filing and shall not file any such
proposed amendment or supplement to which the Representatives
reasonably object. Each of the Trust and the Company shall use its best
efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Capital
Securities is required to be delivered under the Securities Act and the
Rules, any event occurs as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend or
supplement the Prospectus to comply with the Securities Act or the
Rules, to promptly shall prepare and file with the Commission, subject
to the second sentence of paragraph (a) of this Section 6(A), an
amendment or supplement which shall correct such statement or omission
or an amendment which shall effect such compliance.
(c) To make generally available to its security holders and to
the Representatives as soon as practicable, but not later than 45 days
after the end of the 12-month period beginning at the end of the fiscal
quarter of the Company during which the Effective Date occurs (or 90
days if such 12-month period coincides with the Company's fiscal year),
an earnings statement (which need not be audited) of the Company,
covering such 12-month period, which shall satisfy the provisions of
Section 11(a) of the Securities Act or Rule 158 of the Rules.
(d) To furnish to the Representatives and counsel for the
Underwriters, without charge, (i) signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) and
to each other Underwriter a copy of the Registration Statement (without
exhibits thereto) and all amendments thereof (ii) copies of any
document incorporated by reference in the Prospectus (including
exhibits thereto) and, (iii) so long as
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<PAGE> 22
delivery of a prospectus by an Underwriter or dealer may be required by
the Securities Act or the Rules, as many copies of any preliminary
prospectus and the Prospectus and any amendments thereof and
supplements thereto as the Representatives may reasonably request.
(e) To cooperate with the Representatives and their counsel in
endeavoring to qualify the Capital Securities for offer and sale under
the laws of such jurisdictions as the Representatives may designate and
to maintain such qualifications in effect so long as required for the
distribution of the Capital Securities.
(f) For a period of five years after the date of this
Agreement, to supply to the Representatives, copies of such financial
statements and other periodic and special reports as the Company may
from time to time distribute generally to the holders of any class of
its capital stock and to furnish to the Representatives a copy of each
annual or other report it shall be required to file with the
Commission.
(g) Without the prior written consent of CIBC Oppenheimer
Corp., on behalf of the Representatives, for a period of 180 days after
the date of this Agreement, not to offer, issue, sell, contract to sell
or otherwise dispose of any additional securities of the Trust or the
Company substantially similar to the Capital Securities or any
securities convertible into or exchangeable for or that represent the
right to receive any such similar securities.
(h) On or before completion of this offering the Company and
the Trust shall make all filings required under applicable securities
laws and by the NASDAQ National Market System.
(B) Each of the Trust and the Company agrees to pay, or reimburse if
paid by the Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses incident
to the public offering of the Capital Securities and the performance of the
obligations of the Trust and the Company under this Agreement including those
relating to: (i) the preparation, printing, filing and distribution of the
Registration Statement including all exhibits thereto, each Preliminary
Prospectus, the Prospectus, all amendments and supplements to the Registration
Statement and the Prospectus, and the printing filing and distribution of this
Agreement; (ii) the preparation and delivery of certificates for the Capital
Securities to the Underwriters; (iii) the registration or qualification of the
Capital Securities for offer and sale under the securities or Blue Sky laws of
the various jurisdictions referred to in Section 6(A)(e), including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such registration and qualification and the preparation, printing,
distribution and shipment of preliminary and supplementary Blue Sky memoranda;
(iv) the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of each Preliminary
Prospectus, the Prospectus and all amendments or supplements to the Prospectus,
and of the several documents required by this Section to be so furnished, as may
be reasonably requested for use in connection with the offering and sale of the
Capital Securities by the Underwriters or by dealers to whom Capital Securities
may be sold; (v) the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of all reports and information
required by Section 6(A)(vi); (vi) inclusion of the Capital Securities for
quotation on the NASDAQ
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<PAGE> 23
National Market System and (vii) all transfer taxes, if any, with respect to the
sale and delivery of the Capital Securities by the Trust to the Underwriters.
Subject to the provisions of Section 9, the Underwriters agree to pay, whether
or not the transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the
obligations of the Underwriters under this Agreement not payable by the Company
or the Trust pursuant to the preceding sentence, including without limitation,
the fees and disbursements of counsel for the Underwriters.
7. INDEMNIFICATION.
(a) The Trust and the Company agree, jointly and severally, to
indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all
losses, claims, damages and liabilities, joint or several (including
any reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claim asserted), to which they, or any of them may
become subject under the Securities Act, the Exchange Act or other
Federal or state law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any amendment thereof or supplement
thereto, or arise out of or are based upon any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided,
however, that such indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on account of
any losses, claims, damages or liabilities arising from the sale of the
Capital Securities to any person by such Underwriter if such untrue
statement or omission or alleged untrue statement or omission was made
in such Preliminary Prospectus, the Registration Statement or the
Prospectus, or such amendment or supplement, in reliance upon and in
conformity with information furnished in writing to the Company by the
Representatives on behalf of any Underwriter specifically for use
therein. This indemnity agreement will be in addition to any liability
which the Trust and the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Trust and the Company, each person if
any, who controls the Trust or the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
each director of the Company, and each officer of the Trust or of the
Company who signs the Registration Statement, to the same extent as the
foregoing indemnity from the Trust and the Company to each Underwriter,
but only insofar as such losses, claims, damages or liabilities arise
out of or are based upon any untrue statement or omission or alleged
untrue statement or omission which was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment thereof or supplement thereto, contained in the paragraph
relating to stabilization and the statements contained in the third
paragraph, and the second sentence in the eighth paragraph under the
caption "Underwriting" in the Prospectus.
23
<PAGE> 24
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served. No indemnification provided for in Section 7(a) or
7(b) shall be available to any party who shall fail to give notice as
provided in this Section 7(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice, but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnified party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such, counsel, the
indemnifying party shall not be liable to such indemnified party for
any legal or other expenses, except as provided below and except for
the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the
indemnifying parties and the indemnified party in the conduct of the
defense of such action (in which case the indemnifying parties shall
not have the right to direct the defense of such action on behalf of
the indemnified party) or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of
which cases the fees and expenses of counsel shall be at the expense of
the indemnifying parties. An indemnifying party shall not be liable for
any settlement of any action suit, proceeding or claim effected without
its written consent, which shall not be unreasonably withheld.
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) is due in accordance with its terms but for any reason is held to
be unavailable from the Trust or the Company, each of the Trust, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting any contribution
received by the Trust or the Company from persons other than the Underwriters,
such as persons who control the Trust or the Company within the meaning of the
Securities Act, officers of the Trust or of the Company who signed the
Registration Statement and directors of the Company, who may also be liable for
contribution) to which the Trust,
24
<PAGE> 25
the Company and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Trust and the Company on the one hand and the Underwriters on the other from the
offering of the Capital Securities or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 7 hereof,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Trust and the Company on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Trust, the Company and the Underwriters shall be deemed
to be in the same proportion as (x) the total proceeds from the offering before
deducting expenses received by the Trust and the Company, as set forth in the
table on the cover page of the Prospectus, bear to (y) the underwriting
discounts received by the Underwriters, as set forth in the table on the cover
page of the Prospectus. The relative fault of the Trust and the Company or the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact related to information
supplied by the Trust and the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Trust, the Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 8, (i) in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Capital Securities purchased by such
Underwriter hereunder, and (ii) the Trust and the Company shall be liable and
responsible for any amount in excess of such underwriting discount; PROVIDED,
HOWEVER, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Trust or the
Company within the meaning of the Section 15 of the Securities Act or Section
20(a) of the Exchange Act, each officer of the Trust or of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Trust and the Company, subject in
each case to clauses (i) and (ii) in the immediately preceding sentence of this
Section 8. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom contribution
my be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriters' obligations to contribute
pursuant to this Section 8 are several in proportion to their respective
underwriting commitments and not joint.
25
<PAGE> 26
9. TERMINATION. This Agreement may be terminated with respect
to the Capital Securities to be purchased on a Closing Date by the
Representatives by notifying the Trust and the Company at any time:
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted,
or in the opinion of the Representatives will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States of America is such as to make it, in the judgment of the
Representatives, inadvisable to proceed with the offering; (iii) if
there shall be such a material adverse change in general financial,
political or economic conditions or the effect of international
conditions on the financial markets in the United States of America is
such as to make it, in the judgment of the Representatives, inadvisable
or impracticable to market the Capital Securities; (iv) if trading in
the Capital Securities has been suspended by the Commission or trading
generally on the New York Stock Exchange, Inc. or on the American Stock
Exchange, Inc. has been suspended or limited, or minimum or maximum
ranges for prices for securities shall have been fixed, or maximum
ranges for prices for securities have been required, by said exchanges
or by order of the Commission, the National Association of Securities
Dealers, Inc., or any other governmental or regulatory authority; or
(v) if a banking moratorium has been declared by any state or Federal
authority, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, neither the Trust nor the Company shall be under any liability to
any Underwriter, and no Underwriter shall be under any liability to the Trust
and the Company, except that (y) if this Agreement is terminated by the
Representatives or the Underwriters because of any failure, refusal or inability
on the part of the Trust or the Company to comply with the terms or to fulfill
any of the conditions of this Agreement or is terminated in accordance with the
provisions of this Section 9, the Trust or the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Capital Securities or in contemplation of performing
their obligations hereunder and (z) no Underwriter who shall have failed or
refused to purchase the Capital Securities agreed to be purchased by it under
this Agreement, without some reason sufficient hereunder to justify cancellation
or termination of its obligations under this Agreement, shall be relieved of
liability to the Trust, the Company or to the other Underwriters for damages
occasioned by its failure or refusal.
10. SUBSTITUTION OF UNDERWRITERS. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 9) to purchase on
any Closing Date the Capital Securities agreed to be purchased on such Closing
Date by such Underwriter or Underwriters, the Representatives may find one or
more substitute underwriters to purchase such Capital Securities or make such
other arrangements as the Representatives may deem advisable or one or more of
the remaining Underwriters may agree to
26
<PAGE> 27
purchase such Capital Securities in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Capital Securities to be purchased by the
defaulting Underwriters on such Closing Date shall not exceed 10% of
the Capital Securities that all the Underwriters are obligated to
purchase on such Closing Date, then each of the nondefaulting
Underwriters shall be obligated to purchase such Capital Securities on
the terms herein set forth in proportion to their respective
obligations hereunder; PROVIDED, THAT in no event shall the maximum
number of Capital Securities that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 10
by more than one ninth of such number of Capital Securities without the
written consent of such Underwriter, or
(b) if the number of Capital Securities to be purchased by the
defaulting Underwriters on such Closing Date shall exceed 10% of the
Capital Securities that all the Underwriters are obligated to purchase
on such Closing Date, then the Company and Trust shall be entitled to
an additional business day within which it may, but is not obligated
to, find one or more substitute underwriters reasonably satisfactory to
the Representatives to purchase such Capital Securities upon the terms
set forth in this Agreement.
In any such case, either the Representatives, the Trust or the
Company shall have the right to postpone the applicable Closing Date for a
period of not more than five (5) business days in order that necessary changes
and arrangements (including any necessary amendments or supplements to the
Registration Statement or Prospectus) may be effected by the Representatives,
the Trust and the Company. If the number of Capital Securities to be purchased
on such Closing Date by such defaulting Underwriter or Underwriters shall exceed
10% of the Capital Securities that all the Underwriters are obligated to
purchase on such Closing Date, and none of the nondefaulting Underwriters, the
Trust or the Company shall make arrangements pursuant to this Section within the
period stated for the purchase of the Capital Securities that the defaulting
Underwriters agreed to purchase, this Agreement shall terminate with respect to
the Capital Securities to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Trust and the Company and
without liability on the part of the Trust and the Company, except in both cases
as provided in Sections 6(B), 7, 8 and 9. The provisions of this Section shall
not in any way affect the liability of any defaulting Underwriter to the Trust,
the Company or the nondefaulting Underwriters arising out of such default. A
substitute underwriter hereunder shall become an Underwriter for all purposes of
this Agreement
11. MISCELLANEOUS. The respective agreements, representations,
warranties, indemnities and other statements of the Trust and the Company or
their officers and of the Underwriters set forth in or made pursuant to this
Agreement shall remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter, the Trust or the Company or any of the
officers, directors or controlling persons referred to in Sections 7 and 8
hereof, and shall survive delivery of and payment for the Capital Securities.
The provisions of Sections 6(B), 7, 8 and 9 shall survive the termination or
cancellation of this Agreement.
27
<PAGE> 28
This Agreement has been and is made for the benefit of the
Underwriters, the Trust and the Company, and each of their respective successors
and assigns, and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, the Trust or the Company, and directors and
officers of the Trust and the Company, and each of their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include
any purchaser of Capital Securities from any Underwriter merely because of such
purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Representatives, c/o CIBC Oppenheimer Corp.,
Oppenheimer Tower, World Financial Center, New York, New York 10281 Attention:
Mark C. Biderman, (b) if to the Trust or the Company, to the address of the
Company set forth on the cover page of the Registration Statement, Attention:
Secretary.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
HAMILTON CAPITAL TRUST I
By
------------------------------------
Name:
Title:
HAMILTON BANCORP INC.
By
------------------------------------
Name
Title:
28
<PAGE> 29
Confirmed:
CIBC OPPENHEIMER CORP.
RAYMOND JAMES & ASSOCIATES, INC.
Acting severally on behalf of themselves and as representatives of the several
Underwriters named in Schedule I annexed hereto.
By CIBC OPPENHEIMER CORP.
By
------------------------------------
Name:
Title:
29
<PAGE> 30
SCHEDULE I
NUMBER OF
CAPITAL-SECURITIES
SECURITIES UNDERWRITER TO BE PURCHASED
- ---------------------- ------------------
CIBC Oppenheimer Corp.....................................
Raymond James & Associates, Inc...........................
--------------------
[1,100,000]
====================
30
<PAGE> 1
EXHIBIT 4.3
================================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
OF
HAMILTON CAPITAL TRUST I
Dated as of December [__], 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
<S> <C>
SECTION 1.1 Definitions.........................................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application....................................................9
SECTION 2.2 Lists of Holders of Securities......................................................9
SECTION 2.3 Reports by the Property Trustee....................................................10
SECTION 2.4 Periodic Reports...................................................................10
SECTION 2.5 Evidence of Compliance with Conditions Precedent...................................10
SECTION 2.6 Events of Default; Waiver..........................................................10
SECTION 2.7 Default; Notice....................................................................12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name...............................................................................13
SECTION 3.2 Office.............................................................................13
SECTION 3.3 Purpose............................................................................13
SECTION 3.4 Authority..........................................................................13
SECTION 3.5 Title to Property of the Trust.....................................................14
SECTION 3.6 Powers and Duties of the Administrative Trustees...................................14
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees...............................17
SECTION 3.8 Powers and Duties of the Property Trustee..........................................17
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee........................20
SECTION 3.10 Certain Rights of Property Trustee.................................................22
SECTION 3.11 Delaware Trustee...................................................................24
SECTION 3.12 Execution of Documents.............................................................24
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.............................24
SECTION 3.14 Duration of Trust..................................................................24
SECTION 3.15 Mergers............................................................................25
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities............................................27
SECTION 4.2 Responsibilities of the Sponsor....................................................27
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
SECTION 4.3 Right to Proceed...................................................................27
SECTION 4.4 Right to Dissolve Trust............................................................28
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee......................................28
SECTION 5.2 Delaware Trustee...................................................................29
SECTION 5.3 Property Trustee; Eligibility......................................................29
SECTION 5.4 Certain Qualifications of Administrative Trustees and
Delaware Trustee Generally.........................................................30
SECTION 5.5 Administrative Trustees............................................................30
SECTION 5.6 Appointment, Removal and Resignation of Trustees...................................31
SECTION 5.7 Vacancies among Trustees...........................................................33
SECTION 5.8 Effect of Vacancies................................................................33
SECTION 5.9 Meetings...........................................................................33
SECTION 5.10 Delegation of Power................................................................34
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business........................34
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions......................................................................34
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities............................................35
SECTION 7.2 Issuance of Series A Capital Securities and Common Securities......................35
SECTION 7.3 The Trust Security Certificates....................................................36
SECTION 7.4 Execution and Delivery of Trust Security Certificates..............................37
SECTION 7.5 Registrar, Paying Agent and Exchange Agent.........................................37
SECTION 7.6 Registration of Transfer and Exchange of Series
A Capital Security Certificates....................................................37
SECTION 7.7 Book-Entry Series A Capital Security Certificates;
Common Security Certificate........................................................38
SECTION 7.8 Paying Agent to Hold Money in Trust................................................39
SECTION 7.9 Replacement Securities.............................................................39
SECTION 7.10 Outstanding Series A Capital Securities............................................39
SECTION 7.11 Series A Capital Securities in Treasury............................................40
SECTION 7.12 Cancellation.......................................................................40
SECTION 7.13 CUSIP Numbers......................................................................40
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust...............................................................41
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.............................................................42
SECTION 9.2 Definitive Series A Capital Security Certificates..................................42
SECTION 9.3 Temporary Securities...............................................................44
SECTION 9.4 Deemed Security Holders............................................................45
SECTION 9.5 Notices to Clearing Agency.........................................................45
SECTION 9.6 Appointment of Successor Clearing Agency...........................................46
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability..........................................................................46
SECTION 10.2 Exculpation........................................................................46
SECTION 10.3 Fiduciary Duty.....................................................................47
SECTION 10.4 Indemnification....................................................................48
SECTION 10.5 Outside Businesses.................................................................51
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year........................................................................51
SECTION 11.2 Certain Accounting Matters.........................................................51
SECTION 11.3 Banking............................................................................52
SECTION 11.4 Withholding........................................................................52
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.........................................................................52
SECTION 12.2 Meetings of the Holders; Action by Written Consent.................................54
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.................................56
SECTION 13.2 Representations and Warranties of Delaware Trustee.................................56
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices............................................................................57
SECTION 14.2 Governing Law......................................................................58
SECTION 14.3 Intention of the Parties...........................................................59
SECTION 14.4 Headings...........................................................................59
SECTION 14.5 Successors and Assigns.............................................................59
SECTION 14.6 Partial Enforceability.............................................................59
SECTION 14.7 Counterparts.......................................................................59
TERMS OF
[___%] CAPITAL SECURITIES, SERIES A
[___%] COMMON SECURITIES, SERIES A.........................................................I-1
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE.........................................................A1-1
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE..........................................................A2-1
</TABLE>
iv
<PAGE> 6
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture
Act of 1939, as Section of
amended Declaration
- --------------- -----------
<S> <C>
310(a) ...................................................................... 5.3
310(b) ...................................................................... 5.3(c), 5.3(d)
311(a) ...................................................................... 2.2(b)
311(b) ...................................................................... 2.2(b)
312(a) ...................................................................... 2.2(a)
312(b) ...................................................................... 2.2(b)
313 ...................................................................... 2.3
314(a) ...................................................................... 2.4; 3.6(j)
314(c) ...................................................................... 2.5
315(a) ...................................................................... 3.9
315(b) ...................................................................... 2.7(a)
315(c) ...................................................................... 3.9(a)
315(d) ...................................................................... 3.9(b)
316(a) ...................................................................... 2.6
316(c) ...................................................................... 3.6(e)
317(a) ...................................................................... 3.8(e); 3.8(h)
317(b) ...................................................................... 3.8(i); 7.5
318 ...................................................................... 2.1
</TABLE>
- ------------------
* This Cross-Reference Table does not constitute part of this
Declaration and shall not affect the interpretation of any of its
terms or provisions.
v
<PAGE> 7
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
HAMILTON CAPITAL TRUST I
Dated as of December [__], 1998
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of December [__], 1998, by and among the Trustees (as
defined herein), the Sponsor (as defined herein) and the Holders (as defined
herein), from time to time, of undivided beneficial interests in the assets of
the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Hamilton
Capital Trust I (the "Trust"), a trust created under the Delaware Business
Trust Act pursuant to a Declaration dated as of December [__], 1998 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on December [__], 1998, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust, investing the proceeds thereof solely in
certain Series A Debentures of the Debenture Issuer (each as hereinafter
defined) with no power to vary that investment, and engaging in only those
activities necessary, advisable or incidental thereto; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Original Declaration; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, ratify the actions of each Trustee taken prior to the date hereof;
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration and, in consideration
of the mutual covenants contained herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties,
intending to be legally bound hereby, agree as follows:
<PAGE> 8
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not
defined in the preamble above or elsewhere herein have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration and each Annex and Exhibit hereto, as
modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and Annexes
and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires;
(f) a term defined in the Indenture (as defined herein)
has the same meaning when used in this Declaration unless otherwise defined in
this Declaration or the context otherwise requires; and
(g) a reference to the singular includes the plural and
vice versa.
"Administrative Trustee" has the meaning set forth in
Section 5.1.
"Affiliate" has the same meaning as given to that term in
Rule 405 under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Exchange
Agent.
"Authorized Officer" of a Person means any other Person
that is authorized to legally bind such former Person.
"Book-Entry Interest" means a beneficial interest in the
Global Capital Security registered in the name of a Clearing Agency or its
nominee, ownership and transfers of which shall be maintained and made through
book entries by a Clearing Agency as described in Section 9.4.
2
<PAGE> 9
"Business Day" means any day other than a Saturday or a
Sunday or a day on which banking institutions in Wilmington, Delaware, New York,
New York or Miami, Florida are authorized or required by law or executive order
to remain closed.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Capital Security Beneficial Owner" means, with respect to
a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Series A Capital Securities and in whose name or in the name
of a nominee of that organization shall be registered a global certificate and
which shall undertake to effect book entry transfers and pledges of the Series
A Capital Securities.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from time to time
the Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date" has the meaning specified in the
Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and
Exchange Commission as from time to time constituted, or if at any time after
the execution of this Declaration such Commission is not existing and
performing the duties now assigned to it under applicable federal securities
laws, then the body performing such duties at such time.
"Common Securities" has the meaning specified in
Section 7.1(a).
"Common Securities Guarantee" means the Common Securities
Guarantee Agreement, dated as of the Closing Date, entered into by Hamilton
Bancorp Inc., with respect to the Common Securities.
"Common Securities Subscription Agreement" means the
Common Securities Subscription Agreement, dated as of the Closing Date, between
the Trust and Hamilton Bancorp Inc. relating to the Common Securities.
"Common Security Certificate" means a certificate
evidencing ownership of Common Securities, substantially in the form attached
as Exhibit A-2.
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"Company Indemnified Person" means (a) any Administrative
Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or
agents of any Administrative Trustee; or (d) any officer, employee or agent of
the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the Property Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Declaration is located at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Hamilton Bancorp Inc., a Florida
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer
of the Series A Debentures under the Indenture.
"Debenture Subscription Agreement" means the Debenture
Subscription Agreement, dated as of the Closing Date, between the Debenture
Issuer and the Trust in respect of the Series A Debentures.
"Debenture Trustee" means Wilmington Trust Company, a
Delaware banking corporation, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Default" means an event, act or condition that with
notice or lapse of time, or both, would constitute an Event of Default.
"Definitive Capital Securities" has the meaning set forth
in Section 7.3(c).
"Delaware Trustee" has the meaning set forth in
Section 5.1.
"Direct Action" has the meaning set forth in
Section 3.8(e).
"Distribution" means a distribution payable to Holders in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" with respect to the Securities means an
Event of Default (as defined in the Indenture) that has occurred and is
continuing with respect to the Series A Debentures.
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"Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in Section 7.5.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System.
"Fiduciary Indemnified Person" has the meaning set forth
in Section 10.4(b).
"Firm Securities Closing Date" has the meaning specified
in the Underwriting Agreement.
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Capital Security" means the Series A Capital
Security Certificate issued to the Clearing Agency at Closing.
"Holder" means a Person in whose name a Security or
Successor Security is registered, such Person being a beneficial owner within
the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or
a Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of the Closing
Date, between the Debenture Issuer and the Debenture Trustee, as amended from
time to time.
"Initial Optional Redemption Date" has the meaning set
forth in Section 4(b) of Annex I hereto.
"Investment Company" means an investment company as
defined in the Investment Company Act.
"Investment Company Act" means the Investment Company Act
of 1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in
Section 4(c) of Annex I hereto.
"Legal Action" has the meaning set forth in
Section 3.6(g).
"Like Amount" has the meaning set forth in Section 3 of
Annex I hereto.
"List of Holders" has the meaning set forth in
Section 2.2(a).
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"Majority in Liquidation Amount" means, with respect to
the Trust Securities, except as provided in the terms of the Series A Capital
Securities or by the Trust Indenture Act, Holders of outstanding Trust
Securities voting together as a single class or, as the context may require,
Holders of outstanding Series A Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the amount that
would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Officers' Certificate" means, with respect to any Person,
a certificate signed by the Chairman, the Chief Executive Officer, the
President, an Executive or Senior Vice President, a Vice President, the Chief
Financial Officer, and the Secretary or an Assistant Secretary. Any Officers'
Certificate delivered by the Trust shall be signed by at least one
Administrative Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Declaration shall
include:
(a) a statement that each officer signing the Certificate
has read the covenants or conditions and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, 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 an employee of the Sponsor, and who shall be acceptable to the
Property Trustee.
"Option Securities Closing Date" has the meaning specified
in the Underwriting Agreement.
"Participants" has the meaning specified in
Section 7.3(b).
"Paying Agent" has the meaning specified in Section 7.4.
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust,
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unincorporated association, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"PORTAL" has the meaning set forth in Section 3.6(b)
(iii).
"Property Trustee" has the meaning set forth in
Section 5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c)(i).
"Quorum" means a majority of the Administrative Trustees
or, if there are only two Administrative Trustees, both of them.
"Redemption Price" has the meaning set forth in
Section 4(a) of Annex I hereto.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Statement" has the meaning set forth in
Section 3.6(b).
"Regulatory Capital Event" has the meaning set forth in
Section 4(c) of Annex I hereto.
"Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any other Person
that owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
"Responsible Officer" means any officer within the
Corporate Trust Office of the Property Trustee with direct responsibility for
the administration of this Declaration and also means, with respect to a
particular corporate trust matter, any other officer of the Property Trustee to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company
Act, or any successor rule or regulation.
"Securities" or "Trust Securities" means the Common
Securities and the Series A Capital Securities.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities
Guarantee and the Series A Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in
Section 7.1(a).
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"Series A Capital Securities Guarantee" means the Series A
Capital Securities Guarantee Agreement, dated as of the Closing Date, by
Hamilton Bancorp Inc. in respect of the Series A Capital Securities.
"Series A Capital Security Certificate" means a
certificate evidencing ownership of Series A Capital Securities, substantially
in the form attached as Exhibit A-1.
"Series A Debentures" means the [___]% Junior Subordinated
Deferrable Interest Debentures due December [__], 2028, Series A, of the
Debenture Issuer issued pursuant to the Indenture.
"Special Event" has the meaning set forth in Section 4(c)
of Annex I hereto.
"Sponsor" means Hamilton Bancorp Inc., a Florida
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning set forth in
Section 5.6(b)(ii).
"Successor Entity" has the meaning set forth in
Section 3.15(b)(i).
"Successor Property Trustee" has the meaning set forth in
Section 3.8(f)(ii).
"Successor Securities" has the meaning set forth in
Section 3.15(b)(i).
"Super Majority" has the meaning set forth in
Section 2.6(a) (ii).
"Tax Event" has the meaning set forth in Section 4(c) of
Annex I hereto.
"10% in Liquidation Amount" means, with respect to the
Trust Securities, except as provided in the terms of the Series A Capital
Securities or by the Trust Indenture Act, Holders of outstanding Trust
Securities voting together as a single class or, as the context may require,
Holders of outstanding Series A Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of
10% or more of the aggregate liquidation amount (including the amount that
would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury Department, as such regulations may be amended from time
to time (including corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
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"Trust Property" means (a) the Series A Debentures, (b)
any cash on deposit in or owing to the Property Trustee Account and (c) all
proceeds and rights in respect of the foregoing and any other property and
assets for the time being held or deemed to be held by the Property Trustee
pursuant to this Declaration.
"Trust Security Certificate" means any one of the Common
Security Certificates or the Series A Capital Security Certificates.
"Trustee" or "Trustees" means each Person who has signed
this Declaration as a trustee, so long as such Person shall continue as a
trustee of the Trust in accordance with the terms hereof, and all other Persons
who may from time to time be duly appointed, qualified and serving as Trustees
in accordance with the provisions hereof, and references herein to a Trustee or
the Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.
"Underwriting Agreement" means the Underwriting Agreement,
dated December [__], 1998, by and among the Trust, the Debenture Issuer and the
Underwriters named therein, relating to the Series A Capital Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration in order
for this Declaration to be qualified under the Trust Indenture Act and shall,
to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that
is a trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by ss.ss.
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees
on behalf of the Trust shall provide the Property Trustee, unless the Property
Trustee is Registrar for the Securities, (i) by the Business Day prior to the
payment date for Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such record date, provided that, neither the Sponsor nor the
Administrative Trustees on behalf of
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the Trust shall be obligated to provide such List of Holders at any time that
the List of Holders does not differ from the most recent List of Holders given
to the Property Trustee by the Sponsor and the Administrative Trustees on
behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or which
it receives in the capacity as Paying Agent (if acting in such capacity),
provided that the Property Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its
obligations under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after the date hereof, and no later than
the anniversary date hereof in each succeeding year, the Property Trustee shall
provide to the Holders of the Series A Capital Securities such reports as are
required by ss. 313 of the Trust Indenture Act, if any, in the form and in the
manner provided by ss. 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of ss. 313(d) of the Trust Indenture
Act.
SECTION 2.4 Periodic Reports.
Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee, the Commission and
the Holders, such documents, reports and information as are required by ss. 314
(if any) of the Trust Indenture Act and the compliance certificate required by
ss. 314 of the Trust Indenture Act in the form, in the manner and at the times
required by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee such evidence of
compliance with any conditions precedent provided for in this Declaration that
relate to any of the matters set forth in ss. 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
ss. 314(c)(1) of the Trust Indenture Act may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of
Series A Capital Securities may, by vote, on behalf of the Holders of all of
the Series A Capital Securities, waive any past Event of Default in respect of
the Series A Capital Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event
of Default under the Declaration shall also not be
waivable; or
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(ii) requires the consent or vote of greater than
a majority in aggregate principal amount of the holders
of the Series A Debentures (a "Super Majority") to be
waived under the Indenture, the Event of Default under
the Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate
liquidation amount of the Series A Capital Securities
that the relevant Super Majority represents of the
aggregate principal amount of the Series A Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act, and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default with respect to
the Series A Capital Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend
to any subsequent or other Default or an Event of Default with respect to the
Series A Capital Securities or impair any right consequent thereon. Any waiver
by the Holders of the Series A Capital Securities of an Event of Default with
respect to the Series A Capital Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default
with respect to the Common Securities for all purposes of this Declaration
without any further act, vote or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in Liquidation Amount of
the Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except
where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration
as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable;
or
(ii) requires the consent or vote of a Super
Majority to be waived, except where the Holders of the
Common Securities are deemed to have waived such Event of
Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders
of at least the proportion in aggregate liquidation
amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of
the Series A Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and their consequences if all Events of Default with respect
to the Series A Capital Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely
on behalf of the Holders of the
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Series A Capital Securities, and only the Holders of the Series A Capital
Securities will have the right to direct the Property Trustee in accordance
with the terms of the Securities. The foregoing provisions of this Section
2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act, and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such Default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other Default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture
by the Property Trustee, at the direction of the Holders of the Series A
Capital Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c) shall
be in lieu of ss. 316(a)(1)(B) of the Trust Indenture Act, and such ss.
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Default; Notice.
(a) The Property Trustee shall, within 90 days after a
Responsible Officer obtains actual knowledge of the occurrence of a Default
with respect to the Securities, transmit by mail, first class postage prepaid,
to the Holders, notices of all such Defaults, unless such Defaults have been
cured before the giving of such notice or previously waived; provided, however,
that except in the case of a Default arising from the nonpayment of principal
of or interest (including Compounded Interest and Additional Sums (as such
terms are defined in the Indenture), if any) on any of the Series A Debentures,
the Property Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer in good faith determines that the withholding of
such notice is in the interests of the Holders.
(b) The Property Trustee shall not be deemed to have
knowledge of any Default or Event of Default except:
(i) a Default or Event of Default under Sections
5.01(a) (other than the payment of Compounded Interest
and Additional Sums) and 5.01(b) of the Indenture; or
(ii) any Default or Event of Default as to which
the Property Trustee shall have received written notice
or of which a Responsible Officer charged with the
administration of the Declaration shall have actual
knowledge.
(c) Within ten Business Days after a Responsible Officer
obtains actual knowledge of the occurrence of any Event of Default, the
Property Trustee shall transmit notice of such Event of Default to the Holders
of the Series A Capital Securities, the Administrative Trustees and the
Sponsor, unless such Event of Default shall have been cured or waived. The
Sponsor and
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the Administrative Trustees shall file annually with the Property Trustee a
certification as to whether or not they are in compliance with all the
conditions and covenants applicable to them under this Declaration.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named Hamilton Capital Trust I as such name
may be modified from time to time by the Administrative Trustees following
written notice to the Delaware Trustee, the Property Trustee and the Holders.
The Trust's activities may be conducted under the name of the Trust or any
other name deemed advisable by the Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Hamilton Bancorp Inc., 3750 N.W. 87th Avenue, Miami, Florida 33178. On ten
Business Days' prior written notice to the Delaware Trustee, the Property
Trustee and the Holders of Securities, the Administrative Trustees may
designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a)
to issue and sell the Securities, (b) use the proceeds from the sale of the
Securities to acquire the Series A Debentures, and (c) except as otherwise
limited herein, to engage in only those other activities necessary, advisable
or incidental thereto, including without limitation, those activities specified
in Sections 3.6, 3.8, 3.9, 3.10, 3.11 and/or 3.12. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, mortgage or
pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration
and to the specific duties of the Property Trustee, the Administrative Trustees
shall have exclusive and complete authority to carry out the purposes of the
Trust. An action taken by one or more of the Administrative Trustees in
accordance with their powers shall constitute the act of and serve to bind the
Trust and an action taken by the Property Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration.
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SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Series A Debentures and the Property Trustee Account or as otherwise provided
in this Declaration, legal title to all assets of the Trust shall be vested in
the Trust. The Holders shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees acting individually or
together shall have the power, duty and authority, and are hereby authorized and
directed, to cause the Trust to engage in the following activities:
(a) to execute, enter into and deliver the Common
Securities Subscription Agreement and to execute, deliver, issue and sell the
Securities in accordance with this Declaration; provided, however, that (i) the
Trust may issue no more than one series of Series A Capital Securities and no
more than one series of Common Securities, (ii) there shall be no interests in
the Trust other than the Securities, and (iii) the issuance of Securities shall
be limited to a simultaneous issuance of both Series A Capital Securities and
Common Securities on each Closing Date;
(b) in connection with the issue and sale of the Series A
Capital Securities at the direction of the Sponsor, to:
(i) prepare and execute, if necessary, one or more
registration statements including a prospectus and
prospectus supplements and any amendment thereto, in
preliminary and final form, relating to the offering and
sale of the Series A Capital Securities of the Trust
under the Securities Act, and such forms or filings as
may be required under the Securities Act, the Exchange
Act or the Trust Indenture Act (each a "Registration
Statement") prepared by the Sponsor;
(ii) execute and file any documents prepared by
the Sponsor, or take any acts as determined by the
Sponsor to be necessary in order to qualify or register
all or part of the Series A Capital Securities in any
State in which the Sponsor has determined to qualify or
register such Series A Capital Securities for sale;
(iii) execute and file an application, prepared by
the Sponsor, to permit the Series A Capital Securities to
trade or be quoted or listed in or on the Private
Offerings, Resales and Trading through Automated Linkages
("PORTAL") Market or any other securities exchange,
quotation system or the Nasdaq Stock Market's National
Market; and
(iv) execute and deliver the letters, documents,
or instruments with DTC and other Clearing Agencies
relating to the Series A Capital Securities, and if
required, execute and file with the Commission a
registration statement on Form 8-A, including any
amendments thereto, prepared by the Sponsor, relating to
the
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registration of the Capital Securities under Section
12(b) or 12(g) of the Exchange Act, as the case may be.
(c) to execute, enter into and deliver the Debenture
Subscription Agreement and to acquire the Series A Debentures with the proceeds
of the sale of the Series A Capital Securities and the Common Securities;
provided, however, that the Administrative Trustees shall cause legal title to
the Series A Debentures to be held of record in the name of the Property
Trustee for the benefit of the Holders;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date to be established,
including and with respect to, for the purposes of ss. 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and exchanges, and to
issue relevant notices to the Holders with respect to such actions and
applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the
Securities;
(g) to the fullest extent permitted by law, to bring or
defend, pay, collect, compromise, arbitrate, resort to legal action, or
otherwise adjust claims or demands of or against the Trust ("Legal Action"),
unless pursuant to Section 3.8(e), the Property Trustee has the exclusive power
to bring such Legal Action;
(h) to employ or otherwise engage employees, agents (who
may be designated as officers with titles), managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Administrative Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
Registrar and Exchange Agent for the Securities or to appoint a Paying Agent
for the Securities as provided in Section 7.5 except for such time as such
power to appoint a Paying Agent is vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee
and to the Holders of any notice received from the Debenture Issuer of its
election to defer payments of interest on the Series A Debentures by extending
the interest payment period under the Indenture;
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(n) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business trust
under the laws of the State of Delaware and of each other jurisdiction in which
such existence is necessary to protect the limited liability of the Holders or
to enable the Trust to effect the purposes for which the Trust was created;
(o) to take any action, not inconsistent with this
Declaration or with applicable law, that the Administrative Trustees determine
in their discretion to be necessary or desirable in carrying out the activities
of the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust to continue not to be
classified as an association taxable as a corporation or
causing the Trust to be classified as a grantor trust, in
each case for United States federal income tax purposes;
and
(iii) cooperating with the Debenture Issuer to ensure
that the Series A Debentures will be treated as
indebtedness of the Debenture Issuer for United States
federal income tax purposes;
(p) to take all action necessary to cause all applicable
tax returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Administrative
Trustees, on behalf of the Trust; and
(q) to execute and deliver all documents or instruments,
perform all duties and powers, and do all things for and on behalf of the Trust
in all matters necessary, advisable or incidental to the foregoing.
The Administrative Trustees must exercise the powers set
forth in this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Administrative Trustees
shall not take any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees
shall have none of the powers or the authority of the Property Trustee set
forth in Section 3.8.
Any expenses incurred by the Administrative Trustees
pursuant to this Section 3.6 shall be reimbursed by the Debenture Issuer.
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SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the
Property Trustee and the Delaware Trustee) shall not, and the Administrative
Trustees shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. Notwithstanding any provision in
this Declaration to the contrary, the Trust shall not:
(i) invest any proceeds received by the Trust from
holding the Series A Debentures, but shall distribute all
such proceeds to Holders pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust Property for other than a Trust
purpose or execute any mortgage in respect of, or pledge,
any Trust Property;
(iv) make any loans or incur any indebtedness
other than loans represented by the Series A Debentures;
(v) possess any power or otherwise act in such a
way as to vary the Trust Property or the terms of the
Securities in any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the
Trust other than the Securities;
(vii) other than as provided in this Declaration
or Annex I hereto, (A) direct the time, method and place
of conducting any proceeding with respect to any remedy
available to the Debenture Trustee, or exercising any
trust or power conferred upon the Debenture Trustee with
respect to the Series A Debentures, (B) waive any past
default that is waivable under the Indenture, or (C)
exercise any right to rescind or annul any declaration
that the principal of all the Series A Debentures shall
be due and payable; or
(viii)consent to any amendment, modification or
termination of the Indenture or the Series A Debentures
where such consent shall be required unless the Trust
shall have received an opinion of independent tax counsel
experienced in such matters to the effect that such
amendment, modification or termination will not cause
more than an insubstantial risk that the Trust will not
be classified as a grantor trust for United States
federal income tax purposes.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Series A Debentures shall be
owned by and held of record in the name of the Property Trustee in trust for
the benefit of the Trust and the Holders. The right, title and interest of the
Property Trustee to the Series A Debentures shall vest automatically
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in each Person who may hereafter be appointed as Property Trustee in accordance
with Section 5.6. Such vesting and cessation of title shall be effective
whether or not conveyancing documents with regard to the Series A Debentures
have been executed and delivered.
(b) The Property Trustee shall not transfer its right,
title and interest in the Series A Debentures to the Administrative Trustees or
to the Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated
non-interest bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive control
of the Property Trustee on behalf of the Holders and,
upon the receipt of payments of funds made in respect of
the Series A Debentures held by the Property Trustee,
deposit such funds into the Property Trustee Account and
make payments or cause the Paying Agent to make payments
to the Holders from the Property Trustee Account in
accordance with Section 6.1; funds in the Property
Trustee Account shall be held uninvested until disbursed
in accordance with this Declaration; and the Property
Trustee Account shall be an account that is maintained
with a banking institution the rating on whose long-term
unsecured indebtedness by a "nationally recognized
statistical rating organization," as that term is defined
for purposes of Rule 436(g)(2) under the Securities Act,
is at least equal to the rating assigned to the Series A
Capital Securities;
(ii) engage in such ministerial activities as
shall be necessary or appropriate to effect the
redemption of the Securities to the extent the Series A
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued
by the Administrative Trustees in accordance with the
terms of the Securities, engage in such ministerial
activities as shall be necessary or appropriate to effect
the distribution of the Series A Debentures to Holders
upon the occurrence of certain events.
(d) The Property Trustee shall take all actions and
perform such duties as may be specifically required of the Property Trustee
pursuant to the terms of this Declaration and the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall
take any Legal Action which arises out of or in connection with an Event of
Default of which a Responsible Officer has actual knowledge or the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act may so require; and if the Property Trustee shall have failed to take such
Legal Action following a written request from the Holders, the Holders of the
Series A Capital Securities may, to the fullest extent permitted by law, take
such Legal Action, to the same extent as if such Holders of Series A Capital
Securities held an aggregate principal amount of Series A Debentures equal to
the aggregate liquidation amount of such Series A Capital Securities, without
first proceeding against
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the Property Trustee or the Trust; provided, however, that if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay the principal of or interest (including
Compounded Interest and Additional Sums, if any) on the Series A Debentures on
the date such principal, or interest (including Compounded Interest and
Additional Sums, if any) is otherwise payable (or in the case of redemption, on
the redemption date), then a Holder of Series A Capital Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest (including Compounded Interest and Additional Sums, if
any) on the Series A Debentures having a principal amount equal to the
aggregate liquidation amount of the Series A Capital Securities of such Holder
(a "Direct Action") on or after the respective due date specified in the Series
A Debentures. In connection with such Direct Action, the Holders of the Common
Securities will be subrogated to the rights of such Holder of Series A Capital
Securities to the extent of any payment made by the Debenture Issuer to such
Holder of Series A Capital Securities in such Direct Action. Except as provided
in the preceding sentences, the Holders of Series A Capital Securities will not
be able to exercise directly any other remedy available to the holders of the
Series A Debentures.
(f) The Property Trustee shall continue to serve as a
Trustee until either:
(i) the Trust has been completely liquidated and
the proceeds of the liquidation distributed to the
Holders pursuant to the terms of the Securities and this
Declaration; or
(ii) a successor Property Trustee has been
appointed and has accepted that appointment in accordance
with Section 5.6 (a "Successor Property Trustee").
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Series A
Debentures under the Indenture, and, if an Event of Default actually known to a
Responsible Officer (other than in the case of Events of Default under Sections
5.01(a) and 5.01(b) of the Indenture) occurs and is continuing, the Property
Trustee shall, for the benefit of Holders, enforce its rights as holder of the
Series A Debentures subject to the rights of the Holders pursuant to the terms
of this Declaration and the Securities.
(h) The Property Trustee shall be authorized to undertake
any actions set forth in ss. 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying
Agent, the Property Trustee may authorize one or more Persons to act as
additional Paying Agents and to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all Securities, and
any such Paying Agent shall comply with ss. 317(b) of the Trust Indenture Act.
Any such additional Paying Agent may be removed by the Property Trustee at any
time the Property Trustee remains as Paying Agent, and a successor Paying Agent
or additional Paying Agents may be (but are not required to be) appointed at
any time by the Property Trustee while the Property Trustee is acting as Paying
Agent.
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(j) Subject to this Section 3.8, the Property Trustee
shall have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
Notwithstanding anything expressed or implied to the
contrary in this Declaration or any Annex or Exhibit hereto, (i) the Property
Trustee must exercise the powers set forth in this Section 3.8 in a manner that
is consistent with the purposes and functions of the Trust set out in Section
3.3, and (ii) the Property Trustee shall not take any action that is
inconsistent with the purposes and functions of the Trust set out in Section
3.3.
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee.
(a) The Property Trustee, before the occurrence of any
Event of Default (of which, other than in the case of Events of Default under
Sections 5.01(a) and 5.01(b) of the Indenture, a Responsible Officer of the
Property Trustee has actual knowledge) and after the curing or waiving of all
such Events of Default that may have occurred, shall undertake to perform only
such duties as are specifically set forth in this Declaration and in the
Securities, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6) of which a Responsible
Officer has actual knowledge (other than in the case of Events of Default under
Sections 5.01(a) and 5.01(b) of the Indenture), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, 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.
(b) No provision of this Declaration 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 an Event of Default
(of which, other than in the case of Events of Default under
Sections 5.01(a) and 5.01(b) of the Indenture, a Responsible
Officer of the Property Trustee has actual knowledge) 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 Declaration and in the Securities, and the Property
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth
in this Declaration and in the Securities, and no implied
covenants or obligations shall be read into this
Declaration against the Property Trustee; 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
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requirements of this Declaration; provided, however, that
in the case of any such certificates or opinions that by
any provision hereof 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 on their face they conform to the
requirements of this Declaration;
(ii) the Property 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 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
a Majority in Liquidation Amount of the Securities relating to
the time, method and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising
any trust or power conferred upon the Property Trustee under
this Declaration;
(iv) no provision of this Declaration 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;
(v) the Property Trustee's sole duty with respect to
the custody, safekeeping and physical preservation of the
Series A Debentures and the Property Trustee 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 Declaration and
the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Series A Debentures or the
payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree in writing with the Sponsor. Money held by the
Property Trustee need not be segregated from other funds held
by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or
the Sponsor with their respective duties under this
Declaration, nor shall the Property Trustee be liable for any
default or misconduct of the Administrative Trustees or the
Sponsor.
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SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to
be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Declaration
may be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable
that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative
Trustees;
(iv) the Property Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(including any financing or continuation statement or any
filing under tax or securities laws) or any rerecording,
refiling or registration thereof;
(v) the Property Trustee may consult with counsel
or other experts of its selection, and the advice or
opinion of such counsel and experts with respect to legal
matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance
with such advice or opinion; such counsel may be counsel
to the Sponsor or any of its Affiliates, and may include
any of its employees; and the Property Trustee shall have
the right at any time to seek instructions concerning the
administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested
in it by this Declaration at the request or direction of
any Holder, unless such Holder shall have provided to the
Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and
expenses and the expenses of the Property Trustee's
agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or
direction,
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including such reasonable advances as may be requested by
the Property Trustee; provided, however, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to
relieve the Property Trustee, upon the occurrence of an
Event of Default (of which, other than in the case of
Events of Default under Sections 5.01(a) and 5.01(b) of
the Indenture, a Responsible Officer of the Property
Trustee has actual knowledge), of its obligation to
exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to
make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property
Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see
fit;
(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents,
custodians, nominees or attorneys, and 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;
(ix) any authorized or required action taken by
the Property Trustee or its agents hereunder shall bind
the Trust and the Holders, and the signature of the
Property Trustee or its agents alone shall be sufficient
and effective to perform any such action, and no third
party shall be required to inquire as to the authority of
the Property Trustee to so act or as to its compliance
with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the
Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this
Declaration 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 Securities as would be entitled to direct the
Property Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii)
shall be protected in conclusively relying on or acting
in accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under
the provisions of this Declaration; and
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(xii) the Property Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it
in good faith, without negligence or willful misconduct,
and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by
this Declaration.
(b) No provision of this Declaration shall be deemed to
impose any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration
other than Section 5.2, the Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration (except as
required under the Business Trust Act). Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of ss. 3807 of the Business Trust Act. In the event
the Delaware Trustee shall at any time be required to take any action or
perform any duty hereunder, the Delaware Trustee shall be entitled to the
benefits of Section 3.9(b)(ii) to (viii), inclusive, and Section 3.10. No
implied covenants or obligations shall be read into this Declaration against
the Delaware Trustee.
SECTION 3.12 Execution of Documents.
Unless otherwise required by applicable law, each
Administrative Trustee, individually, is authorized to execute and deliver on
behalf of the Trust any documents, agreements, instruments or certificates that
the Administrative Trustees have the power and authority to execute pursuant to
Section 3.6.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the
Securities shall be taken as the statements of the Sponsor, and the Trustees do
not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the Trust Property or any part
thereof. The Trustees make no representations as to the validity or sufficiency
of this Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of
Article VIII hereof, shall have existence up to [_________ ___], 2053.
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SECTION 3.15 Mergers.
(a) The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any Person, except as
described in Section 3.15(b) and (c) and except with respect to the
distribution of Series A Debentures to Holders pursuant to Section 8.1(a)(iii)
of this Declaration or Section 3 of Annex I.
(b) The Trust may, at the request of the Sponsor, with
the consent of the Administrative Trustees or, if there are more than two, a
majority of the Administrative Trustees and without the consent of the Holders,
the Delaware Trustee or the Property Trustee, merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as
the Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the
Securities rank in priority with respect to
Distributions and payments upon liquidation,
redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of
the Successor Entity that possesses the same powers and
duties as the Property Trustee with respect to the Series
A Debentures;
(iii) the Successor Securities (excluding any
securities substituted for the Common Securities) are
listed, quoted or included for trading, or any Successor
Securities will be listed, quoted or included for trading
upon notification of issuance, on any national securities
exchange or with any other organization on which the
Series A Capital Securities are then listed, quoted or
included;
(iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause
the Series A Capital Securities (including any Successor
Securities) or the Series A Debentures to be downgraded
by any nationally recognized statistical rating
organization that publishes a rating on the Series A
Capital Securities or the Series A Debentures;
(v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges
of the Holders (including the holders of any Successor
Securities) in any material
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respect (other than with respect to any dilution of the
interests of such Holders or holders, as the case may be,
in the Successor Entity);
(vi) the Successor Entity has a purpose
substantially identical to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
the Sponsor has received an opinion of independent
counsel to the Trust experienced in such matters to the
effect that:
(A) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and
privileges of the Holders (including the holders of
any Successor Securities) in any material respect
(other than with respect to any dilution of the
interests of such Holders or holders, as the case
may be, in the Successor Entity);
(B) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor the Successor Entity
will be required to register as an Investment
Company; and
(C) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or
lease, the Trust (or the Successor Entity) will
continue not to be classified as an association
taxable as a corporation and will not be less likely
to be classified as a grantor trust for United
States federal income tax purposes;
(viii)the Sponsor or any permitted successor or
assignee owns all of the common securities of the
Successor Entity and guarantees the obligations of the
Successor Entity under the Successor Securities at least
to the extent provided by the Securities Guarantees; and
(ix) there shall have been furnished to the
Property Trustee an Officers' Certificate and an Opinion
of Counsel, each to the effect that all conditions
precedent in this Declaration to such transaction have
been satisfied.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in aggregate liquidation amount of
the Securities, consolidate, amalgamate, merge with or into, or be replaced by,
or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the Successor Entity not to be classified as a grantor
trust for United States federal income tax purposes.
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ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On each Closing Date, pursuant to the Common Securities
Subscription Agreement, the Sponsor will purchase all of the Common Securities
then issued by the Trust, in an amount equal to at least 3% of the total
capital of the Trust, at the same time as the Series A Capital Securities are
issued and sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Series A
Capital Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare and file with the Commission the
Registration Statements and any amendments thereto, and the prospectus to be
included therein, in preliminary and final form, and to prepare for filing by
the Trust with the Commission any other necessary documents, including any
amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Series A Capital
Securities and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) if deemed necessary or advisable by the Sponsor, to
prepare for filing by the Trust an application to permit the Series A Capital
Securities to trade or be quoted or listed in or on the PORTAL market, or any
other securities exchange, quotation system or the Nasdaq Stock Market's
National Market to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any amendments thereto, relating
to the registration of the Capital Securities under Section 12(b) or 12(g) of
the Exchange Act, as the case may be, including any amendments thereto; and to
negotiate the terms of, execute, enter into and deliver the Underwriting
Agreement.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of
Series A Capital Securities, in the event that a failure of the Trust to pay
Distributions on the Series A Capital Securities is attributable to the failure
of the Debenture Issuer to pay the principal of or interest on the Series A
Debentures, to institute a proceeding directly against the Debenture Issuer for
enforcement of its payment obligations in respect of the Series A Debentures.
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SECTION 4.4 Right to Dissolve Trust.
The Sponsor will have the right at any time to dissolve
the Trust and, after satisfaction of liabilities to creditors of the Trust as
required by applicable law, to cause the Series A Debentures to be distributed
to the Holders in liquidation of the Trust. Such right is subject to the
Sponsor's having received (i) an Opinion of Counsel to the effect that such
distribution will not cause the Holders of Series A Capital Securities to
recognize gain or loss for United States federal income tax purposes and (ii)
all required regulatory approvals.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities,
the Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural
person, shall be a person who is a resident of the State of Delaware or that,
if not a natural person, is an entity which has its principal place of business
in the State of Delaware (the "Delaware Trustee"); (2) there shall be at least
one Trustee who is an employee or officer of, or is affiliated with, the
Sponsor (an "Administrative Trustee"); and (3) one Trustee shall be the
Property Trustee for so long as this Declaration is required to qualify as an
indenture under the Trust Indenture Act, and such Trustee may also serve as
Delaware Trustee if it meets the applicable requirements. Notwithstanding the
above, 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 Holders of a Majority in Liquidation Amount of
the Common Securities acting as a class at a meeting of the Holders of the
Common Securities, and the Administrative Trustees shall have power to appoint
one or more Persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of the Trust Property, or to act as separate
trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or
Persons in such capacity any property, title, right or power deemed necessary
or desirable, subject to the provisions of this Declaration. In case an Event
of Default has occurred and is continuing, the Property Trustee alone shall
have power to make any such appointment of a co-trustee.
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SECTION 5.2 Delaware Trustee.
For so long as required by the Business Trust Act, the
Delaware Trustee shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law,
provided, however, that, if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the Delaware Trustee
and Section 3.11 shall have no application.
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn.: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopier: (302) 651-8882
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the
"Property Trustee") which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any
State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Commission to act as an indenture trustee under the Trust
Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and
surplus of at least fifty million U.S. dollars
($50,000,000), and subject to supervision or examination
by federal, state, territorial or District of Columbia
authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of
condition so published.
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(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as if it
were the obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of ss. 310(b) of the Trust Indenture
Act.
(d) The Series A Capital Securities Guarantee shall be
deemed to be specifically described in this Declaration for purposes of clause
(i) of the first proviso contained in ss. 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn.: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopier: (302) 651-8882
SECTION 5.4 Certain Qualifications of Administrative Trustees and
Delaware Trustee Generally.
Each Administrative Trustee and the Delaware Trustee
(unless the Property Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall act
through one or more Authorized Officers.
SECTION 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
John M.R. Jacobs
Marilyn Alvarado
Lynn Hernandez
c/o Hamilton Bancorp Inc.
3750 N.W. 87th Avenue
Miami, Florida 33178
Telephone: (305) 717-5620
Telecopier: (305) 717-5631
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Administrative Trustees is called with respect to
any matter over which the Administrative
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Trustees have power to act, any power of the Administrative Trustees may be
exercised by, or with the consent of, any one such Administrative Trustee.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b) hereof and to Section 6(b)
of Annex I hereto, Trustees may be appointed or removed without cause at any
time:
(i) until the issuance of any Securities, by
written instrument executed by the Sponsor;
(ii) unless an Event of Default shall have occurred
and be continuing after the issuance of any Securities, by
vote of the Holders of a Majority in Liquidation Amount of
the Common Securities voting as a class at a meeting of
the Holders of the Common Securities; and
(iii) if an Event of Default shall have occurred
and be continuing after the issuance of the Securities,
with respect to the Property Trustee or the Delaware
Trustee, by vote of Holders of a Majority in Liquidation
Amount of the Series A Capital Securities voting as a
class at a meeting of Holders of the Series A Capital
Securities, and with respect to the Administrative
Trustees, in the manner set forth in Section 5.6(a)(ii)
hereof.
(b) (i) The Trustee that acts as Property Trustee shall
not be removed in accordance with Section 5.6(a) until a Successor Property
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered to the
removed Property Trustee, the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall
not be removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2 and
5.4 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the removed Delaware Trustee, the Property Trustee (if the
removed Delaware Trustee is not also the Property Trustee), the Administrative
Trustees and the Sponsor.
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(c) A Trustee appointed to office shall hold office until
his successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the other Trustees, the Sponsor and the Trust, which resignation
shall take effect upon such delivery or upon such later date as is specified
therein; provided, however, that:
(i) No such resignation of the Trustee that acts
as the Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by
instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor, the
Delaware Trustee (if the resigning Property Trustee
is not also the Delaware Trustee) and the resigning
Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the Holders; and
(ii) no such resignation of the Trustee that acts
as the Delaware Trustee shall be effective until a
Successor Delaware Trustee has been appointed and has
accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust,
the Property Trustee (if the resigning Delaware Trustee
is not also the Property Trustee), the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities or, if an Event
of Default shall have occurred and be continuing after the issuance of the
Securities, the Holders of the Series A Capital Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor
Delaware Trustee shall have been appointed and accepted appointment as provided
in this Section 5.6 within 60 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee resigning or
being removed, as applicable, may petition any court of competent jurisdiction
for appointment of a Successor Property Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper to prescribe, appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
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(g) At the time of resignation or removal of the Property
Trustee or the Delaware Trustee, the Sponsor shall pay to such Trustee any
amounts that may be owed to such Trustee pursuant to Section 10.4.
(h) Any successor Delaware Trustee shall file an
amendment to the Certificate of Trust with the Secretary of State of the State
of Delaware identifying the name and principal place of business of such
Successor Delaware Trustee in the State of Delaware.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.l, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Administrative
Trustees or, if there are more than two, a majority of the Administrative
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section
5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to dissolve, liquidate or annul the Trust or to
terminate this Declaration. Whenever a vacancy in the number of Administrative
Trustees shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 5.6, the Administrative
Trustees in office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Administrative Trustee, meetings
of the Administrative Trustees shall be held from time to time upon the call of
any Administrative Trustee. Regular meetings of the Administrative Trustees may
be held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 24 hours before such meeting.
Notice of any telephonic meetings of the Administrative Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
24 hours before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of an Administrative Trustee at a meeting shall constitute a
waiver of notice of such meeting except where an Administrative Trustee attends
a meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Administrative Trustees may be taken at a meeting by vote of a majority of the
Administrative Trustees present (whether in person or by telephone) and
eligible to
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vote with respect to such matter, provided that, a Quorum is present, or
without a meeting by the unanimous written consent of the Administrative
Trustees. In the event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a written consent
of such Administrative Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any Registration Statement or amendment
thereto filed with the Commission, or making any other governmental filing.
(b) The Administrative Trustees shall have power to
delegate from time to time to such of their number or to officers of the Trust
the doing of such things and the execution of such instruments either in the
name of the Trust or the names of the Administrative Trustees or otherwise as
the Administrative Trustees may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the provisions of this
Declaration.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware
Trustee or any Administrative Trustee that is not a natural person, as the case
may be, may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Property Trustee or the Delaware Trustee, as the case may be, shall be a party,
or any Person succeeding to all or substantially all the corporate trust
business of the Property Trustee or the Delaware Trustee, as the case may be,
shall be the successor of the Property Trustee or the Delaware Trustee, as the
case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided such Person
shall be otherwise qualified and eligible under this Article and provided
further that, in the case of the Delaware Trustee, such Person shall file an
amendment to the Certificate of Trust with the Delaware Secretary of State as
contemplated in Section 5.6(h).
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
and Additional Sums) and/or principal on the Series A Debentures held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, to make a distribution (a "Distribution") of the Payment Amount
to Holders in accordance with the terms of the Securities.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall, on behalf of the
Trust, issue one class of capital securities representing preferred undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Series A Capital Securities") and one class of common
securities representing common undivided beneficial interests in the assets of
the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Trust shall issue no securities or other interests in the
assets of the Trust other than the Series A Capital Securities and the Common
Securities.
(b) The consideration received by the Trust for the
issuance of the Securities shall constitute a contribution to the capital of
the Trust and shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and nonassessable.
(d) Every Person, by virtue of having become a Holder or
a Series A Capital Security Beneficial Owner in accordance with the terms of
this Declaration, shall be deemed to have expressly assented and agreed to the
terms of, and shall be bound by, this Declaration.
SECTION 7.2 Issuance of Series A Capital Securities and Common
Securities.
(a) As of December [___], 1998, the Sponsor, on behalf of
the Trust and pursuant to the Original Declaration, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Declaration, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 7.3 and deliver to the Underwriters named in
the Underwriting Agreement, Series A Capital Security Certificates, registered
in the name of the nominee of the initial Clearing Agency, in an aggregate
amount of 1,100,000 Series A Capital Securities having an aggregate Liquidation
Amount of $11,000,000, against receipt of an aggregate purchase price of
$11,000,000, which amount such Administrative Trustee shall promptly deliver to
the Property Trustee. If the Underwriters exercise their Option and there is an
Option Securities Closing Date, then an Administrative Trustee, on behalf of
the Trust, shall execute in accordance with Section 7.3 and deliver to the
Underwriters named in the Underwriting Agreement, additional Series A Capital
Security Certificates, registered in the name of the nominee of the initial
Clearing Agency, in an aggregate amount of up to 165,000 Series A Capital
Securities having an aggregate Liquidation Amount of up to $1,650,000 against
receipt of the aggregate purchase price of up to $1,650,000, which amount such
Administrative Trustee shall promptly deliver to the Property Trustee.
(b) Contemporaneously with the execution and delivery of
this Declaration, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 7.3 and
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deliver to the Sponsor Common Security Certificates, registered in the name of
the Sponsor, in an aggregate amount of 34,021 Common Securities having an
aggregate Liquidation Amount of $340,210 against payment by the Sponsor of an
aggregate purchase price of $340,210, which amount such Administrative Trustee
shall promptly deliver to the Property Trustee. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Sponsor Series A Subordinated Debentures, registered in the name of the
Property Trustee and having an aggregate principal amount equal to $11,340,210,
and, in satisfaction of the purchase price, the Property Trustee, on behalf of
the Property Trustee, shall deliver to the Sponsor the sum of $11,340,210 (being
the sum of the amounts delivered to the Property Trustee pursuant to (i) the
second sentence of Section 7.2(a) and (ii) the first sentence of this Section
7.2(b)).
(c) If the Underwriters exercise the Option and there is
an Option Securities Closing Date, then an Administrative Trustee, on behalf of
the Trust, shall execute in accordance with Section 7.3 and deliver to the
Sponsor, Common Securities Certificates, registered in the name of the Sponsor,
in an aggregate amount of up to 5,104 Common Securities having an aggregate
Liquidation Amount of up to $51,040 against Payment by the Sponsor of an
aggregate purchase price of up to $51,040, which amount such Administrative
Trustee shall promptly deliver to the Property Trustee. Contemporaneously
therewith, an Administrative Trustee, on behalf of the Trust, shall subscribe to
and purchase from the Sponsor Series A Subordinated Debentures, registered in
the name of the Property Trustee and having an aggregate principal amount of up
to $1,701,040, and, in satisfaction of the purchase price of such Debentures,
the Property Trustee, on behalf of the Trust, shall deliver to the Sponsor the
sum of up to $1,701,040 (being the sum of the amounts delivered to the Property
Trustee pursuant to (i) the third sentence of Section 7.2(a) and (ii) the first
sentence of this Section 7.2(c)).
SECTION 7.3 The Trust Security Certificates
The Series A Capital Security Certificates shall be issued
in minimum denominations of $10 Liquidation Amount and integral multiples of $10
in excess thereof, and the Common Security Certificates shall be issued in
denominations of $10 Liquidation Amount and integral multiples thereof. The
Trust Security Certificates shall be executed on behalf of the Trust by manual
or facsimile signature of at least one Administrative Trustee. The Series A
Capital Security Certificates shall be authenticated by the Property Trustee by
manual signature of an authorized signatory thereof. Trust Security Certificates
bearing the signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust or the
Property Trustee shall be validly issued and entitled to the benefits of this
Declaration, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Security
Certificates or did not hold such offices at the date of delivery of such Trust
Security Certificates. A transferee of a Trust Security 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 Security Certificate in
such transferee's name pursuant to Sections 7.5, 7.7 and 9.2.
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SECTION 7.4 Execution and Delivery of Trust Security Certificates
On each Closing Date, the Administrative Trustees shall
cause Trust Security Certificates, in an aggregate Liquidation Amount as
provided in Section 7.2, to be executed on behalf of the Trust authenticated by
the Property Trustee and delivered to or upon the written order of the Sponsor,
signed by its chairman of the board, its president, any executive or senior vice
president, any managing director or any vice president, treasurer, assistant
treasurer or controller without further corporate action by the Sponsor, in
authorized denominations.
SECTION 7.5 Registrar, Paying Agent and Exchange Agent.
The Trust shall maintain in Wilmington, Delaware, (i) an
office or agency where Series A Capital Securities may be presented for
registration of transfer ("Registrar"), (ii) an office or agency where Series A
Capital Securities may be presented for payment ("Paying Agent") and (iii) an
office or agency where Securities may be presented for exchange ("Exchange
Agent"). The Registrar shall keep a register of the Series A Capital Securities
and of their transfer. The Trust may appoint the Registrar, the Paying Agent and
the Exchange Agent and may appoint one or more co-registrars, one or more
additional paying agents and one or more additional Exchange Agents in such
other locations as it shall determine. The term "Registrar" includes any
additional registrar, the term "Paying Agent" includes any additional paying
agent and the term "Exchange Agent" includes any additional Exchange Agent. The
Trust may change any Paying Agent, Registrar, co-registrar or Exchange Agent
without prior notice to any Holder. The Paying Agent, Registrar and Exchange
Agent shall be permitted to resign as Paying Agent upon 30 days' written notice
to the Property Trustee, the Administrative Trustees and the Sponsor. The Trust
shall notify the Property Trustee of the name and address of any Agent not a
party to this Declaration. If the Trust fails to appoint or maintain another
entity as Registrar, Paying Agent or Exchange Agent, the Property Trustee shall
act as such. The Trust or any of its Affiliates may act as Paying Agent,
Registrar, or Exchange Agent. The Trust shall act as Paying Agent, Registrar and
Exchange Agent for the Common Securities.
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent and Exchange Agent for the Series A Capital Securities.
SECTION 7.6 Registration of Transfer and Exchange of Series A Capital
Security Certificates
Upon surrender for registration of transfer of any
Series A Capital Security Certificate at the office or agency maintained
pursuant to Section 7.5, the Administrative Trustee, or any one of them shall
execute on behalf of the Trust, cause to be authenticated by the Property
Trustee and deliver, in the name of the designated transferee or transferees,
one or more new Series A Capital Security Certificates in authorized
denominations of a like aggregate Liquidation Amount dated the date of execution
by such Administrative Trustee or Trustees in accordance with the requirements
of Section 9.2(b).
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At the option of a Holder, Series A Capital Security
Certificates may be exchanged for other Series A Capital Security Certificates
in authorized denominations of the same class and of a like aggregate
Liquidation Amount upon surrender of the Series A Capital Security Certificates
to be exchanged at the office or agency maintained pursuant to Section 7.5.
Every Series A Capital Security Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to an Administrative
Trustee and the Securities Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Series A Capital Security
Certificate surrendered for registration of transfer or exchange shall be
canceled and subsequently disposed of by an Administrative Trustee or the
Securities Registrar in accordance with such Person's customary practice.
SECTION 7.7 Book-Entry Series A Capital Security Certificates; Common
Security Certificate
(a) The Series A Capital Security Certificates, upon
original issuance, will be issued in the form of a typewritten Series A Capital
Security Certificate or Certificates representing Book-Entry Series A Capital
Security Certificates, to be delivered to The Depository Trust Company, the
initial Clearing Agency, by, or on behalf of, the Trust. Such Series A Capital
Security Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Capital Securities Beneficial Owner will receive a
Definitive Series A Capital Security Certificate representing such Capital
Securities Beneficial Owner's interest in such Series A Capital Securities,
except as provided in Section 9.2. Unless and until Definitive Series A Capital
Security Certificates have been issued to Capital Securities Beneficial Owners
pursuant to Section 9.2:
(i) the provisions of this Section 7.7(a) shall be
in full force and effect;
(ii) the Securities Registrar and the Trustees
shall be entitled to deal with the Clearing Agency for
all purposes of this Declaration relating to the
Book-Entry Series A Capital Security Certificates
(including the payment of the Liquidation Amount of and
Distributions on the Series A Capital Securities
evidenced by Book-Entry Series A Capital Security
Certificates and the giving of instructions or directions
to Capital Securities Beneficial Owners of Series A
Capital Securities evidenced by Book-Entry Series A
Capital Security Certificates) as the sole Holder of
Series A Capital Securities evidenced by Book-Entry
Series A Capital Security Certificates and shall have no
obligations to the Capital Securities Beneficial Owners
thereof;
(iii) to the extent that the provisions of this
Section 7.7 conflict with any other provisions of this
Declaration, the provisions of this Section 7.7 shall
control; and
(iv) the rights of the Capital Securities
Beneficial Owners of the Book-Entry Series A Capital
Security Certificates shall be exercised only through
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the Clearing Agency and shall be limited to those
established by law and agreements between such Capital
Securities Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. Unless and until
Definitive Series A Capital Security Certificates are
issued pursuant to Section 9.2, the initial Clearing
Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments on
the Series A Capital Securities to such Clearing Agency
Participants.
(b) A Common Security Certificate representing the Common
Securities shall be issued to the Sponsor on each Closing Date in the form of a
definitive Common Security Certificate.
SECTION 7.8 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the
Property Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Property Trustee all money held by the Paying
Agent for the payment of liquidation amounts or Distributions, and will notify
the Property Trustee if there are insufficient funds for such purpose. While
any such insufficiency continues, the Property Trustee may require a Paying
Agent to pay all money held by it to the Property Trustee. The Trust at any
time may require a Paying Agent to pay all money held by it to the Property
Trustee and to account for any money disbursed by it. Upon payment over to the
Property Trustee, the Paying Agent (if other than the Trust or an Affiliate of
the Trust) shall have no further liability for the money. If the Trust or the
Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the
Holders all money held by it as Paying Agent.
SECTION 7.9 Replacement Securities.
If a Holder claims that a Security owned by it has been
lost, destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Series A Capital Securities to
the Property Trustee, an Administrative Trustee shall execute and the Property
Trustee shall authenticate and make available for delivery a replacement
Security if the Property Trustee's requirements are met. An indemnity bond must
be provided by the Holder which, in the judgment of the Property Trustee, is
sufficient to protect the Trustees, the Sponsor, the Trust or any
authenticating agent from any loss which any of them may suffer if a Security
is replaced. The Trust may charge such Holder for its expenses in replacing a
Security.
SECTION 7.10 Outstanding Series A Capital Securities.
The Series A Capital Securities outstanding at any time
are all the Series A Capital Securities authenticated by the Property Trustee
except for those canceled by it, those delivered to it for cancellation, and
those described in this Section as not outstanding.
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If a Series A Capital Security is replaced, paid or
purchased pursuant to Section 7.9 hereof, it ceases to be outstanding unless
the Property Trustee receives proof satisfactory to it that the replaced, paid
or purchased Series A Capital Security is held by a bona fide purchaser.
If Series A Capital Securities are considered paid in
accordance with the terms of this Declaration, they cease to be outstanding and
Distributions on them shall cease to accumulate.
A Series A Capital Security does not cease to be
outstanding because one of the Trust, the Sponsor or an Affiliate of the
Sponsor holds the Security.
SECTION 7.11 Series A Capital Securities in Treasury.
In determining whether the Holders of the required amount
of Securities have concurred in any direction, waiver or consent, Series A
Capital Securities owned by the Trust, the Sponsor or an Affiliate of the
Sponsor, as the case may be, shall be disregarded and deemed not to be
outstanding, except that for the purposes of determining whether the Property
Trustee shall be fully protected in relying on any such direction, waiver or
consent, only Securities which the Property Trustee actually knows are so owned
shall be so disregarded.
SECTION 7.12 Cancellation.
The Trust at any time may deliver Series A Capital
Securities to the Property Trustee for cancellation. The Registrar, Paying
Agent and Exchange Agent shall forward to the Property Trustee any Series A
Capital Securities surrendered to them for registration of transfer,
redemption, exchange or payment. The Property Trustee shall promptly cancel all
Series A Capital Securities surrendered for registration of transfer,
redemption, exchange, payment, replacement or cancellation and shall dispose of
canceled Series A Capital Securities in accordance with its customary
procedures unless the Trust otherwise directs. The Trust may not issue new
Series A Capital Securities to replace Series A Capital Securities that it has
paid or that have been delivered to the Property Trustee for cancellation or
that any Holder has exchanged.
SECTION 7.13 CUSIP Numbers.
The Trust in issuing the Series A Capital Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Property
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders of Series A Capital Securities; provided that, any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Series A Capital Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Series A Capital Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Sponsor will promptly notify the Property Trustee of any change in the
CUSIP numbers.
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ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or liquidation or its equivalent with respect
to the Sponsor; or the revocation of the Sponsor's
charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) following the distribution of a Like Amount
of the Series A Debentures to the Holders, provided that,
the Property Trustee has received written notice from the
Sponsor directing the Property Trustee to dissolve the
Trust (which direction is optional, and except as
otherwise expressly provided below, within the discretion
of the Sponsor), and provided, further, that such
direction and such distribution is conditioned on (a) the
receipt by the Sponsor of any and all required regulatory
approvals, and (b) the Sponsor's receipt and delivery to
the Administrative Trustees of an opinion of independent
tax counsel experienced in such matters to the effect
that the Holders of the Series A Capital Securities will
not recognize any gain or loss for United States federal
income tax purposes as a result of the dissolution of the
Trust and the distribution of Series A Debentures;
(iv) upon the entry of a decree of judicial
dissolution of the Trust by a court of competent
jurisdiction;
(v) when all of the Securities shall have been
called for redemption and the amounts necessary for
redemption thereof shall have been paid to the Holders in
accordance with the terms of the Securities;
(vi) upon the redemption or repayment of the
Series A Debentures or at such time as no Series A
Debentures are outstanding; or
(vii) the expiration of the term of the Trust
provided in Section 3.14.
(b) As soon as is practicable upon completion of winding
up of the Trust following the occurrence of an event referred to in Section
8.1(a) and the satisfaction of creditors of the Trust in accordance with
applicable law, the Administrative Trustees shall terminate the Trust by filing
a certificate of cancellation with the Secretary of State of the State of
Delaware in accordance with the Business Trust Act.
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(c) The provisions of Section 3.9 and Article X shall
survive the dissolution of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Declaration
and in the terms of the Securities. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Series A Capital
Securities may only be transferred, in whole or in part, in accordance with the
terms and conditions set forth in this Declaration. To the fullest extent
permitted by law, any transfer or purported transfer of any Security not made
in accordance with this Declaration shall be null and void.
(c) For so long as the Securities remain outstanding, the
Sponsor agrees (i) not to transfer ownership of the Common Securities of the
Trust, provided that any permitted successor of the Sponsor under the Indenture
may succeed to the Sponsor's ownership of the Common Securities, (ii) not to
cause, as Sponsor of the Trust, or to permit, as Holder of the Common
Securities, the dissolution, winding-up or liquidation of the Trust, except as
provided in this Declaration and (iii) to use its best efforts to cause the
Trust (a) to remain a business trust, except in connection with the
distribution of Series A Debentures to the Holders in liquidation of the Trust,
the redemption of all of the Securities, or certain mergers, consolidations or
amalgamations, each as permitted by this Declaration, and (b) not to be
classified as an association taxable as a corporation and to be classified as a
grantor trust for United States federal income tax purposes.
SECTION 9.2 Definitive Series A Capital Security Certificates
(a) If (i) the Sponsor advises the Trustees in writing
that the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Series A Capital Security Certificates,
and the Sponsor is unable to locate a qualified successor, (ii) the Sponsor at
its option advises the Trustees in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, Capital Securities Beneficial Owners representing
beneficial interests aggregating at least a majority of the Liquidation Amount
advise the Administrative Trustees in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interest
of the Capital Securities Beneficial Owners, then the Administrative Trustees
shall notify the other Trustees and the Clearing Agency, and the Clearing
Agency, in accordance with its customary rules and procedures, shall notify all
Clearing Agency Participants for whom it holds Series A Capital Securities of
the occurrence of any such event and of the availability of the Definitive
Series A Capital Security Certificates to Capital Securities Beneficial Owners
of such class or classes, as applicable, requesting the same. Upon
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surrender to the Administrative Trustees of the typewritten Series A Capital
Security Certificate or Certificates representing the Book-Entry Series A
Capital Security Certificates by the Clearing Agency, accompanied by
registration instructions, the Administrative Trustees, or any one of them,
shall execute the Definitive Series A Capital Security Certificates in
accordance with the instructions of the Clearing Agency or, if executed on
behalf of the Trust by facsimile, countersigned by a transfer agent or its
agent. Neither the Registrar nor the Trustees shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Series A Capital Security Certificates, the Trustees shall recognize the
Holders of the Definitive Series A Capital Security Certificates as Holders.
The Definitive Series A Capital Security Certificates shall be typewritten,
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees that meets the
requirements of any stock exchange or automated quotation system on which the
Series A Capital Securities are then listed or approved for trading, as
evidenced by the execution thereof by the Administrative Trustees or any one of
them.
(b) Obligations with Respect to Transfers and Exchanges
of Series A Capital Securities.
(i) To permit registrations of transfers and
exchanges, the Trust shall execute and the Property
Trustee shall authenticate Definitive Series A Capital
Securities and the Global Capital Security at the
Registrar's or co-registrar's request in accordance with
the terms of this Declaration.
(ii) Registrations of transfers or exchanges will
be effected without charge, but only upon payment (with
such indemnity as the Trust or the Sponsor may require)
in respect of any tax or other governmental charge that
may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be
required to register the transfer of or exchange of (a)
Series A Capital Securities during a period beginning at
the opening of business 15 days before the day of mailing
of a notice of redemption or any notice of selection of
Series A Capital Securities for redemption and ending at
the close of business on the day of such mailing or (b)
any Series A Capital Security so selected for redemption
in whole or in part, except the unredeemed portion of any
Series A Capital Security being redeemed in part.
(iv) Prior to the due presentation for registration
of transfer of any Series A Capital Security, the Trust,
the Property Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the Person in whose
name a Series A Capital Security is registered as the
absolute owner of such Series A Capital Security for the
purpose of receiving Distributions on such Series A
Capital Security and for all other purposes whatsoever,
and none of the Trust, the Property Trustee, the Paying
Agent, the Registrar or any co-registrar shall be affected
by notice to the contrary.
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(v) All Series A Capital Securities issued upon
any registration of transfer or exchange pursuant to the
terms of this Declaration shall evidence the same
security and shall be entitled to the same benefits under
this Declaration as the Series A Capital Securities
surrendered upon such registration of transfer or
exchange.
(c) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no
responsibility or obligation to any Capital Security
Beneficial Owner, a Participant in the Clearing Agency or
other Person with respect to the accuracy of the records
of the Clearing Agency or its nominee or of any
Participant thereof, with respect to any ownership
interest in the Series A Capital Securities or with
respect to the delivery to any Participant, beneficial
owner or other Person (other than the Clearing Agency) of
any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such
Series A Capital Securities. All notices and
communications to be given to the Holders and all
payments to be made to Holders under the Series A Capital
Securities shall be given or made only to or upon the
order of the registered Holders (which shall be the
Clearing Agency or its nominee in the case of the Global
Capital Security). The rights of Capital Security
Beneficial Owners shall be exercised only through the
Clearing Agency subject to the applicable rules and
procedures of the Clearing Agency. The Property Trustee
may conclusively rely and shall be fully protected in
relying upon information furnished by the Clearing Agency
or any agent thereof with respect to its Participants and
any Capital Security Beneficial Owners.
(ii) The Property Trustee and the Registrar shall
have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on
transfer imposed under this Declaration or under
applicable law with respect to any transfer of any
interest in any Series A Capital Security (including any
transfers between or among Clearing Agency Participants
or Capital Security Beneficial Owners) other than to
require delivery of such certificates and other
documentation or evidence as are expressly required by,
and to do so if and when expressly required by, the terms
of this Declaration, and to examine the same to determine
substantial compliance as to form with the express
requirements hereof.
SECTION 9.3 Temporary Securities.
(a) Until Definitive Capital Securities are ready for
delivery, the Trust may prepare and, in the case of the Capital Securities, the
Property Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of Definitive Series A Capital Securities,
but may have variations that the Trust considers appropriate for temporary
Securities. Without unreasonable delay, the Trust shall prepare and, in the
case of the Series A Capital
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Securities, the Property Trustee shall authenticate Definitive Capital
Securities in exchange for temporary Securities.
(b) The Global Capital Security deposited with the
Clearing Agency or with the Property Trustee as custodian for the Clearing
Agency shall be transferred to the beneficial owners thereof in the form of
Definitive Capital Securities only if such transfer complies with Section 9.2
and (i) the Clearing Agency notifies the Sponsor that it is unwilling or unable
to continue as Clearing Agency for such Global Capital Security or if at any
time such Clearing Agency ceases to be a "clearing agency" registered under the
Exchange Act, and, in each case, a clearing agency is not appointed by the
Sponsor within 90 days of receipt of such notice or of becoming aware of such
condition, (ii) a Default or an Event of Default has occurred and is continuing
or (iii) the Trust at its sole discretion elects to cause the issuance of
Definitive Capital Securities.
(c) Any Global Capital Security that is transferable to
the beneficial owners thereof in the form of Definitive Capital Securities
shall be surrendered by the Clearing Agency to the Property Trustee to be so
transferred, in whole or from time to time in part, without charge, and the
Property Trustee shall authenticate and make available for delivery, upon such
transfer of each portion of such Global Capital Security, an equal aggregate
liquidation amount of Securities of authorized denominations in the form of
Definitive Capital Securities. Any portion of the Global Capital Security
transferred pursuant to this Section shall be registered in such names as the
Clearing Agency shall direct.
(d) Subject to the provisions of Section 9.3(c), the
Holder of the Global Capital Security may grant proxies and otherwise authorize
any Person, including Participants and Persons that may hold interests through
Participants, to take any action which such Holder is entitled to take under
this Declaration or the Securities.
(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Capital Securities in
fully registered form without distribution coupons.
SECTION 9.4 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Security shall be registered on the books and records of the Trust as the sole
owner and Holder of such Security for purposes of receiving Distributions and
for all other purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Security on the
part of any Person, whether or not the Trust shall have actual or other notice
thereof.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Series A
Capital Security Holders is required to be given by a Trustee under this
Declaration, such Trustee shall give all such notices and communications
specified herein to be given to the Holder of the Global Capital Security
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to the Clearing Agency and shall have no notice obligations to the Capital
Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services
as securities depositary with respect to the Series A Capital Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Series A Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration,
the Securities Guarantees and the terms of the Securities, the Sponsor shall
not be:
(i) personally liable for the return of any
portion of the capital contributions (or any return
thereon) of the Holders which shall be made solely from
assets of the Trust; and
(ii) required to pay to the Trust or to any Holder
any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than in respect of the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act,
the Holders 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.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence (or in the case of the Property Trustee or the Delaware Trustee,
negligence) or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the
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Trust by any Person as to matters the Indemnified Person reasonably believes
are within such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders might
properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity (other than the duties imposed on the Property Trustee
under the Trust Indenture Act), are agreed by the parties hereto to replace
such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between any Covered Person and any Indemnified
Person, or
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the Trust
or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of
similar authority, the Indemnified Person shall be
entitled to consider such interests and factors as it
desires, including its own interests, and shall have no
duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other
Person; or
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(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such
express standard and shall not be subject to any other or
different standard imposed by this Declaration or by
applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person, against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such Company Indemnified Person shall have been adjudged to be liable to
the Trust unless and only to the extent that the Court of Chancery of Delaware
or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such Person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified
Person shall be successful on the merits or otherwise (including dismissal of
an action without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to the full extent permitted
by law, against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and
(ii) of this Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
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circumstances because he has met the applicable standard of conduct set forth
in paragraphs (i) and (ii). Such determination shall be made (1) by the
Administrative Trustees by a majority vote of a Quorum consisting of such
Administrative Trustees who were not parties to such action, suit or
proceeding, (2) if such a Quorum is not obtainable, or, even if obtainable, if
a Quorum of disinterested Administrative Trustees so directs, by independent
legal counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding referred
to in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the
Sponsor in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Sponsor as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by the Sponsor
if a determination is reasonably and promptly made (i) by the Administrative
Trustees by a majority vote of a Quorum of disinterested Administrative
Trustees, (ii) if such a Quorum is not obtainable, or, even if obtainable, if a
Quorum of disinterested Administrative Trustees so directs, by independent
legal counsel in a written opinion or (iii) by the Common Security Holder of
the Trust, that, based upon the facts known to the Administrative Trustees,
counsel or the Common Security Holder at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that the
Common Security Holder did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances where
the Administrative Trustees, independent legal counsel or Common Security
Holder reasonably determine that a Company Indemnified Person deliberately
breached his duty to the Trust or its Common or Series A Capital Security
Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Sponsor or
Series A Capital Security Holders of the Trust or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office. All rights to indemnification under this Section 10.4(a) shall be
deemed to be provided by a contract between the Sponsor and each Company
Indemnified Person who serves in such capacity at any time while this Section
10.4(a) is in effect. Any repeal or modification of this Section 10.4(a) shall
not affect any rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such liability
under the provisions of this Section 10.4(a).
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(viii) For purposes of this Section 10.4(a),
references to "the Trust" shall include, in addition to the resulting or
surviving entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person who is
or was a director, trustee, officer or employee of such constituent entity, or
is or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as to a Person
who has ceased to be a Company Indemnified Person and shall inure to the
benefit of the heirs, executors and administrators of such a Person.
(b) The Sponsor agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee
or the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or agents
of the Property Trustee or the Delaware Trustee (each of the Persons in (i)
through (iv), including the Property Trustee and the Delaware Trustee in their
respective individual capacities, being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, action, suit, claim or expense including
taxes (other than taxes based on the income of such Fiduciary Indemnified
Person) of any kind and nature whatsoever incurred without negligence or bad
faith on the part of such Fiduciary Indemnified Person, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending against or investigating any claim or liability in
connection with the exercise or performance of any of the powers or duties of
such Fiduciary Indemnified Person hereunder. The obligation to indemnify as set
forth in this Section 10.4(b) shall survive the resignation or removal of the
Property Trustee or the Delaware Trustee and the satisfaction and discharge of
this Declaration.
(c) The Sponsor agrees to pay the Property Trustee and
the Delaware Trustee, from time to time, such compensation for all services
rendered by the Property Trustee and the Delaware Trustee hereunder as may be
mutually agreed upon in writing by the Sponsor and the Property Trustee or the
Delaware Trustee, as the case may be, and, except as otherwise expressly
provided herein, to reimburse the Property Trustee and the Delaware Trustee
upon its or their request for all reasonable expenses (including legal fees and
expenses), disbursements and advances incurred or made by the Property Trustee
or the Delaware Trustee, as the case may be, in accordance with the provisions
of this Declaration, except any such expense, disbursement or advance as may be
attributable to its or their negligence or bad faith.
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SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and
the Property Trustee (subject to Section 5.3(c)) may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee, or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property 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 Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial
or other transaction with the Sponsor or any Affiliate of the Sponsor, or may
act as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders any annual United States federal
income tax information statements required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrative Trustees
shall endeavor to deliver all such information statements within 30 days after
the end of each Fiscal Year of the Trust.
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(c) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Administrative Trustees on behalf of the Trust with
any state or local taxing authority.
SECTION 11.3 Banking.
The Trust may maintain one or more bank accounts in the
name and for the sole benefit of the Trust; provided, however, that all
payments of funds in respect of the Series A Debentures held by the Property
Trustee shall be made directly to the Property Trustee Account and no other
funds of the Trust shall be deposited in the Property Trustee Account. The sole
signatories for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall designate the
signatories for the Property Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Administrative Trustees shall comply
with all withholding requirements under United States federal, state and local
law and under foreign law. The Trust shall request, and the Holders shall
provide to the Trust, such forms or certificates as are necessary to establish
an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Administrative Trustees shall cause to be filed required forms
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with respect to
the Holder to applicable jurisdictions. To the extent that the Trust is
required to withhold and pay over any amounts to any authority with respect to
Distributions or allocations to any Holder, the amount withheld shall be deemed
to be a Distribution in the amount of the withholding to the Holder. In the
event of any claim of excess withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld was
not withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration
(including Section 7 of Annex I hereto) or by any applicable terms of the
Securities, this Declaration may only be amended by a written instrument
approved and executed by:
(i) the Sponsor and the Administrative Trustees
(or, if there are more than two Administrative Trustees,
a majority of the Administrative Trustees);
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(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Property
Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware
Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Property Trustee shall have first received an
Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of
the Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obligations or
immunities of the Property Trustee, the Property Trustee
shall have first received:
(A) an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
and
(B) an Opinion of Counsel (who may be counsel to
the Sponsor or the Trust) that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities)
and that all conditions precedent to the execution
and delivery of such amendment have been satisfied;
provided, however, that the Property Trustee and the Delaware Trustee shall not
be required to sign any such amendment which affects its own rights, duties,
warranties or indemnification; and
(iii) to the extent the result of such amendment
would be to:
(A) cause the Trust to fail to continue not to be
classified as an association taxable as a
corporation or to be less likely to be classified as
a grantor trust, in each case for purposes of United
States federal income taxation;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee in contravention of
the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under
the Investment Company Act.
(c) At such time after the Trust has issued any
Securities that remain outstanding, any amendment that would adversely affect
the rights, privileges or preferences of any
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Holder (other than an amendment pursuant to (g)(ii) below) may be effected only
with such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 10.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders;
(e) Article Four shall not be amended without the consent
of the Holders of a Majority in Liquidation Amount of the Common Securities;
(f) The rights of the Holders of the Common Securities
under Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a Majority
in Liquidation Amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Declaration may
be amended without the consent of the Holders to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be inconsistent
with any other provision of this Declaration or to make
any other provisions with respect to matters or questions
arising under this Declaration which shall not be
inconsistent with the other provisions of the
Declaration; and
(ii) to modify, eliminate or add to any provisions
of the Declaration to such extent as shall be necessary
to ensure that the Trust will be classified for United
States federal income tax purposes as a grantor trust at
all times that any Securities are outstanding or to
ensure that the Trust will not be required to register as
an Investment Company under the Investment Company Act.
provided, however, that in the case of clause (i) above, such action shall not
adversely affect in any material respect the interests of the Holders, and any
such amendments of this Declaration shall become effective when notice thereof
is given to the Holders.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities
may be called at any time by the Administrative Trustees (or as provided in the
terms of the Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on
which the Series A Capital Securities are listed or admitted for trading. The
Administrative Trustees shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 10% in Liquidation Amount of such
class of Securities. Such direction shall be given by delivering to the
Administrative Trustees one or more notices in writing stating that the signing
Holders wish to call a meeting and indicating the general or specific purpose
for which the meeting is to be called. Any Holders calling a meeting shall
specify in writing the Capital Security or Common Security Certificates held by
the Holders exercising the right to call a meeting and only those Securities
specified shall be counted
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for purposes of determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms
of the Securities, the following provisions shall apply to meetings of Holders:
(i) notice of any such meeting shall be given to
all the Holders having a right to vote thereat at least
seven days and not more than 60 days before the date of
such meeting. Whenever a vote, consent or approval of the
Holders is permitted or required under this Declaration
or the rules of any stock exchange on which the Series A
Capital Securities are listed or admitted for trading,
such vote, consent or approval may be given at a meeting
of the Holders; any action that may be taken at a meeting
of the Holders may be taken without a meeting if a
consent in writing setting forth the action so taken is
signed by the Holders owning not less than the minimum
amount of Securities in liquidation amount that would be
necessary to authorize or take such action at a meeting
at which all Holders having a right to vote thereon were
present and voting; prompt notice of the taking of action
without a meeting shall be given to the Holders entitled
to vote who have not consented in writing; and the
Administrative Trustees may specify that any written
ballot submitted to the Security Holder for the purpose
of taking any action without a meeting shall be returned
to the Trust within the time specified by the
Administrative Trustees;
(ii) each Holder may authorize any Person to act
for it by proxy on all matters in which a Holder is
entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting; no
proxy shall be valid after the expiration of eleven
months from the date thereof unless otherwise provided in
the proxy; every proxy shall be revocable at the pleasure
of the Holder executing it; and, except as otherwise
provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating
to proxies, and judicial interpretations thereunder, as
if the Trust were a Delaware corporation and the Holders
were stockholders of a Delaware corporation;
(iii) each meeting of the Holders shall be
conducted by the Administrative Trustees or by such other
Person that the Administrative Trustees may designate;
and
(iv) unless the Business Trust Act, this
Declaration, the terms of the Securities, the Trust
Indenture Act or the listing rules of any stock exchange
on which the Series A Capital Securities are then listed
or trading, otherwise provides, the Administrative
Trustees, in their sole discretion, shall establish all
other provisions relating to meetings of Holders,
including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any
Holders, waiver of any such notice, action by consent
without a meeting, the
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establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Property Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Property Trustee's
acceptance of its appointment as Property Trustee that:
(a) the Property Trustee is a banking corporation, a
national banking association or a bank or trust company, duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to execute and deliver, and
to carry out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the
Property Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee; and this Declaration has
been duly executed and delivered by the Property Trustee and under Delaware law
(excluding any securities laws) 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
Declaration by the Property Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or
registration with or notice to, any federal or Delaware banking authority
governing the trust powers of the Property Trustee is required for the
execution, delivery or performance by the Property Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Delaware Trustee's
acceptance of its appointment as Delaware Trustee that:
(a) the Delaware Trustee is a banking corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with corporate power and
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authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration;
(b) the execution, delivery and performance by the
Delaware Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee; and this Declaration has
been duly executed and delivered by the Delaware Trustee and under Delaware law
(excluding any securities laws) 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' 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
Declaration by the Delaware Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Delaware Trustee; and
(d) no consent, approval or authorization of, or
registration with or notice to, any federal or Delaware banking authority
governing the trust powers of the Delaware Trustee is required for the
execution, delivery or performance by the Delaware Trustee of this Declaration;
and
(e) the Delaware Trustee is a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware, and is a Person
that satisfies for the Trust Section 3807(a) of the Business Trust Act.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, overnight courier service or
confirmed telecopy, as follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Property Trustee, the Delaware Trustee
and the Holders):
Hamilton Capital Trust I
c/o Hamilton Bancorp Inc.
3750 N.W. 87th Avenue
Miami, Florida 33178
Attn.: John M.R. Jacobs
Telephone: (305) 717-5620
Telecopier: (305) 717-5631
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(b) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as the Delaware Trustee may give
notice of to the Property Trustee and the Holders):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn.: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopier: (302) 651-8882
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the
Property Trustee may give notice of to the Delaware Trustee and the Holders):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn.: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopier: (302) 651-8882
(d) if given to the Holder of the Common Securities, at
the mailing address of the Sponsor set forth below (or such other address as
the Holder of the Common Securities may give notice to the Trust):
Hamilton Bancorp Inc.
3750 N.W. 87th Avenue
Miami, Florida 33178
Attn.: John M.R. Jacobs
Telephone: (305) 717-5620
Telecopier: (305) 717-5631
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
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SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to conflict of laws principles thereof.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust
be classified for United States federal income tax purposes as a grantor trust
and that no election be made to have the Trust classified as an association
taxable as a corporation for United States federal income tax purposes. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether or not so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application
of such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to Persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of
the signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one or more of such counterpart signature
pages. All of such counterpart signature pages shall be read as though one, and
they shall have the same force and effect as though all of the signers had
signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above written.
-----------------------------------
John M.R. Jacobs
as Administrative Trustee
-----------------------------------
Marilyn Alvarado
as Administrative Trustee
-----------------------------------
Lynn Hernandez
as Administrative Trustee
WILMINGTON TRUST COMPANY
as Delaware Trustee
By:
--------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY
as Property Trustee
By:
--------------------------------
Name:
Title:
HAMILTON BANCORP INC.,
as Sponsor and Debenture Issuer
By:
--------------------------------
Name:
Title:
<PAGE> 67
ANNEX I
TERMS OF
[___%] CAPITAL SECURITIES, SERIES A
[___%] COMMON SECURITIES, SERIES A
Pursuant to Section 7.1 of the Amended and Restated
Declaration, dated as of December [__], 1998 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the
Registration Statement referred to below):
1. Designation and Number.
(a) Series A Capital Securities. 1,265,000 Series A
Capital Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of Twelve Million Six Hundred Fifty Thousand
Dollars ($12,650,000) and with a liquidation amount with respect to the assets
of the Trust of Ten Dollars ($10) (the "Liquidation Amount") per security, are
hereby designated for the purposes of identification only as "___% Capital
Securities, Series A" (the "Series A Capital Securities"). The certificates
evidencing the Series A Capital Securities shall be substantially in the form of
Exhibit A-1 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any exchange or quotation system on or in which the
Series A Capital Securities are listed, traded or quoted.
(b) Common Securities. 39,125 Series A Common Securities
of the Trust with an aggregate liquidation amount with respect to the assets of
the Trust of Three Hundred Ninety-One Thousand Two Hundred Fifty Dollars
($391,250) and a Liquidation Amount with respect to the assets of the Trust of
Ten Dollars ($10) per security, are hereby designated for the purposes of
identification only as "[___]% Common Securities, Series A" (the "Common
Securities"). The certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
2. Distributions.
(a) Distributions on each Security will be payable at a
fixed rate per annum of [___]% (the "Coupon Rate") of the liquidation amount of
$10 per Security, such rate being the rate of interest payable on the Series A
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarterly period will bear additional Distributions thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions," as used herein, includes distributions of any
and all such interest, if any, payable unless otherwise stated. A Distribution
is payable only to the extent that payments are made in respect of the Series A
Debentures held by the Property Trustee and to the extent the Property Trustee
has funds legally available therefor.
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(b) Distributions on the Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or, if no Distributions have been paid, from December [___], 1998 and will be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing March 31, 1999 (each, a "Distribution Date"), except
as otherwise described below. Distributions will be computed on the basis of a
360-day year consisting of twelve 30-day months. As long as no Event of Default
has occurred and is continuing under the Indenture, the Debenture Issuer has
the right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Series A
Debentures for a period not exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such period (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Series A Debentures, provided that no Extension Period shall end
on a date other than an Interest Payment Date for the Series A Debentures or
extend beyond the Maturity Date of the Series A Debentures. As a consequence of
such deferral, Distributions will also be deferred. Notwithstanding such
deferral, Distributions will continue to accumulate with additional
Distributions thereon (to the extent permitted by applicable law but not at a
rate greater than the rate at which interest is then accruing on the Series A
Debentures) at the Coupon Rate compounded quarterly during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period, provided that such extension does not cause such Extension
Period, together with all such previous and further extensions within such
Extension Period, to exceed 20 consecutive quarterly periods, including the
first quarterly period during such Extension Period, end on a date other than
an Interest Payment Date for the Series A Debentures or extend beyond the
Maturity Date of the Series A Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debenture Issuer may
commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust on the
close of business one Business Day prior to the relevant Distribution Date for
Capital Securities in book-entry form and the 15th day of the month in which
the relevant Distribution Date occurs for Capital Securities not in book-entry
form, which Distribution Dates correspond to the Interest Payment Dates for the
Series A Debentures. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Capital
Securities will be made as described in the Prospectus, dated December [__],
1998 of the Debenture Issuer and the Trust relating to the Securities and the
Series A Debentures. The relevant record dates for the Common Securities shall
be the same as the record dates for the Capital Securities. Distributions
payable on any Securities that are not punctually paid on any Distribution
Date, as a result of the Debenture Issuer having failed to make a payment under
the Series A Debentures, will cease to be payable to the Holder on the relevant
record date, and such defaulted Distribution will instead be payable to the
Person in whose name such Securities are registered on the special record date
or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the 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 (and without any interest or other
payment in respect of any such delay), unless it would thereby fall in the next
calendar year, in which event such date will be the immediately preceding
Business Day with the same force and effect as if made on such date.
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(d) Payments of Distributions (including Additional
Amounts, if applicable) in respect of the Series A 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 Series A Capital
Securities are held by a Clearing Agency, such Distributions shall be made to
the Clearing Agency in immediately available funds, which shall credit the
relevant Persons' accounts at such Clearing Agency on the applicable
Distribution Dates. Payments in respect of the Common Securities shall be made
in such manner as shall be mutually agreed in writing between the Property
Trustee and the Common Security Holder.
(e) In the event that there is any money or other
property held by or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein) among the Holders.
3. Liquidation Distribution Upon Dissolution.
In the event of any dissolution of the Trust, the Trust shall
be liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing to the Holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, a Like Amount (as defined
below) of the Series A Debentures, unless such distribution is determined by
the Property Trustee not to be practicable, in which event such Holders will be
entitled to receive out of the assets of the Trust legally available for
distribution to Holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to the aggregate of the
liquidation amount of $10 per Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal
amount of Series A Debentures to be paid in accordance with their terms and
(ii) with respect to a distribution of Series A Debentures upon the liquidation
of the Trust, Series A Debentures having a principal amount equal to the
Liquidation Amount of the Securities of the Holder to whom such Series A
Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets legally
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Securities shall be paid on a Pro
Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Series A Debentures in
whole or in part, at maturity or otherwise (either at the option of the
Debenture Issuer or pursuant to a Special Event, as described below), the
proceeds from such repayment shall be simultaneously applied by the Property
Trustee (subject to the Property Trustee having received written notice no
later than 45 days prior to such repayment) to redeem a Like Amount of the
Securities at a redemption price equal to 100% of the principal of and accrued
and unpaid interest on the Debentures being so paid or
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redeemed (the "Redemption Price"). Holders will be given not less than 30 nor
more than 60 days prior written notice of such redemption.
(b) The Debenture Issuer shall have the right (subject to
the conditions in the Indenture) to elect to redeem the Series A Debentures, in
whole or in part, at any time on or after December __, 2008 (the "Initial
Optional Redemption Date"), and, simultaneous with such redemption, to cause a
Like Amount of the Securities to be redeemed by the Trust at the Redemption
Price on a Pro Rata basis.
(i) In the case of an optional redemption, if
fewer than all the outstanding Securities are to be so redeemed, the Common
Securities and the Capital Securities shall be redeemed Pro Rata, and the
Capital Securities to be redeemed will be determined as described in Section
4(f)(ii) below. Upon the entry of an order for the dissolution of the Trust by
a court of competent jurisdiction, the Series A Debentures thereafter will be
subject to optional redemption, in whole, but not in part, on or after the
Initial Optional Redemption Date.
(c) If at any time an Investment Company Event, a
Regulatory Capital Event or a Tax Event (each as defined below, and each a
"Special Event") occurs, the Debenture Issuer shall have the right (subject to
the conditions set forth in the Indenture) at any time prior to the Initial
Optional Redemption Date, to redeem the Series A Debentures in whole, but not
in part, within the 90 days following the occurrence of such Special Event (the
"90 Day Period"), and, simultaneous with such redemption, to cause a Like
Amount of the Securities to be redeemed by the Trust at the Redemption Price on
a Pro Rata basis.
"Investment Company Event" shall mean the receipt by the
Debenture Issuer and the Trust of an opinion of independent securities counsel
experienced in such matters to the effect that as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any rules, guidelines or
policies of any applicable regulatory authority for the Debenture Issuer or (b)
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of original
issuance of the Securities, the Trust is, or within 90 days of the date of such
opinion will be, considered an Investment Company that is required to be
registered under the Investment Company Act.
"Regulatory Capital Event" shall mean the receipt by the
Debenture Issuer and the Trust of an opinion of independent bank regulatory
counsel experienced in such matters to the effect that as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any rules,
guidelines or policies of an applicable regulatory authority for the Debenture
Issuer or (b) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of original issuance of the Securities, the Capital Securities do not
constitute, or within 90 days of the date of such opinion will not constitute,
Tier 1 Capital (or its then equivalent if the Sponsor were subject to such
capital requirement); provided, however, that the distribution of the Series A
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Debentures in connection with the liquidation of the Trust by the Debenture
Issuer shall not in and of itself constitute a Regulatory Capital Event.
"Tax Event" shall occur upon receipt by the Debenture Issuer
and the Trust of an opinion of independent tax 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 (b) any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is
announced on or after the date of original issuance of the Securities, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Series A Debentures, (ii) the
interest payable by the Debenture Issuer on the Series A Debentures is not, or
within 90 days of the date of such opinion will not be, deductible by the
Debenture Issuer, in whole or in part, for United States federal income tax
purposes, or (iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
(d) On and from the date fixed by the Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee), as the Holder of the
Capital Securities, will receive a registered global certificate or
certificates representing the Series A Debentures to be delivered upon such
distribution, and (iii) any certificates representing Securities not held by
the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) will be deemed to represent beneficial interests in a Like Amount of
Series A Debentures until such certificates are presented to the Debenture
Issuer or its agent for transfer or reissue.
(e) The Trust may not redeem fewer than all the
outstanding Securities unless all accumulated and unpaid Distributions have
been paid on all Securities for all quarterly Distribution periods terminating
on or before the date of redemption.
(f) The procedure with respect to redemptions or
distributions of Securities shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Series A Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Series A Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this Section 4(f)(i), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders. Each Redemption/Distribution
Notice shall be addressed to the Holders at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
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<PAGE> 72
respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the particular Securities to be redeemed shall be selected
on a Pro Rata basis or by such other method (including, without limitation, by
lot) deemed fair and appropriate by the Property Trustee (based upon
Liquidation Amounts) not more than 60 nor less than 30 days prior to the date
fixed for redemption from the outstanding Securities not previously called for
redemption; provided, however, that any such redemption may be made on the
basis of the aggregate Liquidation Amount of Securities held by each Holder
thereof and may be made by making such adjustments as the Trust deems fair and
appropriate in order that fractional Securities shall not thereafter remain
outstanding. With respect to Capital Securities registered in the name of and
held of record by the Clearing Agency or its nominee (or any successor Clearing
Agency or its nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to the Clearing Agency and disbursed by such Clearing
Agency in accordance with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice (which notice will be irrevocable), then (A)
with respect to Capital Securities issued in book-entry form, by 12:00 noon,
New York City time, on the redemption date, provided that the Debenture Issuer
has paid the Property Trustee a sufficient amount of cash in connection with
the related redemption or maturity of the Series A Debentures by 10:00 a.m.,
New York City time, on the Maturity Date or the date of redemption, as the case
requires, the Property Trustee will deposit irrevocably with the Clearing
Agency or its nominee (or successor Clearing Agency or its nominee) immediately
available funds sufficient to pay the applicable Redemption Price with respect
to such Capital Securities and will give the Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the relevant Clearing
Agency Participants, and (B) with respect to Capital Securities issued in
certificated form and Common Securities, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Series A Debentures, the Property Trustee
will irrevocably deposit with the paying agent for the Capital Securities (if
other than the Property Trustee) funds sufficient to pay the applicable
Redemption Price to the Holders by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the redemption date,
and provided, further, that any such payment shall become due only upon
surrender by the Holder of the related certificated Capital Securities. If a
Redemption/ Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on the
date of such deposit, or on the redemption date, as applicable, Distributions
will cease to accumulate on the Securities so called for redemption and all
rights of Holders so called for redemption will cease, except the right of the
Holders of such Securities to receive the Redemption Price, but without
interest on such Redemption Price, and such Securities shall cease to be
outstanding.
(iv) Payment of accumulated and unpaid Distributions on the
Redemption Date of the Securities will be subject to the rights of Holders at
the close of business on a regular record date in respect of a Distribution
Date occurring on or prior to such Redemption Date.
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<PAGE> 73
Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of (i) any
Securities beginning at the opening of business 15 days before the day of
mailing of a notice of redemption or any notice of selection of Securities for
redemption or (ii) any Securities selected for redemption except the unredeemed
portion of any Security being redeemed. If any date fixed for redemption of
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment with respect to any such delay), unless it
would thereby fall in the next calender year, in which event such date will be
the immediately preceding Business Day with the same force and effect as if made
on such date. If payment of the Redemption Price with respect to any Securities
is improperly withheld or refused and not paid either by the Property Trustee or
by the Sponsor as guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accumulate from the original
redemption date to the actual date of payment, in which case the actual payment
date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(v) Redemption/Distribution Notices shall be sent by the Property
Trustee on behalf of the Trust to (A) with respect to Capital Securities issued
in book-entry form, the Clearing Agency or its nominee (or any successor
Clearing Agency or its nominee), (B) with respect to Capital Securities issued
in certificated form, to the Holders thereof, and (C) with respect to the
Common Securities, to the Holders thereof.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws and banking laws),
the Sponsor or any of its subsidiaries may at any time and from time to time
purchase outstanding Capital Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b), 6(b) and 7
and as otherwise required by law and the Declaration, the Holders of the
Capital Securities will have no voting rights.
(b) So long as any Series A Debentures are held by the
Property Trustee, the Trustees shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture Trustee
or executing any trust or power conferred on such Debenture Trustee with
respect to the Series A Debentures, (ii) waive any past default that is
waivable under Section 5.07 of the Indenture, (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of the principal
of the Series A Debentures or (iv) consent to any amendment, modification or
termination of the Indenture or the Series A Debentures, where such consent
shall be required, without, in each case, obtaining the prior approval of the
Holders of a Majority in Liquidation Amount of all outstanding Capital
Securities; provided, however, that where a consent under the Indenture would
require the consent of each holder of Series A Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each Holder of the Capital Securities. The Trustees shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Capital Securities except by subsequent vote of such Holders. The Property
Trustee shall notify each Holder of Capital Securities of any notice of default
with respect to the Series A Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Trustees shall
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<PAGE> 74
obtain an opinion of counsel experienced in such matters to the effect that the
Trust will continue not to be classified as an association taxable as a
corporation or be less likely to be classified as a grantor trust, in each case
for United States federal income tax purposes, after taking any such action
into account.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or interest on the Series A Debentures on the due
date (or, in the case of redemption, on the redemption date), then a Holder of
Capital Securities may institute a proceeding directly against the Debenture
Issuer for enforcement of payment to such Holder of the principal of or
interest on a Like Amount of Series A Debentures (a "Direct Action") on or
after the respective due date specified in the Series A Debentures. In
connection with such Direct Action, the Common Securities Holder will be
subordinated to the rights of the Holders of Capital Securities to the extent
of any payment made by the Debenture Issuer to such Holder of Capital
Securities in such Direct Action. Except as provided in the second preceding
sentence, and, except as set forth in the first sentence of Section 3.8(e) of
the Declaration, the Holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Series A Debentures.
Any approval or direction of Holders of Capital Securities
may be given at a separate meeting of Holders of Capital Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
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 to be
mailed to each Holder of record of Capital Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consent.
No vote or consent of the Holders of the Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or to
distribute the Series A Debentures in accordance with the Declaration and the
terms of the Securities.
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 Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), 6(c) and 7 or
as otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless a Debenture Event of Default shall have
occurred and be continuing, any Trustee may be removed at any time by the
Holder of the Common Securities. If a Debenture Event of Default has occurred
and is continuing, the Property Trustee and the Delaware Trustee may
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<PAGE> 75
be removed at such time by the Holders of a Majority in Liquidation Amount of
the outstanding Capital Securities. In no event will the Holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Sponsor as the Holder of the Common Securities. No resignation or removal of a
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.
(c) So long as any Series A Debentures are held by the
Property Trustee, the Trustees shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture Trustee,
or executing any trust or power conferred on such Debenture Trustee with
respect to the Series A Debentures, (ii) waive any past default that is
waivable under Section 5.07 of the Indenture, (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of the principal
of the Series A Debentures or (iv) consent to any amendment, modification or
termination of the Indenture or the Series A Debentures, where such consent
shall be required, without, in each case, obtaining the prior approval of the
Holders of a Majority in Liquidation Amount of all outstanding Common
Securities; provided, however, that where a consent under the Indenture would
require the consent of each holder of Series A Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each Holder of the Common Securities. The Trustees shall not revoke any
action previously authorized or approved by a vote of the Holders of the Common
Securities except by subsequent vote of such Holders. The Property Trustee
shall notify each Holder of Common Securities of any notice of default with
respect to the Series A Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Common Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will continue not to be classified
as an association taxable as a corporation or to be less likely to be
classified as a grantor trust, in each case for United States federal income
tax purposes, after taking any such action into account.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or interest on the Series A Debentures on the due
date (or in the case of redemption, on the redemption date), then a Holder of
Common Securities may institute a Direct Action directly against the Debenture
Issuer for enforcement of payment to such Holder of the principal of or
interest on a Like Amount of Series A Debentures on or after the respective due
date specified in the Series A Debentures. In connection with such Direct
Action, the rights of the Common Securities Holder will be subordinated to the
rights of the Holders of Capital Securities in respect of any payment from the
Debenture Issuer in such Direct Action. Except as provided in the second
preceding sentence, the Holders of Common Securities will not be able to
exercise directly any other remedy available to the holders of the Series A
Debentures.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to
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<PAGE> 76
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Series A Debentures in accordance with the Declaration and the
terms of the Securities.
7. Amendments to Declaration.
In addition to the requirements set forth in Section 12.1 of
the Declaration, the Declaration may be amended from time to time by the
Sponsor, the Property Trustee and the Administrative Trustees without the
consent of the Holders (i) to cure any ambiguity, correct or supplement any
provisions in the Declaration that may be inconsistent with any other
provisions, or to make any other provisions with respect to matters or
questions arising under the Declaration which shall not be inconsistent with
the other provisions of the Declaration or (ii) to modify, eliminate or add to
any provisions of the Declaration to such extent as shall be necessary to
ensure that the Trust will not be classified as an association taxable as a
corporation and will not be less likely to be classified as a grantor trust, in
each case for United States federal income tax purposes, at all times that any
Securities are outstanding or to ensure that the Trust will not be required to
register as an Investment Company under the Investment Company Act; provided,
however, that in the case of an amendment pursuant to clause (i) above, such
action shall not adversely affect in any material respect the interests of any
Holder, and any such amendments of the Declaration shall become effective when
notice thereof is given to the Holders. The Declaration may also be amended by
the Trustees and the Sponsor with (i) the consent of Holders representing a
Majority in Liquidation Amount of all outstanding Securities, and (ii) receipt
by the Trustees of an Opinion of Counsel to the effect that such amendment or
the exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as not an association taxable as a
corporation or as a grantor trust for United States federal income tax purposes
or the Trust's exemption from status as an Investment Company under the
Investment Company Act; provided, however, that, without the consent of each
Holder of Trust Securities, the Declaration may not be amended to (i) change
the amount or timing of any Distribution on, or the payment required to be made
in respect of, the Trust Securities as of a specified date or (ii) restrict the
right of a Holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder according to the aggregate liquidation amount of the Securities held by
such Holder in relation to the aggregate liquidation amount of all Securities
outstanding unless, in relation to a payment, an Event of Default under the
Declaration has occurred and is continuing, in which case any funds available
to make such payment shall be paid first to each Holder of the Capital
Securities pro rata according to the aggregate liquidation amount of Capital
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<PAGE> 77
Securities held by such Holder relative to the aggregate liquidation amount of
all Capital Securities outstanding and then, only after satisfaction of all
amounts owed to the Holders of the Capital Securities, to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by such Holder relative to the aggregate liquidation amount of
all Common Securities outstanding.
9. Ranking.
The Capital Securities rank pari passu with the Common
Securities and payment thereon shall be made Pro Rata with the Common
Securities, except that, if an Event of Default under the Declaration occurs
and is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the Holders of the Capital Securities shall be paid in full
the Distributions, Redemption Price, Liquidation Distribution and any other
payments to which they are entitled at such time.
10. Acceptance of Capital Securities Guarantee, Common Securities
Guarantee. Indenture and Series A Debentures.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee, the Common Securities Guarantee, the Indenture and the Series A
Debentures, as applicable, including the subordination provisions therein.
11. No Preemptive Rights.
Neither the issuance of Capital Securities nor the issuance
of Common Securities is subject to preemptive or other similar rights. The
Holders shall have no preemptive or similar rights to subscribe for any
additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee, as applicable,
and the Indenture (including any supplemental indenture) to a Holder without
charge upon written request to the Trust at its principal place of business.
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<PAGE> 78
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY,
INSERT: THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION, AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE CLEARING AGENCY TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE CLEARING AGENCY AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
A1-1
<PAGE> 79
Certificate Number: [_______________________] Aggregate Liquidation
Amount: $[____________________]
CUSIP Number:[____________________]
Certificate Evidencing Capital Securities
of
Hamilton Capital Trust I
[____]% Capital Securities, Series A
(liquidation amount $10 per Capital Security)
Hamilton Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
[_________________] (the "Holder") is the registered owner of [$[_________] in
aggregate liquidation amount of Series A Capital Securities of the Trust]1 [the
aggregate liquidation amount of Series A Capital Securities of the Trust
specified in Schedule A hereto]2 representing undivided preferred beneficial
interests in the assets of the Trust designated the [________]% Capital
Securities, Series A (liquidation amount $10 per Capital Security) (the "Series
A Capital Securities"). The Series A Capital Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Series A Capital Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of the Trust, dated as of December
[______________], 1998, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Series A Capital
Securities as set forth in Annex I to the Declaration. Capitalized terms used
but not defined herein shall have the meaning given them in the Declaration.
The Sponsor will provide a copy of the Declaration, the Series A Capital
Securities Guarantee and the Indenture (including any supplemental indenture)
to a Holder without charge upon written request to the Trust at its principal
place of business.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Series A Capital Securities Guarantee to the extent provided therein.
By acceptance hereof, the Holder agrees, for United States
federal income tax purposes, to treat the Series A Debentures as indebtedness
and the Capital Securities as evidence of indirect beneficial ownership in the
Series A Debentures.
- ----------------------------
(1) Insert in Definitive Capital Securities only.
(2) Insert in Global Capital Securities only.
A1-2
<PAGE> 80
IN WITNESS WHEREOF, the Trust has executed this certificate
this [_______] day of [_______________ ____].
HAMILTON CAPITAL TRUST I
By:
-----------------------------------
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the [_______]% Capital Securities, Series A of Hamilton
Capital Trust I referred to in the within-mentioned Declaration.
Dated: ____________________, ______
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Property Trustee
By:
------------------------------------
Authorized Signatory
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<PAGE> 81
[FORM OF REVERSE OF SECURITY]
Distributions on each Capital Security will be payable at a fixed rate
per annum of [___]% (the "Coupon Rate") of the liquidation amount of $10 per
Series A Capital Security, such rate being the rate of interest payable on the
Series A Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarterly period will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions," as used herein, includes such cash
distributions and any and all such interest, if any, payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Series A Debentures held by the Property Trustee and to the
extent the Property Trustee has funds legally available therefor.
Distributions on the Series A Capital Securities will be
cumulative, will accumulate from the most recent date to which Distributions
have been paid or, if no Distributions have been paid, from December [___],
1998 and will be payable quarterly in arrears, on March 31, June 30, September
30 and December 31 of each year, commencing March 31, 1999, except as otherwise
described below. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months. As long as no Event of Default has occurred
and is continuing under the Indenture, the Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period at any time and from time to time on the Series A Debentures for a
period not exceeding 20 consecutive calendar quarterly periods, including the
first such quarterly period during such extension period (each an "Extension
Period"), provided that no Extension Period shall end on a date other than an
Interest Payment Date for the Series A Debentures or extend beyond the Maturity
Date of the Series A Debentures. As a consequence of such deferral,
Distributions will also be deferred. Notwithstanding such deferral, quarterly
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Series A Debentures) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any
Extension Period, the Debenture Issuer may further defer payments of interest
by further extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions within such
Extension Period, may not (i) exceed 20 consecutive quarterly periods,
including the first quarterly period during such Extension Period, (ii) end on
a date other than an Interest Payment Date for the Series A Debentures or (iii)
extend beyond the Maturity Date of the Series A Debentures. Payments of
accumulated Distributions will be payable to Holders as they appear on the
books and records of the Trust on the record date immediately preceding the end
of the Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
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<PAGE> 82
Subject to receipt by the Sponsor of any and all required
regulatory approvals and to certain other conditions set forth in the
Declaration and the Indenture, the Property Trustee may, at the direction of
the Sponsor, at any time dissolve the Trust and, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, cause the
Series A Debentures to be distributed to the Holders of the Securities in
liquidation of the Trust or, simultaneously with any redemption of the Series A
Debentures, cause a Like Amount of the Securities to be redeemed by the Trust.
The Series A Capital Securities shall be redeemable as
provided in the Declaration.
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<PAGE> 83
--------------
ASSIGNMENT
--------------
FOR VALUE RECEIVED, the undersigned hereby assigns and transfers this Capital
Security Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee:
----------------------------------------------------------
- ---------------------
Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
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<PAGE> 84
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH HAMILTON BANCORP
INC. (THE "CORPORATION") OR ANY "AFFILIATE" OF THE CORPORATION WAS THE OWNER OF
THIS COMMON SECURITY (OR ANY PREDECESSOR OF THIS COMMON SECURITY) ONLY (A) TO
THE CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (C) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
ACT, SUBJECT TO THE RIGHT OF HAMILTON CAPITAL TRUST I (THE "TRUST") AND THE
CORPORATION PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE
(D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND TO REQUIRE THAT THE
TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE. SUBSTANTIALLY TO
THE EFFECT THAT SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS COMMON SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
A2-1
<PAGE> 85
Certificate Evidencing Common Securities
of
Hamilton Capital Trust I
[____]%Common Securities, Series A
(liquidation amount $10 per Common Security)
Hamilton Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Hamilton Bancorp Inc. (the "Holder") is the registered owner of [__________]
Series A Common Securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the [____]% Common Securities,
Series A (liquidation amount $10 per Common Security) (the "Common Securities").
Subject to the terms of the Declaration (as defined below), the Common
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this Certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of the Trust dated as of
December [___], 1998, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used but not
defined herein shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture (including any supplemental indenture) to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.
By acceptance hereof, the Holder agrees to treat, for United
States federal income tax purposes, the Series A Debentures as indebtedness and
the Common Securities as evidence of indirect beneficial ownership in the
Series A Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this [__] day of [_____________] 1998.
HAMILTON CAPITAL TRUST I
By:
-------------------------------------
Name:
Administrative Trustee
A2-2
<PAGE> 86
[FORM OF REVERSE OF SECURITY]
Distributions on each Common Security will be payable at a fixed rate
per annum of [___]% (the "Coupon Rate") of the liquidation amount of $10 per
Common Security, such rate being the rate of interest payable on the Series A
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarterly period will bear interest thereon compounded quarterly
at the Coupon Rate (to the extent permitted by applicable law). The term
"Distributions," as used herein, includes such cash distributions and any and
all such interest payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Series A Debentures
held by the Property Trustee and to the extent the Property Trustee has funds
legally available therefor.
Distributions on the Common Securities will be cumulative, will accrue
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from December [___], 1998 and will be payable
quarterly in arrears, on March 31, June 30, September 30 and December 31 of
each year, commencing March 31, 1999, except as otherwise described below.
Distributions will be computed on the basis of a 360-day year with twelve
months of 30 days each. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment
period at any time and from time to time on the Series A Debentures for a
period not exceeding 20 consecutive calendar quarterly periods, including the
first such quarterly period during such extension period (each an "Extension
Period"), provided that no Extension Period shall end on a date other than an
Interest Payment Date for the Series A Debentures or extend beyond the Maturity
Date of the Series A Debentures. As a consequence of such deferral,
Distributions will also be deferred. Notwithstanding such deferral, quarterly
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Series A Debentures) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any
Extension Period, the Debenture Issuer may further defer payments of interest
by further extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions within such
Extension Period, may not (i) exceed 20 consecutive quarterly periods,
including the first quarterly period during such Extension Period, (ii) end on
a date other than an Interest Payment Date for the Series A Debentures or (iii)
extend beyond the Maturity Date of the Series A Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and
records of the Trust on the record date immediately preceding the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period, subject to the above requirements.
Subject to the receipt by the Sponsor of any and all required
regulatory approvals and to certain other conditions set forth in the
Declaration and the Indenture, the Property Trustee may, at the direction of
the Sponsor, at any time dissolve the Trust and cause the Series A Debentures
to be distributed to the Holders of the Securities in liquidation of the Trust
or, simultaneously with any redemption of the Series A Debentures, cause a Like
Amount of the Securities to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the
Declaration.
Under certain circumstances, the rights of the holders of the Common
Securities shall be subordinate to the rights of the holders of the Capital
Securities, as provided in the Declaration.
A2-3
<PAGE> 1
EXHIBIT 4.4
FORM OF SERIES A SUBORDINATED DEBENTURE CERTIFICATE
(FORM OF FACE OF SECURITY)
[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE
OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF
A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE
OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON 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 ANY PERSON IS WRONGFUL IN AS MUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
1
<PAGE> 2
HAMILTON BANCORP INC.
CUSIP No.: [_____________]
$[_________________]
Certificate No. [__]
[___]% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE December [__], 2028 Series A
Hamilton Bancorp Inc., a Florida corporation (the "Corporation," 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 December [__], 2028 (the
"Maturity Date"), unless previously prepaid, and to pay interest on the
outstanding principal amount hereof from December [__], 1998, or from the most
recent interest payment date (each such date, an "Interest Payment Date") to
which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein) in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing March 31, 1999 at the rate of [___]% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment
of interest at the same rate per annum compounded quarterly ("Compounded
Interest"). The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year consisting of twelve 30-day months.
In the event that any date on which the principal of or interest on this
Security is payable is not a Business Day (as defined in the Indenture), then
the payment payable on such date will be made on the next succeeding day that
is a Business Day, except that if such next succeeding Business Day falls in
the next succeeding calendar year such payment shall be made on the immediately
preceding Business Day (and without any interest or other payment in respect of
any such delay), with the same force and effect as if made on such date.
Pursuant to the Indenture, in certain circumstances the Corporation will be
required to pay Additional Sums (as defined in the Indenture) with respect to
this Security.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of
business on the regular record date for such interest installment, which shall
be one Business Day prior to the relevant Interest Payment Date for Global
Securities and the 15th day of the month in which the relevant Interest Payment
Date falls for Definitive Securities. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
holders on such regular record date and may be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on a special record date to be fixed by the Debenture Trustee
for the payment of such defaulted interest, notice whereof shall be given to
the holders of Securities not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities
2
<PAGE> 3
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
The principal of and interest (including Compounded Interest and
Additional Sums, if any) on this Security shall be payable at the office or
agency of the Debenture Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Corporation by (i) check mailed to
the holder at such address as shall appear in the Security Register or (ii)
transfer to an account maintained by the Person entitled thereto, provided that
proper written transfer instructions have been received by the relevant record
date. Notwithstanding the foregoing, so long as the holder of this Security is
the Property Trustee of Hamilton Capital Trust I, the payment of the principal
of and interest (including Compounded Interest and Additional Sums, if any) on
this Security will be made at such place and to such account as may be
designated by such Property Trustee.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Debenture Trustee on his or her
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Debenture Trustee
his or her attorney-in-fact for any and all such purposes. Each holder hereof,
by his or her acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the Indenture
or be valid or become obligatory for any purpose until the Certificate of
Authentication hereon shall have been signed by or on behalf of the Debenture
Trustee.
The Corporation is treating the Securities as issued with original
issue discount. The Corporation will provide holders the issue price, the
amount of original issue discount, the issue date and the yield to maturity of
the Securities.
The provisions of this Security are continued on the reverse side
hereof and such provisions shall for all purposes have the same effect as
though fully set forth at this place.
3
<PAGE> 4
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed and sealed this [___] day of [_________], 1998.
HAMILTON BANCORP INC.
By:
----------------------------------------------
Name:
Title:
Attest:
By:
--------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the [___]% Junior Subordinated Deferrable Interest
Debentures Series A of HAMILTON BANCORP INC. referred to in the
within-mentioned Indenture.
WILMINGTON TRUST COMPANY
not in its individual capacity but solely as Debenture Trustee
Dated: By:
-------- -----------------------------------------------------------
Authorized Signatory
4
<PAGE> 5
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Corporation (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of December
[__], 1998 (the "Indenture"), duly executed and delivered between the
Corporation and Wilmington Trust Company, as Debenture Trustee (the "Debenture
Trustee"), to which Indenture reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Debenture Trustee, the Corporation and the holders of the Securities.
Upon the occurrence and continuation of a Special Event (as defined in
the Indenture) prior to [_________ ___], 2008 (the "Initial Optional Redemption
Date"), the Corporation shall have the right, at any time within 90 days
following the occurrence of such Special Event, to prepay this Security in
whole (but not in part) at the Prepayment Price. "Prepayment Price" shall mean,
with respect to any prepayment of this Security, an amount in cash equal to
100% of the principal amount to be prepaid plus any accrued and unpaid interest
(including Compounded Interest and Additional Sums, if any) thereon to the date
of such prepayment.
In addition, the Corporation shall have the right to prepay this
Security, in whole or in part, at any time on or after the Initial Optional
Redemption Date (an "Optional Prepayment"), at the Prepayment Price.
The Prepayment Price shall be paid prior to 12:00 noon, New York City
time, on the date of such prepayment or at such earlier time as the Corporation
determines, provided that the Corporation shall deposit with the Debenture
Trustee an amount sufficient to pay the Prepayment Price by 10:00 a.m., New
York City time, on the date such Prepayment Price is to be paid. Any prepayment
pursuant to this paragraph will be made upon not less than 30 days nor more
than 60 days' prior written notice.
If the Securities are only partially prepaid by the Corporation
pursuant to an Optional Prepayment, the particular Securities to be prepaid
shall be selected on a pro rata basis from the outstanding Securities not
previously called for prepayment; provided, however, that with respect to
Securityholders that would be required to hold Securities with an aggregate
principal amount of less than $10 but more than an aggregate principal amount
of zero as a result of such pro rata prepayment, the Corporation shall prepay
Securities of each such Securityholder so that after such prepayment such
Securityholder shall hold Securities either with an aggregate principal amount
of at least $10 or such Securityholder no longer holds any Securities and shall
use such method (including, without limitation, by lot) as the Corporation
shall deem fair and appropriate; provided, further, that any such proration may
be made on the basis of the aggregate principal amount of Securities held by
each Securityholder thereof and may be made by making such adjustments as the
Corporation deems fair and appropriate in order that only Securities in
denominations of $10 or integral multiples thereof shall be prepaid. In the
event of prepayment of this Security in part only, a new Security or Securities
for the portion hereof that has not been prepaid will be issued in the name of
the holder hereof upon the cancellation hereof.
5
<PAGE> 6
Notwithstanding the foregoing, any prepayment of Securities by the
Corporation shall be subject to the receipt of any and all required regulatory
approvals.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Corporation and the
Debenture Trustee, with the consent of the holders of a majority in aggregate
principal amount of the Securities at the time outstanding (as defined in the
Indenture), to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of modifying in any manner the rights of the holders of the
Securities; provided, however, that no such supplemental indenture shall,
without the consent of each holder of Securities then outstanding and affected
thereby, (i) change the Maturity Date of any Security, or reduce the rate or
extend the time of payment of interest thereon (subject to Article XVI of the
Indenture), or reduce the principal amount thereof, or change any of the
prepayment provisions or make the principal thereof or any interest thereon
payable in any coin or currency other than U.S. dollars, or impair or affect
the right of any holder of Securities to institute suit for payment thereof, or
(ii) reduce the aforesaid percentage of Securities the holders of which are
required to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Securities at the time outstanding affected thereby, on behalf of
all of the holders of the Securities, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture, and its consequences, except a default in the
payment of the principal of or interest on any of the Securities or a default
in respect of any covenant or provision under which the Indenture cannot be
modified or amended without the consent of each holder of Securities then
outstanding. Any such consent or waiver by the holder of this Security (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
holder and upon all future holders and owners of this Security and of any
Security issued in exchange herefor or in place hereof (whether by registration
of transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of and interest
(including Compounded Interest and Additional Sums, if any) on this Security at
the time and place and at the rate and in the money herein prescribed.
So long as no Event of Default shall have occurred and be continuing,
the Corporation shall have the right, at any time and from time to time during
the term of the Securities, to defer payments of interest by extending the
interest payment period (an "Extended Interest Payment Period") of such
Securities for a period not (i) exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such extension period, (ii)
extending beyond the Maturity Date of the Securities or (iii) ending on a date
other than an Interest Payment Date, at the end of which period the Corporation
shall pay all interest then accrued and unpaid (together with interest thereon
at the rate specified for the Securities to the extent that payment of such
interest is enforceable under
6
<PAGE> 7
applicable law). Before the termination of any such Extended Interest Payment
Period, the Corporation may further defer payments of interest by further
extending such Extended Interest Payment Period, provided that such Extended
Interest Payment Period, together with all such previous and further extensions
within such Extended Interest Payment Period, (i) shall not exceed 20
consecutive quarterly periods including the first quarterly period during such
Extended Interest Payment Period, (ii) shall not end on any date other than an
Interest Payment Date, and (iii) shall not extend beyond the Maturity Date of
the Securities. Upon the termination of any such Extended Interest Payment
Period and the payment of all accrued and unpaid interest and any additional
amounts then due, the Corporation may commence a new Extended Interest Payment
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extended Interest Payment Period, except at the end thereof,
but the Corporation may prepay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.
The Corporation has agreed that if (1) there shall have occurred any
event of which the Corporation has actual knowledge that (a) is, or with the
giving of notice or the lapse of time, or both, would constitute, an Event of
Default and (b) in respect of which the Corporation shall not have taken
reasonable steps to cure, (2) if the Securities are held by the Property
Trustee of Hamilton Capital Trust I, the Corporation shall be in default with
respect to its payment of any obligations under the Capital Securities
Guarantee or (3) the Corporation shall have given notice of its election to
exercise its right to commence an Extended Interest Payment Period, and shall
not have rescinded such Notice, and such Extended Interest Payment Period or
any extension thereof shall have commenced and be continuing, it will not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of the Corporation's capital
stock, (ii) make any payment of principal of or interest or premium, if any, on
or repay, repurchase or redeem any debt securities (including other Debentures)
of the Corporation that rank pari passu with or junior in right of payment to
the Securities or (iii) make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any Subsidiary of the
Corporation (including Other Guarantees) if such guarantee ranks pari passu
with or junior in right of payment to the Securities (other than (a) dividends
or distributions of Corporation's capital stock (which includes Common Stock
and preferred stock), (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Capital Securities Guarantee, as
defined in the Indenture, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of Common Stock related to the issuance of Common Stock or
rights under any of the Corporation's benefit or compensation plans for its
directors, officers or employees or any of the Corporation's dividend
reinvestment plans).
Subject to (i) the Corporation having received any required regulatory
approvals and (ii) the Administrative Trustees of Hamilton Capital Trust I
having received an opinion of counsel to the effect that such distribution will
not cause the holders of Capital Securities to recognize gain or loss for
federal income tax purposes, the Corporation will have the right at any time to
liquidate the Trust
7
<PAGE> 8
and, after satisfaction of liabilities of creditors of the Trust as required by
applicable law, to cause the Securities to be distributed to the holders of the
Trust Securities in liquidation of the Trust.
The Securities are issuable only in registered form without coupons in
minimum denominations of $10 and multiples of $10 in excess thereof. As
provided in the Indenture and subject to the transfer restrictions limitations
as may be contained herein and therein from time to time, this Security is
transferable by the holder hereof on the Security Register of the Corporation,
upon surrender of this Security for registration of transfer at the office or
agency of the Corporation in Wilmington, Delaware accompanied by a written
instrument or instruments of transfer in form satisfactory to the Corporation
or the Debenture Trustee duly executed by the holder hereof or his or her
attorney duly authorized in writing, and thereupon one or more new Securities
of authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
made for any such registration of transfer, but the Corporation may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in relation thereto.
Prior to due presentment for registration of transfer of this
Security, the Corporation, the Debenture Trustee, any authenticating agent, any
paying agent, any transfer agent and the security registrar may deem and treat
the holder hereof as the absolute owner hereof (whether or not this Security
shall be overdue and notwithstanding any notice of ownership or writing hereon
made by anyone other than the security registrar for the Securities) for the
purpose of receiving payment of or on account of the principal hereof and
(subject to the Indenture) interest due hereon and for all other purposes, and
neither the Corporation nor the Debenture Trustee nor any authenticating agent
nor any paying agent nor any transfer agent nor any security registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
interest (including Compounded Interest and Additional Sums, if any) on this
Security, or for any claim based hereon, or otherwise in respect hereof, or
based on or in respect of the Indenture, against any incorporator, stockholder,
employee, officer or director, past, present or future, as such, of the
Corporation or of any predecessor or successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise, all such liability being, by the acceptance hereof and
as part of the consideration for the issuance hereof, expressly waived and
released.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PRINCIPLES THEREOF.
8
<PAGE> 1
EXHIBIT 4.5
FORM OF SERIES A CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY,
INSERT: THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION, AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE CLEARING AGENCY TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE CLEARING AGENCY AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
1
<PAGE> 2
Certificate Number: [_____________________] Aggregate Liquidation
Amount: $[_____________________]
CUSIP Number:[______________________]
Certificate Evidencing Capital Securities
of
Hamilton Capital Trust I
[________________]% Capital Securities, Series A
(liquidation amount $10 per Capital Security)
Hamilton Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
[____________] (the "Holder") is the registered owner of [$[_________] in
aggregate liquidation amount of Series A Capital Securities of the Trust](1)
[the aggregate liquidation amount of Series A Capital Securities of the Trust
specified in Schedule A hereto](2) representing undivided preferred beneficial
interests in the assets of the Trust designated the [_____]% Capital Securities,
Series A (liquidation amount $10 per Capital Security) (the "Series A Capital
Securities"). The Series A Capital Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Series A Capital Securities represented hereby are issued and
shall in all respects be subject to the provisions of the Amended and Restated
Declaration of the Trust, dated as of December [___], 1998, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Series A Capital Securities as set forth in Annex I to the
Declaration. Capitalized terms used but not defined herein shall have the
meaning given them in the Declaration. The Sponsor will provide a copy of the
Declaration, the Series A Capital Securities Guarantee and the Indenture
(including any supplemental indenture) to a Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Series A Capital Securities Guarantee to the extent provided therein.
By acceptance hereof, the Holder agrees, for United States
federal income tax purposes, to treat the Series A Debentures as indebtedness
and the Capital Securities as evidence of indirect beneficial ownership in the
Series A Debentures.
- -----------------------
(1) Insert in Definitive Capital Securities only.
(2) Insert in Global Capital Securities only.
2
<PAGE> 3
IN WITNESS WHEREOF, the Trust has executed this certificate
this [_______] day of [_______________ ____].
HAMILTON CAPITAL TRUST I
By:
-----------------------------------
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the [_____]% Capital Securities, Series A of Hamilton
Capital Trust I referred to in the within-mentioned Declaration.
Dated:
---------------------, ----
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Property Trustee
By:
-------------------------------------
Authorized Signatory
3
<PAGE> 4
[FORM OF REVERSE OF SECURITY]
Distributions on each Capital Security will be payable at a fixed rate
per annum of [___]% (the "Coupon Rate") of the liquidation amount of $10 per
Series A Capital Security, such rate being the rate of interest payable on the
Series A Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarterly period will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions," as used herein, includes such cash
distributions and any and all such interest, if any, payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Series A Debentures held by the Property Trustee and to the
extent the Property Trustee has funds legally available therefor.
Distributions on the Series A Capital Securities will be
cumulative, will accumulate from the most recent date to which Distributions
have been paid or, if no Distributions have been paid, from December [___],
1998 and will be payable quarterly in arrears, on March 31, June 30, September
30 and December 31 of each year, commencing March 31, 1999, except as otherwise
described below. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months. As long as no Event of Default has occurred
and is continuing under the Indenture, the Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period at any time and from time to time on the Series A Debentures for a
period not exceeding 20 consecutive calendar quarterly periods, including the
first such quarterly period during such extension period (each an "Extension
Period"), provided that no Extension Period shall end on a date other than an
Interest Payment Date for the Series A Debentures or extend beyond the Maturity
Date of the Series A Debentures. As a consequence of such deferral,
Distributions will also be deferred. Notwithstanding such deferral, quarterly
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Series A Debentures) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any
Extension Period, the Debenture Issuer may further defer payments of interest
by further extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions within such
Extension Period, may not (i) exceed 20 consecutive quarterly periods,
including the first quarterly period during such Extension Period, (ii) end on
a date other than an Interest Payment Date for the Series A Debentures or (iii)
extend beyond the Maturity Date of the Series A Debentures. Payments of
accumulated Distributions will be payable to Holders as they appear on the
books and records of the Trust on the record date immediately preceding the end
of the Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
4
<PAGE> 5
Subject to receipt by the Sponsor of any and all required
regulatory approvals and to certain other conditions set forth in the
Declaration and the Indenture, the Property Trustee may, at the direction of
the Sponsor, at any time dissolve the Trust and, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, cause the
Series A Debentures to be distributed to the Holders of the Securities in
liquidation of the Trust or, simultaneously with any redemption of the Series A
Debentures, cause a Like Amount of the Securities to be redeemed by the Trust.
The Series A Capital Securities shall be redeemable as
provided in the Declaration.
------------------------
ASSIGNMENT
------------------------
FOR VALUE RECEIVED, the undersigned hereby assigns and transfers this Capital
Security Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------
Signature:
----------------------------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee:
------------------------------
5
<PAGE> 6
- --------------------------
Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
6
<PAGE> 1
EXHIBIT 4.6
---------------------------------------
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
HAMILTON BANCORP INC.
Dated as of December [___], 1998
---------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation...............................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.............................................5
SECTION 2.2 Lists of Holders of Securities...............................................5
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee..........................6
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee.....................6
SECTION 2.5 Evidence of Compliance with Conditions Precedent.............................6
SECTION 2.6 Waiver of Events of Default..................................................6
SECTION 2.7 Notice of Events of Default..................................................6
SECTION 2.8 Conflicting Interests........................................................7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee................7
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee.......................9
SECTION 3.3 Not Responsible for Recitals or Issuance of Series
A Capital Securities Guarantee..............................................11
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility...........................11
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee...........................................................11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................................................12
SECTION 5.2 Waiver of Notice and Demand.................................................12
SECTION 5.3 Obligations Not Affected....................................................13
SECTION 5.4 Rights of Holders...........................................................13
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 5.5 Guarantee of Payment........................................................14
SECTION 5.6 Subrogation.................................................................14
SECTION 5.7 Independent Obligations.....................................................14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..................................................14
SECTION 6.2 Ranking.....................................................................15
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................................................15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................................................16
SECTION 8.2 Compensation and Indemnification............................................16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns......................................................17
SECTION 9.2 Amendments..................................................................17
SECTION 9.3 Notices.....................................................................17
SECTION 9.4 Exchange Offer..............................................................18
SECTION 9.5 Benefit.....................................................................18
SECTION 9.6 Governing Law...............................................................19
</TABLE>
(ii)
<PAGE> 4
CROSS REFERENCE TABLE
<TABLE>
<CAPTION>
Section of Trust
Indenture Act of Section of Guarantee
1939, as amended Agreement
- ---------------- ---------
<S> <C>
310(a) ....................................................................... 4.1(a)
310(b) ....................................................................... 4.1(c), 2.8
310(c) ....................................................................... Inapplicable
311(a) ....................................................................... 2.2(b)
311(b) ....................................................................... 2.2(b)
311(c) ....................................................................... Inapplicable
312(a) ....................................................................... 2.2(a)
312(b) ....................................................................... 2.2(b)
313 ....................................................................... 2.3
314(a) ....................................................................... 2.4
314(b) ....................................................................... Inapplicable
314(c) ....................................................................... 2.5
314(d) ....................................................................... Inapplicable
314(e) ....................................................................... 1.1, 2.5, 3.2
314(f) ....................................................................... 2.1, 3.2
315(a) ....................................................................... 3.1(d)
315(b) ....................................................................... 2.7
315(c) ....................................................................... 3.1(c)
315(d) ....................................................................... 3.1(d)
316(a) ....................................................................... 1.1, 2.6, 5.4
316(b) ....................................................................... 5.3
316(c) ....................................................................... 9.2
317(a) ....................................................................... Inapplicable
317(b) ....................................................................... Inapplicable
318(a) ....................................................................... 2.1(a)
318(c) ....................................................................... 2.1(b)
- -------------------------
</TABLE>
* This Cross-Reference Table does not constitute part of this Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
(iii)
<PAGE> 5
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
This SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Series A
Capital Securities Guarantee"), dated as of December [__], 1998, is executed and
delivered by HAMILTON BANCORP INC., a Florida corporation (the "Guarantor"), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee (the
"Capital Securities Guarantee Trustee" or "Trustee"), for the benefit of the
Holders (as defined herein), from time to time, of the Series A Capital
Securities (as defined herein) of HAMILTON CAPITAL TRUST I, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of December [___], 1998, by and among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the Holders, from time
to time, of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing capital securities, having a liquidation amount of $10 per
capital security, such capital securities being designated the [__]% Capital
Securities, Series A (the "Series A Capital Securities").
WHEREAS, as incentive for the Holders to purchase the Series A Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Series A Capital Securities Guarantee, to pay the
Guarantee Payments (as defined herein) to the Holders of the Series A Capital
Securities, and the Guarantor agrees to make certain other payments on the terms
and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering the Common
Securities Guarantee Agreement, dated as of December [___], 1998 (the "Common
Securities Guarantee"), for the benefit of the holders of the Common Securities
(as defined herein), the terms of which provide that if an Event of Default (as
defined in the Declaration) has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated, to the extent and in the manner set forth
in the Common Securities Guarantee, to the rights of Holders of the Series A
Capital Securities to receive Guarantee Payments under this Series A Capital
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of the
Series A Capital Securities, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this Series A
Capital Securities Guarantee for the benefit of such Holders.
<PAGE> 6
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Series A Capital Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Series A Capital Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution of
this Series A Capital Securities Guarantee have the same meaning when used in
this Series A Capital Securities Guarantee unless otherwise defined in this
Series A Capital Securities Guarantee,
(c) a term defined anywhere in this Series A Capital Securities
Guarantee has the same meaning throughout;
(d) all references to "the Series A Capital Securities Guarantee" or
"this Series A Capital Securities Guarantee" are references to this Series A
Capital Securities Guarantee as modified, supplemented or amended from time to
time;
(e) all references in this Series A Capital Securities Guarantee to
Articles and Sections references are to Articles and Sections of this Series A
Capital Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Series A Capital Securities Guarantee, unless otherwise defined in
this Series A Capital Securities Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" shall mean any day other than a Saturday or a Sunday, or
a day on which banking institutions in Wilmington, Delaware, New York, New York
or Miami, Florida are authorized or required by law or executive order to remain
closed.
"Capital Securities Guarantee Trustee" shall mean Wilmington Trust
Company as Trustee under the Series A Capital Securities Guarantee, until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Series A Capital
Securities Guarantee and thereafter means each such Successor Capital Securities
Guarantee Trustee.
"Common Securities" shall mean the securities representing common
undivided beneficial interests in the assets of the Issuer.
- 2 -
<PAGE> 7
"Corporate Trust Office" shall mean the office of the Capital
Securities Guarantee Trustee at which the corporate trust business of the
Capital Securities Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Agreement is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration.
"Covered Person" shall mean any Holder or beneficial owner of the
Series A Capital Securities.
"Debentures" shall mean the series of subordinated debt securities of
the Guarantor designated the [___]% Junior Subordinated Deferrable Interest
Debentures due December [__], 2028, Series A, held by the Property Trustee (as
defined in the Declaration) of the Issuer.
"Event of Default" shall mean a default by the Guarantor on any of its
payment or other obligations under this Series A Capital Securities Guarantee;
provided, however, that, except with respect to default in respect of any
Guarantee Payment, no default by the Guarantor hereunder shall constitute an
Event of Default unless the Guarantor shall have received written notice of the
default and shall not have cured such default within 60 days after receipt
thereof.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Series A Capital
Securities, to the extent not paid or made by or on behalf of the Issuer: (i)
any accumulated and unpaid Distributions (as defined in the Declaration) that
are required to be paid on such Series A Capital Securities, to the extent the
Issuer has funds legally available therefor at such time, (ii) the redemption
price, including all accumulated and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds legally
available therefor at such time, with respect to any Series A Capital Securities
called for redemption, and (iii) upon a voluntary or involuntary dissolution,
winding up or liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Series A Capital
Securities or in connection with the redemption of the Series A Capital
Securities, in each case as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accumulated and unpaid Distributions
on the Series A Capital Securities to the date of payment, to the extent the
Issuer has funds legally available therefor at such time, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders after
satisfaction of liabilities to creditors of the Issuer as required by applicable
law (in either case, the "Liquidation Distribution"). If an Event of Default has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities or any guarantee payment under
the Common Securities Guarantee or any Other Common Securities Guarantee shall
be made until the Holders of the Series A Capital Securities shall be paid in
full the Guarantee Payments to which they are entitled under this Series A
Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Series A Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Series A Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Person actually known to a Responsible
Officer of the Capital Securities Guarantee Trustee to be an Affiliate of the
Guarantor.
"Indemnified Person" shall mean the Capital Securities Guarantee
Trustee (including in its individual capacity), any Affiliate of the Capital
Securities Guarantee Trustee, or any officers,
- 3 -
<PAGE> 8
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Securities Guarantee Trustee.
"Indenture" shall mean the Indenture, dated as of December [__], 1998,
between Hamilton Bancorp Inc., as issuer of Debentures (the "Debenture Issuer"),
and Wilmington Trust Company, as trustee, pursuant to which the Debentures are
to be issued to the Property Trustee of the Issuer.
"Majority in Liquidation Amount of the Series A Capital Securities"
shall mean, except as provided by the Trust Indenture Act, a vote by Holder(s)
of the Series A Capital Securities, voting separately as a class, of more than
50% of the aggregate liquidation amount (including the amount that would be paid
on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Series A Capital Securities.
"Officers' Certificate" shall mean, with respect to any Person, a
certificate signed by the Chairman, the Chief Executive Officer, the President,
an Executive or Senior Vice President, a Vice President, the Chief Financial
Officer and the Secretary or an Assistant Secretary. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Series A Capital Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenants or conditions and the definitions relating thereto;
(b) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(c) a statement as to whether or not, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" in the Common Securities Guarantee.
"Other Debentures" shall mean all junior subordinated debentures, other
than the Debentures, issued by the Guarantor, from time to time, and sold to
trusts other than the Issuer to be established by the Guarantor (if any), in
each case similar to the Issuer.
"Other Guarantees" shall mean all guarantees, other than this Series A
Capital Securities Guarantee, to be issued by the Guarantor with respect to
capital securities (if any) similar to the Series A Capital Securities, issued
by trusts other than the Issuer to be established by the Guarantor (if any), in
each case similar to the Issuer.
"Person" shall mean 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.
- 4 -
<PAGE> 9
"Responsible Officer" shall mean, with respect to a Person, any officer
with direct responsibility for the administration of any matters relating to
this Series A Capital Securities Guarantee.
"Successor Capital Securities Guarantee Trustee" shall mean a successor
Capital Securities Guarantee Trustee possessing the qualifications to act as
Capital Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended.
"Trust Securities" shall mean the Common Securities and the Series A
Capital Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Series A Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Series A Capital Securities Guarantee and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Series A Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control. If any provision of this Series A Capital Securities Guarantee
modifies or excludes any provision of the Trust Indenture Act that may be so
modified or excluded, the modified or excluded provision of the Trust Indenture
Act shall be deemed to apply to this Series A Capital Securities Guarantee as so
modified or excluded, as the case may be.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Capital Securities Guarantee
Trustee (unless the Capital Securities Guarantee Trustee is otherwise the
registrar of the Series A Capital Securities) with a list, in such form as the
Capital Securities Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Series A Capital Securities ("List of Holders")
as of such date, (i) within fourteen (14) days after each record date for
payment of Distributions (as defined in the Declaration), and (ii) at any other
time within 30 days of receipt by the Guarantor of a written request for a List
of Holders as of a date no more than 14 days before such List of Holders is
given to the Capital Securities Guarantee Trustee; provided, however, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Capital Securities Guarantee Trustee by the Guarantor. The Capital
Securities Guarantee Trustee may destroy any List of Holders previously given to
it upon receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with its
obligations under Sections 31l(a), 31l(b) and Section 312(b) of the Trust
Indenture Act.
- 5 -
<PAGE> 10
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee
Within 60 days after May 15, 1999, and no later than May 15 in each
succeeding year, the Capital Securities Guarantee Trustee shall provide to the
Holders of the Series A Capital Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Capital Securities
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports
The Guarantor shall provide to the Capital Securities Guarantee
Trustee, the Securities and Exchange Commission and the Holders such documents,
reports and information as are required by Section 314 of the Trust Indenture
Act (if any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act. Delivery of such reports, information and
documents to the Capital Securities Guarantee Trustee is for informational
purposes only and the Capital Securities Guarantee Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Capital
Securities Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such evidence of compliance with the conditions precedent, if any, provided for
in this Series A Capital Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers' Certificate.
SECTION 2.6 Waiver of Events of Default
The Holders of a Majority in Liquidation Amount of the Series A Capital
Securities may, by vote, on behalf of the Holders of all of the Series A Capital
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Series A Capital Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Notice of Events of Default
(a) The Capital Securities Guarantee Trustee shall, within 10 Business
Days after the occurrence of an Event of Default with respect to this Series A
Capital Securities Guarantee actually known to a Responsible Officer of the
Capital Securities Guarantee Trustee, transmit by mail, first class postage
prepaid, to all Holders of the Series A Capital Securities, notices of all such
Events of Default, unless such Events of Default have been cured before the
giving of such notice; provided, however, that, except in the case of an Event
of Default arising from the non-payment of any
- 6 -
<PAGE> 11
Guarantee Payment, the Capital Securities Guarantee Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Capital Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Series A
Capital Securities.
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received written notice, or a Responsible Officer of the
Capital Securities Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Series A Capital Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee
Trustee
(a) This Series A Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders of the
Series A Capital Securities, and the Capital Securities Guarantee Trustee shall
not transfer this Series A Capital Securities Guarantee to any Person except a
Holder of the Series A Capital Securities exercising his or her rights pursuant
to Section 5.4(b) or to a Successor Capital Securities Guarantee Trustee on
acceptance by such Successor Capital Securities Guarantee Trustee of its
appointment to act as Successor Capital Securities Guarantee Trustee. The right,
title and interest of the Capital Securities Guarantee Trustee shall
automatically vest in any Successor Capital Securities Guarantee Trustee, and
such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Capital Securities Guarantee Trustee has occurred and is continuing, the
Capital Securities Guarantee Trustee shall enforce this Series A Capital
Securities Guarantee for the benefit of the Holders of the Series A Capital
Securities.
(c) The Capital Securities Guarantee Trustee, before the occurrence of
any Event of Default (of which, other than a default in respect of any Guarantee
Payment, a Responsible Officer of the Property Trustee has actual knowledge) and
after the curing of all such Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Series A Capital Securities Guarantee, and no implied covenants or obligations
shall be read into this Series A Capital Securities Guarantee against the
Capital Securities Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Capital Securities Guarantee Trustee, the
Capital
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Securities Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Series A Capital Securities Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Series A Capital Securities Guarantee shall be
construed to relieve the Capital Securities Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default (of
which, other than a default in respect of any Guarantee Payment, a
Responsible Officer of the Property Trustee has actual knowledge) and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Capital Securities
Guarantee Trustee shall be determined solely by the express provisions
of this Series A Capital Securities Guarantee, and the Capital
Securities Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Series A Capital Securities Guarantee, and no implied
covenants or obligations shall be read into this Series A Capital
Securities Guarantee against the Capital Securities Guarantee Trustee;
and
(B) in the absence of bad faith on the part of the Capital
Securities Guarantee Trustee, the Capital Securities Guarantee Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Capital Securities Guarantee Trustee and
conforming to the requirements of this Series A Capital Securities
Guarantee; provided, however, that in the case of any such certificates
or opinions that by any provision hereof are specifically required to
be furnished to the Capital Securities Guarantee Trustee, the Capital
Securities Guarantee Trustee shall be under a duty to examine the same
to determine whether or not on their face they conform to the
requirements of this Series A Capital Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be
liable for any errors of judgment made in good faith by a Responsible
Officer of the Capital Securities Guarantee Trustee, unless it shall be
proved that the Capital Securities Guarantee Trustee or such
Responsible Officer was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Capital Securities Guarantee Trustee shall not be
liable with respect to any actions taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders of a
Majority in Liquidation Amount of the Series A Capital Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Capital Securities Guarantee Trustee, or
exercising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Series A Capital Securities Guarantee; and
(iv) no provision of this Series A Capital Securities
Guarantee shall require the Capital Securities Guarantee Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of
any of its rights or powers, if the Capital Securities Guarantee
Trustee shall have reasonable
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grounds for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Series A Capital
Securities Guarantee or indemnity, reasonably satisfactory to the
Capital Securities Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) the Capital Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or refraining
from acting, upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Series A Capital Securities Guarantee may be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this Series A Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall
deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securities
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate, which, upon receipt of
such request, shall be promptly delivered by the Guarantor;
(iv) the Capital Securities Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument
or other document (or any rerecording, refiling or registration
thereof);
(v) the Capital Securities Guarantee Trustee may consult
with counsel of its selection, and the advice or opinion of such
counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion; and such counsel may be counsel to the Guarantor or
any of its Affiliates and may include any of its employees; the Capital
Securities Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Series A Capital
Securities Guarantee from any court of competent jurisdiction;
(vi) the Capital Securities Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by
this Series A Capital Securities Guarantee at the request or direction
of any Holder, unless such Holder shall have provided to the Capital
Securities Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Capital Securities Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Capital Securities Guarantee Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Capital Securities Guarantee
Trustee, provided, however, that nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Capital Securities Guarantee
Trustee, upon the
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<PAGE> 14
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Series A Capital Securities
Guarantee;
(vii) the Capital Securities Guarantee Trustee shall have no
obligation to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Capital Securities Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit;
(viii) the Capital Securities Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or
attorneys, and the Capital Securities Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such
person appointed with due care by it hereunder;
(ix) any action taken by the Capital Securities Guarantee
Trustee or its agents hereunder shall bind the Holders of the Series A
Capital Securities, and the signature of the Capital Securities
Guarantee Trustee or its agents alone shall be sufficient and effective
to perform any such action; and no third party shall be required to
inquire as to the authority of the Capital Securities Guarantee Trustee
to so act or as to its compliance with any of the terms and provisions
of this Series A Capital Securities Guarantee, both of which shall be
conclusively evidenced by the Capital Securities Guarantee Trustee's or
its agent's taking such action;
(x) whenever in the administration of this Series A Capital
Securities Guarantee the Capital Securities Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder, the Capital
Securities Guarantee Trustee (i) may request instructions from the
Holders of a Majority in Liquidation Amount of the Series A Capital
Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions; and
(xi) the Capital Securities Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in
good faith, without negligence, and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Series A Capital Securities Guarantee.
(b) No provision of this Series A Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Capital Securities Guarantee
Trustee shall be construed to be a duty.
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<PAGE> 15
SECTION 3.3 Not Responsible for Recitals or Issuance of Series A
Capital Securities Guarantee
The recitals contained in this Series A Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Capital Securities Guarantee Trustee makes no representation as to the validity
or sufficiency of this Series A Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Securities Guarantee Trustee
that shall
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation or other Person organized and doing
business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or a corporation or
other Person permitted by the Securities and Exchange Commission to act
as an indenture trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least fifty million U.S. dollars ($50,000,000), and
subject to supervision or examination by federal, state, territorial or
District of Columbia authority; it being understood that if such
corporation or other Person publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii) 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.
(b) If at any time the Capital Securities Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Capital Securities Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Securities Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Capital Securities Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor except
during an Event of Default.
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<PAGE> 16
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Capital Securities Guarantee Trustee and
delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office until a
Successor Capital Securities Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Securities Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Capital
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Securities Guarantee
Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Capital Securities Guarantee Trustee.
(f) Upon termination of this Series A Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Series A
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding
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<PAGE> 17
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Series A Capital Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Series A Capital Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Series A Capital Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Series A 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 Series A Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Series A Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred;
(g) the consummation of the Exchange Offer (subject to Section 7.1
hereof); or
(h) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor;
it being the intent of this Section 5.3 that the obligations of the Guarantor
with respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in Liquidation Amount of the Series A
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee in respect of this Series A Capital Securities
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<PAGE> 18
Guarantee or exercising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Series A Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to enforce this
Series A Capital Securities Guarantee, any Holder of the Series A Capital
Securities may institute a legal proceeding directly against the Guarantor to
enforce the Capital Securities Guarantee Trustee's rights under this Series A
Capital Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Capital Securities Guarantee Trustee or any other person
or entity. The Guarantor waives any right or remedy to require that any action
be brought first against the Issuer or any other person or entity before
proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Series A Capital Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Series A Capital Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Series A Capital Securities
Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
right that it may acquire by way of subrogation or any indemnity, reimbursement
or other agreement, in all cases as a result of payment under this Series A
Capital Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Series A Capital Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Series A
Capital Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Series
A Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Capital Securities remain outstanding, if (l) there
shall have occurred any event of which the Guarantor has actual knowledge that
(A) is a Default or Event of Default (each as defined in the Indenture) and (B)
in respect of which the Guarantor shall not have taken reasonable steps to cure,
(2) if the Debentures are held by the Property Trustee, the Guarantor shall be
in default with respect to its payment of any obligations under this Series A
Capital Securities
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<PAGE> 19
Guarantee or (3) the Guarantor shall have given notice of its election of the
exercise of its right to commence an Extended Interest Payment Period as
provided in the Indenture and shall not have rescinded such notice, and such
Extended Interest Payment Period, or an extension thereof, shall have commenced
and be continuing, the Guarantor shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor's capital stock, (ii) make any payment of
principal of, or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Guarantor (including Other Debentures) that rank pari
passu with or junior in right of payment to the Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor (including Other Guarantees) if
such guarantee ranks pari passu with or junior in right of payment to the
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants, rights to subscribe for or purchase shares of, common stock of the
Guarantor, (b) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under this Series A Capital Securities Guarantee,
(d) as a result of a reclassification of the Guarantor's capital stock or the
exchange or the conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock, (e) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) purchases of common stock related
to the issuance of common stock or rights under any of the Guarantor's benefit
or compensation plans for its directors, officers or employees or any of the
Guarantor's dividend reinvestment plans).
SECTION 6.2 Ranking
This Series A Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XV of the Indenture shall apply to the obligations of the Guarantor
under this Series A Capital Securities Guarantee as if such Article XV were set
forth herein in full, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor, any Other Guarantee
and, except to the extent set forth therein, the Common Securities Guarantee,
any Other Common Securities Guarantee, and any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference stock of
any Affiliate of the Guarantor, and (iii) senior to the Guarantor's common
stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Series A Capital Securities Guarantee shall terminate and be of no
further force and effect upon (i) full payment of the Redemption Price of all
Series A Capital Securities or (ii) dissolution, winding up or liquidation of
the Issuer, immediately following the full payment of the amounts payable in
accordance with the Declaration or the distribution of all of the Debentures to
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<PAGE> 20
the holders of the Trust Securities. Notwithstanding the foregoing, this Series
A Capital Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of the Series A
Capital Securities must restore payment of any sums paid under the Series A
Capital Securities or under this Series A Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Series A
Capital Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Series A Capital Securities Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of the Series A Capital Securities might properly
be paid.
SECTION 8.2 Compensation and Indemnification
The Guarantor agrees to pay to the Capital Securities Guarantee Trustee
such compensation for its services as shall be mutually agreed upon by the
Guarantor and the Capital Securities Guarantee Trustee. The Guarantor shall
reimburse the Capital Securities Guarantee Trustee upon request for all
reasonable out-of-pocket expenses incurred by it, including the reasonable
compensation and expenses of the Capital Securities Guarantee Trustee's agents
and counsel, except any expense as may be attributable to the negligence or bad
faith of the Capital Securities Guarantee Trustee.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, action, suit, claim or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The provisions
of this Section 8.2 shall survive the termination of this Series A Capital
Securities Guarantee and shall survive the resignation or removal of the Capital
Securities Guarantee Trustee.
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<PAGE> 21
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Series A Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Series A Capital Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not materially adversely
affect the rights of Holders of the Series A Capital Securities (in which case
no consent of such Holders will be required), this Series A Capital Securities
Guarantee may only be amended with the prior approval of the Holders of a
Majority in Liquidation Amount of the Series A Capital Securities. The
provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Trust Securities apply to the giving of such approval. This
Series A Capital Securities Guarantee may not be amended, and no amendment
hereof that affects the Capital Securities Guarantee Trustee's rights, duties or
immunities hereunder or otherwise, shall be effective, unless such amendment is
executed by the Capital Securities Guarantee Trustee (which shall have no
obligation to execute any such amendment, but may do so in its sole discretion).
SECTION 9.3 Notices
All notices provided for in this Series A Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Capital Securities Guarantee Trustee and the
Holders of the Series A Capital Securities):
HAMILTON CAPITAL TRUST I
c/o Hamilton Bancorp Inc.
3750 N.W. 87th Avenue
Miami, Florida 33178
Attention: John M.R. Jacobs
Telecopy: (305) 717-5556
Telephone: (305) 717-5500
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<PAGE> 22
(b) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice of to
the Holders of the Series A Capital Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Telecopy: (302) 651-8882
Telephone: (302) 651-1000
(c) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Capital Securities Guarantee Trustee and the Holders of the Series A Capital
Securities):
HAMILTON BANCORP INC.
3750 N.W. 87th Avenue
Miami, Florida 33178
Attention: John M.R. Jacobs
Telecopy: (305) 717-5556
Telephone: (305) 717-5500
(d) If given to any Holder of the Series A Capital Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Series A Capital Securities Guarantee is solely for the benefit of
the Holders of the Series A Capital Securities and, subject to Section 3.1(a),
is not separately transferable from the Series A Capital Securities.
SECTION 9.5 Governing Law
THIS SERIES A CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.
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<PAGE> 23
This Series A Capital Securities Guarantee is executed as of the day
and year first above written.
HAMILTON BANCORP INC.
as Guarantor
By:
-------------------------------------------------
Eduardo A. Masferrer
Chairman of the Board and Chief Executive Officer
WILMINGTON TRUST COMPANY,
as Capital Securities Guarantee Trustee
By:
-------------------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4.7
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HAMILTON BANCORP INC.
-----------------------------------------------------
-----------------------------------------------------
INDENTURE
Dated as of December [__], 1998
-----------------------------------------------------
WILMINGTON TRUST COMPANY,
as Debenture Trustee
-----------------------------------------------------
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
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<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.01 Definitions.........................................................................................1
SECTION 1.02 Business Day Certificate............................................................................9
ARTICLE II
SECURITIES
SECTION 2.01 Forms Generally.....................................................................................9
SECTION 2.02 Execution and Authentication.......................................................................10
SECTION 2.03 Form and Payment...................................................................................10
SECTION 2.04 Global Security....................................................................................10
SECTION 2.05 Interest...........................................................................................12
SECTION 2.06 Transfer and Exchange..............................................................................12
SECTION 2.07 Replacement Securities.............................................................................13
SECTION 2.08 Temporary Securities...............................................................................14
SECTION 2.09 Cancellation.......................................................................................14
SECTION 2.10 Defaulted Interest.................................................................................14
SECTION 2.11 CUSIP Numbers......................................................................................15
ARTICLE III
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 3.01 Payment of Principal and Interest..................................................................15
SECTION 3.02 Offices for Notices and Payments, etc..............................................................16
SECTION 3.03 Appointments to Fill Vacancies in Debenture Trustee's Office.......................................16
SECTION 3.04 Provision as to Paying Agent.......................................................................16
SECTION 3.05 Certificate to Debenture Trustee...................................................................17
SECTION 3.06 Compliance with Consolidation Provisions...........................................................17
SECTION 3.07 Limitation on Dividends............................................................................17
SECTION 3.08 Covenants as to Hamilton Capital Trust I...........................................................18
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 3.09 Payment of Expenses................................................................................18
SECTION 3.10 Payment Upon Resignation or Removal................................................................19
ARTICLE IV
LIST OF SECURITYHOLDERS AND REPORTS BY THE
CORPORATION AND THE DEBENTURE TRUSTEE
SECTION 4.01 List of Securityholders............................................................................20
SECTION 4.02 Preservation and Disclosure of Lists...............................................................20
SECTION 4.03 Reports by the Corporation.........................................................................21
SECTION 4.04 Reports by the Debenture Trustee...................................................................22
ARTICLE V
REMEDIES OF THE DEBENTURE TRUSTEE AND
SECURITYHOLDERS UPON EVENT OF DEFAULT
SECTION 5.01 Events of Default..................................................................................22
SECTION 5.02 Payment of Securities on Default; Suit Therefor....................................................24
SECTION 5.03 Application of Moneys Collected by Debenture Trustee...............................................26
SECTION 5.04 Proceedings by Securityholders.....................................................................26
SECTION 5.05 Proceedings by Debenture Trustee...................................................................27
SECTION 5.06 Remedies Cumulative and Continuing.................................................................27
SECTION 5.07 Direction of Proceedings and Waiver of Defaults
by Majority of Securityholders.....................................................................28
SECTION 5.08 Notice of Defaults.................................................................................29
SECTION 5.09 Undertaking to Pay Costs...........................................................................29
ARTICLE VI
CONCERNING THE DEBENTURE TRUSTEE
SECTION 6.01 Duties and Responsibilities of Debenture Trustee...................................................30
SECTION 6.02 Reliance on Documents, Opinions, etc...............................................................31
SECTION 6.03 No Responsibility for Recitals, etc................................................................32
SECTION 6.04 Debenture Trustee, Authenticating Agent, Paying Agents,
Transfer Agents and Registrar May Own Securities...................................................33
SECTION 6.05 Moneys to be Held in Trust.........................................................................33
SECTION 6.06 Compensation and Expenses of Debenture Trustee.....................................................33
SECTION 6.07 Officers' Certificate as Evidence..................................................................34
SECTION 6.08 Conflicting Interest of Debenture Trustee..........................................................34
SECTION 6.09 Eligibility of Debenture Trustee...................................................................34
SECTION 6.10 Resignation or Removal of Debenture Trustee........................................................35
SECTION 6.11 Acceptance by Successor Debenture Trustee..........................................................36
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 6.12 Succession by Merger, etc..........................................................................37
SECTION 6.13 Limitation on Rights of Debenture Trustee as a Creditor............................................37
SECTION 6.14 Authenticating Agents..............................................................................37
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01 Action by Securityholders..........................................................................38
SECTION 7.02 Proof of Execution by Securityholders..............................................................39
SECTION 7.03 Who Are Deemed Absolute Owners.....................................................................39
SECTION 7.04 Securities Owned by Corporation Deemed Not Outstanding.............................................40
SECTION 7.05 Revocation of Consents; Future Holders Bound.......................................................40
ARTICLE VIII
MEETINGS OF SECURITYHOLDERS
SECTION 8.01 Purposes of Meetings...............................................................................40
SECTION 8.02 Call of Meetings by Debenture Trustee..............................................................41
SECTION 8.03 Call of Meetings by Corporation or Securityholders.................................................41
SECTION 8.04 Qualifications for Voting..........................................................................41
SECTION 8.05 Regulations........................................................................................42
SECTION 8.06 Voting.............................................................................................42
ARTICLE IX
AMENDMENTS
SECTION 9.01 Without Consent of Securityholders.................................................................43
SECTION 9.02 With Consent of Securityholders....................................................................44
SECTION 9.03 Compliance with Trust Indenture Act; Effect of Supplemental Indentures.............................45
SECTION 9.04 Notation on Securities.............................................................................45
SECTION 9.05 Evidence of Compliance of Supplemental Indenture
to be Furnished to Debenture Trustee...............................................................45
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE, TRANSFER AND LEASE
SECTION 10.01 Corporation May Consolidate, etc., on Certain Terms...............................................46
SECTION 10.02 Successor Person to be Substituted for Corporation................................................46
SECTION 10.03 Opinion of Counsel to be Given Debenture Trustee..................................................47
</TABLE>
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<TABLE>
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
<S> <C> <C>
SECTION 11.01 Discharge of Indenture............................................................................47
SECTION 11.02 Deposited Moneys and U.S. Government Obligations
to be Held in Trust by Debenture Trustee..........................................................48
SECTION 11.03 Paying Agent to Repay Moneys Held.................................................................48
SECTION 11.04 Return of Unclaimed Moneys........................................................................48
SECTION 11.05 Defeasance Upon Deposit of Moneys or U.S. Government Obligations..................................48
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01 Indenture and Securities Solely Corporate Obligations.............................................50
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Successors........................................................................................50
SECTION 13.02 Official Acts by Successor Corporation............................................................50
SECTION 13.03 Surrender of Corporation Powers...................................................................50
SECTION 13.04 Addresses for Notices, etc........................................................................51
SECTION 13.05 Governing Law.....................................................................................51
SECTION 13.06 Evidence of Compliance with Conditions Precedent..................................................51
SECTION 13.07 Business Days.....................................................................................52
SECTION 13.08 Trust Indenture Act to Control....................................................................52
SECTION 13.09 Table of Contents, Headings, etc..................................................................52
SECTION 13.10 Execution in Counterparts.........................................................................52
SECTION 13.11 Separability......................................................................................52
SECTION 13.12 Assignment........................................................................................52
SECTION 13.13 Acknowledgment of Rights..........................................................................53
ARTICLE XIV
PREPAYMENT OF SECURITIES
SECTION 14.01 Special Event Prepayment..........................................................................53
SECTION 14.02 Optional Prepayment by Corporation................................................................53
SECTION 14.03 No Sinking Fund...................................................................................54
SECTION 14.04 Notice of Prepayment; Selection of Securities.....................................................54
SECTION 14.05 Payment of Securities Called for Prepayment.......................................................55
</TABLE>
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<TABLE>
ARTICLE XV
SUBORDINATION OF SECURITIES
<S> <C> <C>
SECTION 15.01 Agreement to Subordinate..........................................................................55
SECTION 15.02 Default on Senior Indebtedness....................................................................56
SECTION 15.03 Liquidation; Dissolution; Bankruptcy..............................................................56
SECTION 15.04 Subrogation.......................................................................................58
SECTION 15.05 Debenture Trustee to Effectuate Subordination.....................................................58
SECTION 15.06 Notice by the Corporation.........................................................................59
SECTION 15.07 Rights of the Debenture Trustee; Holders of Senior Indebtedness...................................60
SECTION 15.08 Subordination May Not Be Impaired.................................................................60
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01 Extension of Interest Payment Period..............................................................61
SECTION 16.02 Notice of Extension...............................................................................61
</TABLE>
TESTIMONIUM
SIGNATURES
EXHIBIT A
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Tie Sheet of provisions of Trust Indenture Act of 1939 with Indenture
dated as of December [__], 1998 between Hamilton Bancorp Inc. and Wilmington
Trust Company, as Debenture Trustee:
<TABLE>
<CAPTION>
ACT SECTION INDENTURE SECTION
<S> <C> <C>
310(a)(1) ...................................................................... 6.09
(a)(2) ................................................................... 6.09
310(a)(3) ....................................................................... N/A
(a)(4) .................................................................... N/A
310(a)(5) .................................................................6.09, 6.10, 6.11
310(b) ..................................................................... N/A
310(c) .................................................................... 6.13
311(a) and (b) ........................................................................ N/A
311(c) ..................................................................... N/A
312(a) ...............................................................4.01(a), 4.02(a)
312(b) and (c) ..................................................................4.02(b), 4.04(c)
313(a) ....................................................................... 4.04(a)
313(b) ....................................................................... 4.04(a)
313(b)(2) ......................................................................... 4.04(a)
313(c) ....................................................................... 4.04(a)
313(d) ....................................................................... 4.04(b)
314(a) ..................................................................... 4.03
314(b) ...................................................................... N/A
314(c)(1) and (2)............................................................. 6.07, 13.06, 13.06
314(c)(3) ....................................................................... N/A
314(d) ..................................................................... N/A
314(e) ....................................................................6.07, 13.06
314(f) .................................................................... N/A
315(a)(c) and (d)..................................................................... 6.01
315(b) .................................................................... 5.08
315(e) ..................................................................... 5.09
316(a)(1) ....................................................................... 5.07
316(a)(2) ........................................................................ N/A
316(a) last sentence.................................................................. 9.02
316(b) ...................................................................... 9.02
317(a) ...................................................................... 5.05
317(b) ...................................................................... 6.05
318 ..................................................................... 13.08
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</TABLE>
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
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THIS INDENTURE, dated as of December [__], 1998, between Hamilton
Bancorp Inc., a Florida corporation (hereinafter called the "Corporation"), and
Wilmington Trust Company, a Delaware banking corporation, as debenture trustee
(hereinafter sometimes called the "Debenture Trustee").
WITNESSETH:
In consideration of the premises, and the purchase of the Securities
(as defined below) by the holders thereof, the Corporation covenants and agrees
with the Debenture Trustee for the equal and proportionate benefit of the
respective holders from time to time of the Securities, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture shall have the respective meanings specified in this Section
1.01. All other terms used in this Indenture which are defined in the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), or which are by
reference therein defined in the Securities Act of 1933, as amended (the
"Securities Act"), shall (except as herein otherwise expressly provided or
unless the context otherwise requires) have the meanings assigned to such terms
in said Trust Indenture Act and in said Securities Act as in force at the date
of this Indenture as originally executed. The following terms have the meanings
given to them in the Declaration: (i) Clearing Agency; (ii) Delaware Trustee;
(iii) Property Trustee; (iv) Administrative Trustees; (v) Series A Capital
Securities; (vi) Direct Action; (vii) Series A Capital Securities Guarantee;
(viii) Distributions; and (ix) Underwriters. All accounting terms used herein
and not expressly defined shall have the meanings assigned to such terms in
accordance with generally accepted accounting principles, and the term
"generally accepted accounting principles" means such accounting principles as
are generally accepted at the time of any computation. The words "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. Headings are used for convenience of reference only and do not
affect interpretation. The singular includes the plural and vice versa.
"Additional Sums" shall have the meaning set forth in Section 2.06(c).
"Affiliate" shall have the meaning given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Allocable Amounts," when used with respect to any Senior Indebtedness,
means all amounts due or to become due on such Senior Indebtedness less, if
applicable, any amount which would have been paid to, and retained by, the
holders of such Senior Indebtedness (whether as a result of the receipt of
payments by the holders of such Senior Indebtedness from the Corporation or any
other obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such Senior
Indebtedness pursuant to any provision of such
<PAGE> 9
Indebtedness for the payment over of amounts received on account of such
indebtedness to the holders of such Senior Indebtedness or otherwise) but for
the fact that such Senior Indebtedness is subordinate or junior in right of
payment to (or subject to a requirement that amounts received on such Senior
Indebtedness be paid over to obligees on) trade accounts payable or accrued
liabilities arising in the ordinary course of business.
"Authenticating Agent" shall mean any agent or agents of the Debenture
Trustee which at the time shall be appointed and acting pursuant to Section
6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors of the
Corporation or any duly authorized committee of that board.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Corporation to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Debenture Trustee.
"Book-Entry Capital Securities" shall have the meaning set forth in
Section 2.05(a)(i).
"Business Day" shall mean, with respect to any series of Securities,
any day other than a Saturday or a Sunday or a day on which banking institutions
in Wilmington, Delaware, New York, New York or Miami, Florida are authorized or
required by law or executive order to remain closed.
"Capital Securities" shall mean undivided beneficial interests in the
assets of the Trust which are designated as "Series A Capital Securities" and
rank pari passu with the Common Securities issued by the Trust; provided,
however, that if an Event of Default has occurred and is continuing, no payments
in respect of Distributions on, or payments upon liquidation, redemption or
otherwise with respect to, the Common Securities shall be made until the holders
of the Capital Securities shall be paid in full the Distributions and the
liquidation, redemption and other payments to which they are entitled.
"Capital Securities Guarantee" shall mean any guarantee agreement that
the Corporation may enter into with Wilmington Trust Company or other Persons
that operates directly or indirectly for the benefit of holders of Capital
Securities and shall include the Series A Capital Securities Guarantee with
respect to the Series A Capital Securities.
"Commission" shall mean the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Securities" shall mean undivided beneficial interests in the
assets of the Trust which are designated as "[____]% Common Securities, Series
A" and rank pari passu with Capital Securities issued by
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<PAGE> 10
the Trust; provided, however, that if an Event of Default has occurred and is
continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the holders of the Capital Securities shall be paid in full
the Distributions and the liquidation, redemption and other payments to which
they are then entitled.
"Common Securities Guarantee" shall mean any guarantee that the
Corporation may enter into that operates directly or indirectly for the benefit
of holders of Common Securities.
"Common Stock" shall mean the Common Stock, par value $0.01 per share,
of the Corporation or any other class of stock resulting from changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
"Compounded Interest" shall have the meaning set forth in Section
16.01.
"Corporation" shall mean the person identified as "corporation" in the
preamble to this Indenture and, subject to the provisions of Article X, shall
also include its successors and assigns.
"Corporation Request" or "Corporation Order" shall mean a written
request or order signed in the name of the Corporation by an Officer and
delivered to the Debenture Trustee.
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Debenture Trustee" shall mean the Person identified as "Debenture
Trustee" in the preamble to this Indenture and, subject to the provisions of
Article VI hereof, shall also include its successors and assigns.
"Declaration" shall mean the Amended and Restated Declaration of Trust
of the Trust, dated as of December [__], 1998, by and among the Trustees (as
defined therein), the Corporation, as sponsor, and the holders from time to time
of undivided beneficial interests in the assets of the Trust, as amended from
time to time.
"Default" shall mean any event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulted Interest" shall have the meaning set forth in Section 2.11.
"Deferred Interest" shall have the meaning set forth in Section 16.01.
"Definitive Securities" shall mean those securities issued in fully
registered certificated form not otherwise in global form.
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<PAGE> 11
"Depositary" shall mean, with respect to the Securities for which the
Corporation shall determine that such Securities will be issued as a Global
Security, The Depository Trust Company, New York, New York, or another clearing
agency, or any successor registered as a clearing agency pursuant to Section 17A
of the Exchange Act or other applicable statute or regulation, which, in each
case, shall be designated by the Corporation pursuant to Section 2.05(d).
"Dissolution Event" shall mean any event resulting in the dissolution
of the Trust pursuant to the Declaration, and the distribution of the Securities
held by the Property Trustee to the holders of the Trust Securities issued by
the Trust pro rata in accordance with the Declaration.
"Event of Default" shall mean any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.01.
"Federal Reserve" shall mean the Board of Governors of the Federal
Reserve System.
"Global Security" shall mean, with respect to the Securities, a
Security executed by the Corporation and delivered by the Debenture Trustee to
the Depositary or pursuant to the Depositary's instruction, or if no
instructions are received then held by the Property Trustee, all in accordance
with this Indenture, which Security shall be registered in the name of the
Depositary or its nominee.
"Indebtedness" shall mean, whether recourse is to all or a portion of
the assets of the Corporation and whether or not contingent, (i) every
obligation of the Corporation for money borrowed; (ii) every obligation of the
Corporation evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of the Corporation
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of the Corporation; (iv) every obligation of the
Corporation issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities arising in
the ordinary course of business); (v) every capital lease obligation of the
Corporation; (vi) all indebtedness of the Corporation, whether incurred on or
prior to the date of this Indenture or hereafter incurred, for claims in respect
of derivative products, including interest rate, foreign exchange rate and
commodity forward contracts, options and swaps and similar arrangements; and
(vii) every obligation of the type referred to in clauses (i) through (vi) of
another Person and all dividends of another Person the payment of which, in
either case, the Corporation has guaranteed or is responsible or liable for
directly or indirectly, as obligor or otherwise.
"Indebtedness Ranking on a Parity with the Securities" shall mean (i)
Indebtedness, whether outstanding on the date of execution of this Indenture or
hereafter created, assumed or incurred, to the extent such Indebtedness by its
terms ranks pari passu with and not prior to the Securities in the right of
payment upon the happening of the dissolution, winding-up, liquidation or
reorganization of the Corporation and (ii) all other debt securities, and
guarantees in respect of those debt securities,
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<PAGE> 12
issued to any trust other than the Trust, or a trustee of such trust,
partnership or other entity affiliated with the Corporation, that is a financing
vehicle of the Corporation (a "financing entity") in connection with the
issuance by such financing entity of equity securities or other securities
guaranteed by the Corporation pursuant to an instrument that ranks pari passu
with or junior in right of payment to the Capital Securities Guarantee. The
securing of any Indebtedness otherwise constituting Indebtedness Ranking on a
Parity with the Securities shall not be deemed to prevent such Indebtedness from
constituting Indebtedness Ranking on a Parity with the Securities.
"Indebtedness Ranking Junior to the Securities" shall mean any
Indebtedness, whether outstanding on the date of execution of this Indenture or
hereafter created, assumed or incurred, to the extent such Indebtedness by its
terms ranks junior to and not pari passu with or prior to the Securities (and
any other Indebtedness Ranking on a Parity with the Securities) in right of
payment upon the happening of the dissolution or winding-up or liquidation or
reorganization of the Corporation. The securing of any Indebtedness otherwise
constituting Indebtedness Ranking Junior to the Securities shall not be deemed
to prevent such Indebtedness from constituting Indebtedness Ranking Junior to
the Securities.
"Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.
"Initial Optional Redemption Date" shall mean December [__], 2008.
"Interest Payment Date" shall have the meaning set forth in Section
2.06(a).
"Investment Company" shall mean an investment company as defined in the
Investment Company Act.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" shall mean the receipt by the Debenture
Issuer and the Trust of an opinion of independent securities counsel experienced
in such matters to the effect that as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any rules, guidelines or policies
of any applicable regulatory authority for the Debenture Issuer or (b) any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of original
issuance of the Securities, the Trust is, or within 90 days of the date of such
opinion will be, considered an investment company that is required to be
registered under the Investment Company Act.
"Like Amount" shall mean (i) with respect to a redemption of the Trust
Securities, Trust Securities having a liquidation amount equal to the principal
amount of Securities to be paid in accordance with their terms and (ii) with
respect to a distribution of Securities upon the liquidation
-5-
<PAGE> 13
of the Trust, Securities having a principal amount equal to the liquidation
amount of the Trust Securities of the holder to whom Securities are distributed.
"Maturity Date" shall mean [_____________ ___], 2028.
"Non Book-Entry Capital Securities" shall have the meaning set forth in
Section 2.05(a)(ii).
"Officers" shall mean any of the Chairman, the Chief Executive Officer,
the President, an Executive or Senior Vice President, a Vice President, the
Chief Financial Officer, the Secretary or an Assistant Secretary of the
Corporation.
"Officers' Certificate" shall mean a certificate signed by two Officers
and delivered to the Debenture Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be an employee of the Corporation, and who shall be reasonably acceptable to the
Debenture Trustee.
"Other Debentures" shall mean all junior subordinated debentures other
than the Securities issued by the Corporation from time to time and sold to
trusts other than the Trust to be established by the Corporation (if any), in
each case similar to the Trust.
"Other Guarantees" shall mean all guarantees other than the Capital
Securities Guarantee and the Common Securities Guarantee issued by the
Corporation with respect to preferred beneficial interests (if any) issued by
trusts to be established by the Corporation (if any), other than the Trust, in
each case similar to the Trust.
The term "outstanding" when used with reference to the Securities,
shall mean, subject to the provisions of Section 7.04, as of any particular
time, all Securities authenticated and delivered by the Debenture Trustee or the
Authenticating Agent under this Indenture, except
(a) Securities theretofore canceled by the Debenture Trustee or
the Authenticating Agent or delivered to the Debenture Trustee
for cancellation;
(b) Securities, or portions thereof, for the payment or prepayment
of which moneys in the necessary amount shall have been
deposited in trust with the Debenture Trustee or with any
paying agent (other than the Corporation) or shall have been
set aside and segregated in trust by the Corporation (if the
Corporation shall act as its own paying agent); provided that,
if such Securities, or portions thereof, are to be prepaid
prior to maturity thereof, notice of such prepayment shall
have been given as set forth in Article XIV or provision
satisfactory to the Debenture Trustee shall have been made for
giving such notice; and
(c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.08 unless
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<PAGE> 14
proof satisfactory to the Corporation and the Debenture
Trustee is presented that any such Securities are held by bona
fide holders in due course.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security shall mean every
previous Security 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 2.08 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Prepayment Price" shall mean the prepayment price of the Debentures
equal to 100% of the principal amount of the Debentures to be prepaid plus any
accrued and unpaid interest (including Compounded Interest and Additional Sums,
if any, thereon to the date of prepayment).
"Principal Office of the Debenture Trustee," or other similar term,
shall mean the office of the Debenture Trustee, at which at any particular time
its corporate trust business shall be administered.
"Regulatory Capital Event" shall mean the receipt by the Corporation
and the Trust of an opinion of independent bank regulatory counsel experienced
in such matters to the effect that as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any rules, guidelines or
policies of an applicable regulatory authority for the Debenture Issuer or (b)
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of original
issuance of the Securities, the Capital Securities do not constitute, or within
90 days of the date of such opinion will not constitute, Tier 1 Capital (or its
then equivalent if the Corporation were subject to such capital requirement);
provided, however, that the distribution of the Securities in connection with
the liquidation of the Trust by the Corporation shall not in and of itself
constitute a Regulatory Capital Event.
"Responsible Officer" shall mean any officer of the Debenture Trustee's
Corporate Trust Administration department with direct responsibility for the
administration of the Indenture and also means, with respect to a particular
corporate trust matter, any other officer of the Debenture Trustee to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Securities" shall mean the Corporation's [_____]% Junior Subordinated
Deferrable Interest Debentures due [_____________ ___], 2028, Series A, as
authenticated and issued under this Indenture.
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<PAGE> 15
"Securityholder," "holder of Securities," or other similar terms, shall
mean any Person in whose name at the time a particular Security is registered in
the Security Register kept by the Corporation or the Debenture Trustee for that
purpose in accordance with the terms of this Indenture.
"Security Register" shall mean (i) prior to a Dissolution Event, the
list of holders provided to the Debenture Trustee pursuant to Section 4.01, and
(ii) following a Dissolution Event, any security register maintained by a
security registrar for the Securities appointed by the Corporation following the
execution of a supplemental indenture providing for transfer procedures as
provided for in Section 2.07(a).
"Senior Indebtedness" shall mean the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to Hamilton whether or not
such claim for post petition interest is allowed in such proceedings), on all
Indebtedness, whether outstanding on the date of execution of this Indenture, or
hereafter created, assumed or incurred, except Indebtedness Ranking on a Parity
with the Securities or Indebtedness Ranking Junior to the Securities, and any
deferrals, renewals or extensions of such Senior Indebtedness.
"Special Event" shall mean an Investment Company Event, a Regulatory
Capital Event or a Tax Event, as the context requires.
"Subsidiary" shall mean with respect to any Person, (i) any corporation
at least a majority of the outstanding voting stock of which is owned, directly
or indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture, limited liability company or similar entity, at least a majority of
whose outstanding partnership, membership or similar interests shall at the time
be owned by such Person or by one or more of its Subsidiaries, or by such Person
and one or more of its Subsidiaries and (iii) any limited partnership of which
such Person or any of its Subsidiaries is a general partner. For the purposes of
this definition, "voting stock" means shares, interests, participations or other
equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
"Tax Event" shall mean the receipt by the Trust and the Corporation of
an opinion of independent tax counsel experienced in such matters to the effect
that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws or any regulations thereunder of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of original issuance of the Securities, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the Securities, (ii) the interest payable by the Corporation on the
Securities is not, or within 90 days of the date of such opinion will not be,
deductible by the Corporation, in whole or in part, for United States federal
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income tax purposes or (iii) the Trust is, or will be within 90 days of the date
of such opinion, subject to more than a de minimis amount of other taxes, duties
or other governmental charges.
"Trust" shall mean Hamilton Capital Trust I, a Delaware business trust
created for the purpose of issuing its undivided beneficial interests in
connection with the issuance of Securities under this Indenture.
"Trust Securities" shall mean, collectively, the Capital Securities and
the Common Securities.
"Underwriting Agreement" shall mean the Underwriting Agreement, dated
as of December [__], 1998, by and among the Corporation, the Trust and the
Underwriters named therein.
"U.S. Government Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii), are not callable or prepayable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction with respect to the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
SECTION 1.02 Business Day Certificate.
On the date of execution and delivery of this Indenture (with respect
to the remainder of calendar year 1998 and for calendar year 1999) and within 15
days prior to the end of each calendar year while this Indenture remains in
effect (with respect to succeeding calendar years), the Corporation shall
deliver to the Debenture Trustee an Officers' Certificate specifying the days on
which banking institutions or trust companies in Wilmington, Delaware, New York,
New York or Miami, Florida are then authorized or obligated by law or executive
order to remain closed.
ARTICLE II
SECURITIES
SECTION 2.01 Forms Generally.
The Securities and the Debenture Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto, the terms
of which are incorporated in and made a part of this Indenture. The Securities
may have notations, legends or endorsements required by law, stock
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exchange rule, agreements to which the Corporation is subject or usage. Each
Security shall be dated the date of its authentication.
SECTION 2.02 Execution and Authentication.
An Officer shall sign the Securities for the Corporation by manual or
facsimile signature. If an Officer whose signature is on a Security no longer
holds that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Debenture Trustee. The signature of the Debenture Trustee shall
be conclusive evidence that the Security has been authenticated under this
Indenture.
The Debenture Trustee shall, upon a Corporation Order, authenticate for
original issue up to, and the aggregate principal amount of Securities
outstanding at any time may not exceed, $35,567,050 aggregate principal amount
of the Securities, except as provided in Sections 2.07, 2.08, 2.09 and 14.05.
SECTION 2.03 Form and Payment.
Except as provided in Section 2.04, the Securities shall be issued in
fully registered certificated form without interest coupons. Principal of and
interest on the Securities issued in certificated form will be payable, the
transfer of such Securities will be registrable and such Securities will be
exchangeable for Securities bearing identical terms and provisions, at the
office or agency of the Corporation maintained for such purpose under Section
3.02; provided, however, that payments of interest may be made at the option of
the Corporation (i) by check mailed to the holder at such address as shall
appear in the Security Register, or (ii) by transfer to an account maintained by
the Person entitled thereto, provided that proper transfer instructions have
been received in writing by the relevant record date. Notwithstanding the
foregoing, so long as the holder of any Securities is the Property Trustee, the
payment of the principal of and interest (including Compounded Interest and
Additional Sums, if any) on such Securities held by the Property Trustee will be
made at such place and to such account as may be designated by the Property
Trustee.
SECTION 2.04 Global Security.
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry form
("Book-Entry Capital Securities"), a Like Amount of Definitive Securities shall
be presented to the Debenture Trustee (if an arrangement with the Depositary has
been maintained) by the Property Trustee in exchange for one or more Global
Securities (as may be required pursuant to Section 2.07), to be registered in
the name of the Depositary, or its nominee, and delivered by the Debenture
Trustee to the Depositary for crediting to the accounts of its participants
pursuant to the instructions of the Administrative Trustees; the Corporation
upon any such presentation shall execute one or more Global Securities in such
aggregate principal amount and deliver the same to the Debenture Trustee for
authentication
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and delivery in accordance with this Indenture; and payments on the Securities
issued as a Global Security will be made to the Depositary; and
(ii) if any Capital Securities are held in certificated form,
the related Definitive Securities may be presented to the Debenture Trustee, by
the Property Trustee and any Capital Security certificates which represent
Capital Securities other than Book-Entry Capital Securities ("Non Book-Entry
Capital Securities") will be deemed to represent beneficial interests in
Securities presented to the Debenture Trustee by the Property Trustee having an
aggregate principal amount equal to the aggregate liquidation amount of the Non
Book-Entry Capital Securities until such Capital Security certificates are
presented to the security registrar for the Securities for transfer or
reissuance, at which time such Capital Security certificates will be canceled,
and a Security in a Like Amount, registered in the name of the holder of the
Capital Security certificate or the transferee of the holder of such Capital
Security certificate, as the case may be, will be executed by the Corporation
and delivered to the Debenture Trustee for authentication and delivery in
accordance with this Indenture; and upon the issuance of such Securities,
Securities with an equivalent aggregate principal amount that were presented by
the Property Trustee to the Debenture Trustee will be canceled.
(b) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided, however,
that the aggregate principal amount of outstanding Securities represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and prepayments. Any endorsement of a Global Security to
reflect the amount of any increase or decrease in the aggregate principal amount
of outstanding Securities represented thereby shall be made by the Debenture
Trustee, in accordance with instructions given by the Corporation as required by
this Section 2.05.
(c) The Global Securities may be transferred, in whole but not in part,
only to the Depositary, to another nominee of the Depositary, or to a successor
Depositary selected or approved by the Corporation or to a nominee of such
successor Depositary.
(d) If at any time the Depositary notifies the Corporation that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to be
a Clearing Agency registered under the Exchange Act, and, in each case, a
successor Depositary is not appointed by the Corporation within 90 days after
the Corporation receives such notice or becomes aware of such condition, as the
case may be, the Corporation will execute, and the Debenture Trustee, upon
receipt of a Corporation Order, will authenticate and make available for
delivery the Definitive Securities, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Security,
in exchange for such Global Security. If there is a Default or an Event of
Default, the Depositary shall have the right to exchange the Global Securities
for Definitive Securities. In addition, the Corporation may at any time
determine that the Securities shall no longer be represented by a Global
Security. In the event of such an Event of Default or such a determination, the
Corporation shall execute, and subject to Section 2.07, the Debenture Trustee,
upon receipt of an Officers' Certificate evidencing such determination by the
Corporation and a Corporation Order, will authenticate and make available for
delivery the Definitive Securities, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global
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Security, in exchange for such Global Security. Upon the exchange of the Global
Security for such Definitive Securities, in authorized denominations, the Global
Security shall be canceled by the Debenture Trustee. Such Definitive Securities
issued in exchange for the Global Security shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Debenture Trustee. The Debenture Trustee shall deliver such Definitive
Securities to the Depositary for delivery to the Persons in whose names such
Definitive Securities are so registered.
SECTION 2.05 Interest.
(a) Each Security will bear interest, at the rate of [___]% per annum
(the "Coupon Rate"), from the most recent date to which interest has been paid
or duly provided for or, if no interest has been paid or duly provided for, from
December [__], 1998, until the principal thereof becomes due and payable, and at
the Coupon Rate on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest, compounded quarterly, payable (subject to the provisions of Article
XVI) quarterly in arrears on March 31, June 30, September 30 and December 31, of
each year, commencing March 31, 1999 (each, an "Interest Payment Date"), to the
Person in whose name such Security or any predecessor Security is registered at
the close of business on the regular record date for such interest installment,
which shall be one Business Day prior to the relevant Interest Payment Date for
Global Securities and the 15th day of the month in which the relevant Interest
Payment Date falls for Definitive Securities.
(b) The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year consisting of twelve 30-day months.
(c) During such time as the Property Trustee is the holder of any
Securities, the Corporation shall pay any additional amounts on the Securities
as may be necessary in order that the amount of Distributions then due and
payable by the Trust on the outstanding Trust Securities shall not be reduced as
a result of any additional taxes, duties and other governmental charges to which
the Trust has become subject as a result of a Tax Event ("Additional Sums").
SECTION 2.06 Transfer and Exchange.
(a) Transfer Restrictions.
(i) The Securities may not be transferred except in compliance with
the legend contained in Exhibit A unless otherwise determined by the Corporation
in accordance with applicable law. Upon any distribution of the Securities
following a Dissolution Event, the Corporation and the Debenture Trustee shall
enter into a supplemental indenture pursuant to Section 9.01 to provide for the
transfer procedures with respect to the Securities substantially similar to
those contained in the Declaration to the extent applicable in the circumstances
existing at such time.
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(ii) The Securities will be issued and may be transferred only
in blocks having an aggregate principal amount of not less than $25 and in
multiples of $25 in excess thereof. Any attempted transfer of the Securities in
a block having an aggregate principal amount of less than $25 shall be deemed to
be voided and of no legal effect whatsoever. Any such purported transferee shall
be deemed not to be a holder of such Securities for any purpose, including, but
not limited to the receipt of payments on such Securities, and such purported
transferee shall be deemed to have no interest whatsoever in such Securities.
(b) General Provisions Relating to Transfers and Exchanges. To permit
registrations of transfers and exchanges, the Corporation shall execute and the
Debenture Trustee shall authenticate Definitive Securities and Global Securities
at the request of the security registrar for the Securities. All Definitive
Securities and Global Securities issued upon any registration of transfer or
exchange of Definitive Securities or Global Securities shall be the valid
obligations of the Corporation, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Definitive Securities or Global
Securities surrendered upon such registration of transfer or exchange.
No service charge shall be made to a holder for any registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith.
The Corporation shall not be required to: (i) issue, register the
transfer of or exchange Securities during a period beginning at the opening of
business 15 days before the day of mailing of a notice of prepayment or any
notice of selection of Securities for prepayment under Article XIV hereof and
ending at the close of business on the day of such mailing; or (ii) register the
transfer of or exchange any Security so selected for prepayment in whole or in
part, except the nonprepaid portion of any Security being prepaid in part.
Prior to due presentment for the registration of a transfer of any
Security, the Debenture Trustee, the Corporation and any agent of the Debenture
Trustee or the Corporation may deem and treat the Person in whose name any
Security is registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Securities, and none of
the Debenture Trustee, the Corporation or any agents of the Debenture Trustee or
the Corporation shall be affected by notice to the contrary.
SECTION 2.07 Replacement Securities.
If any mutilated Security is surrendered to the Debenture Trustee, or
the Corporation and the Debenture Trustee receive evidence to their satisfaction
of the destruction, loss or theft of any Security, the Corporation shall issue
and the Debenture Trustee shall authenticate a replacement Security if the
Debenture Trustee's requirements for replacements of Securities are met. An
indemnity bond must be supplied by the holder that is sufficient in the judgment
of the Debenture Trustee and the Corporation to protect the Corporation, the
Debenture Trustee, any agent thereof or any authenticating agent from any loss
that any of them may suffer if a Security is replaced. The Corporation or the
Debenture Trustee may charge for its expenses in replacing a Security.
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Every replacement Security is an obligation of the Corporation and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
SECTION 2.08 Temporary Securities.
Pending the preparation of Definitive Securities, the Corporation may
execute, and upon Corporation Order the Debenture Trustee shall authenticate and
make available for delivery, temporary Securities that are printed,
lithographed, typewritten, mimeographed or otherwise reproduced, in any
authorized denomination, substantially of the tenor of the Definitive Securities
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 conclusively evidenced by their execution of such
Securities.
If temporary Securities are issued, the Corporation shall cause
Definitive Securities to be prepared without unreasonable delay. The Definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
Officers executing such Definitive Securities. 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 maintained by the Corporation for such purpose pursuant to Section
3.02 hereof, without charge to the holder thereof. Upon surrender for
cancellation of any one or more temporary Securities, the Corporation shall
execute, and the Debenture Trustee shall authenticate and make available for
delivery, in exchange therefor the same aggregate principal amount of Definitive
Securities of authorized denominations. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as Definitive Securities.
SECTION 2.09 Cancellation.
The Corporation at any time may deliver Securities to the Debenture
Trustee for cancellation. The Debenture Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall return such canceled Securities to the
Corporation. The Corporation may not issue new Securities to replace Securities
that have been prepaid or paid or that have been delivered to the Debenture
Trustee for cancellation.
SECTION 2.10 Defaulted Interest.
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the holder on the
relevant regular record date by virtue of having been such holder; and such
Defaulted Interest shall be paid by the Corporation, at its election, as
provided in clause (a) or clause (b) below:
(a) The Corporation may make payment of any Defaulted Interest
on Securities to the Persons in whose names such Securities (or their
respective Predecessor Securities)
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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 Corporation shall notify the Debenture Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
such Security and the date of the proposed payment, and at the same
time the Corporation shall deposit with the Debenture 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 Debenture 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 Debenture Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall not
be more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Debenture
Trustee of the notice of the proposed payment. The Debenture Trustee
shall promptly notify the Corporation of such special record date and,
in the name and at the expense of the Corporation, 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
Securityholder at his or her address as it appears in the Security
Register, not less than 10 days prior to 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 such
Securities (or their respective Predecessor Securities) are registered
on such special record date and shall be no longer payable pursuant to
the following clause (b).
(b) The Corporation may make payment of any Defaulted Interest
on any Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Corporation to the Debenture Trustee of the
proposed payment pursuant to this clause, such manner of payment shall
be deemed practicable by the Debenture Trustee.
SECTION 2.11 CUSIP Numbers.
The Corporation in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Debenture Trustee shall use "CUSIP"
numbers in notices of prepayment as a convenience to Securityholders; provided,
however, that any such notice 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 a prepayment and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such prepayment shall
not be affected by any defect in or omission of such numbers. The Corporation
will promptly notify the Debenture Trustee of any change in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 3.01 Payment of Principal and Interest.
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The Corporation covenants and agrees for the benefit of the holders of
the Securities that it will duly and punctually pay or cause to be paid the
principal of and interest on the Securities at the place, at the respective
times and in the manner provided herein. The Corporation further covenants to
pay any and all amounts due in respect of the Securities, including, without
limitation, Additional Sums, as may be required pursuant to Section 2.06(c) and
Compounded Interest, as may be required pursuant to Section 16.01.
SECTION 3.02 Offices for Notices and Payments, etc.
So long as any of the Securities remain outstanding, the Corporation
will maintain in Wilmington, Delaware an office or agency where the Securities
may be presented for payment, an office or agency where the Securities may be
presented for registration of transfer and for exchange as in this Indenture
provided and an office or agency where notices and demands to or upon the
Corporation in respect of the Securities or this Indenture may be served. The
Corporation will give to the Debenture Trustee written notice of the location of
any such office or agency and of any change of location thereof. Until otherwise
designated from time to time by the Corporation in a notice to the Debenture
Trustee, any such office or agency for all of the above purposes shall be the
Principal Office of the Debenture Trustee. In case the Corporation shall fail to
maintain any such office or agency in Wilmington, Delaware or shall fail to give
such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the Principal
Office of the Debenture Trustee.
In addition to any such office or agency, the Corporation may from time
to time designate one or more offices or agencies outside Wilmington, Delaware
where the Securities may be presented for payment, for registration of transfer
and for exchange and where notices and demands to or upon the Corporation in
respect of the Securities or this Indenture may be served in the manner provided
in this Indenture, and the Corporation may from time to time rescind such
designation, as the Corporation may deem desirable or expedient; provided,
however, that no such designation or rescission shall in any manner relieve the
Corporation of its obligation to maintain any such office or agency in
Wilmington, Delaware for the purposes above mentioned. The Corporation will give
to the Debenture Trustee prompt written notice of any such designation or
rescission thereof.
SECTION 3.03 Appointments to Fill Vacancies in Debenture Trustee's
Office.
The Corporation, whenever necessary to avoid or fill a vacancy in the
office of Debenture Trustee, will appoint, in the manner provided in Section
6.10, a Debenture Trustee, so that there shall at all times be a Debenture
Trustee hereunder.
SECTION 3.04 Provision as to Paying Agent.
(a) If the Corporation shall appoint a paying agent other than the
Debenture Trustee with respect to the Securities, it will cause such paying
agent to execute and deliver to the Debenture Trustee an instrument in which
such agent shall agree with the Debenture Trustee, subject to the provisions of
this Section 3.04,
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(1) that it will hold all sums held by it as such agent for the
payment of the principal of or interest on the Securities
(whether such sums have been paid to it by the Corporation or
by any other obligor on the Securities) in trust for the
benefit of the holders of the Securities; and
(2) that it will give the Debenture Trustee notice of any failure
by the Corporation (or by any other obligor on the Securities)
to make any payment of the principal of or interest (including
Additional Sums and Compounded Interest, if any) on the
Securities when the same shall be due and payable.
(b) If the Corporation shall act as its own paying agent, it will, on
or before each due date of the principal of or interest on the Securities, set
aside, segregate and hold in trust for the benefit of the holders of the
Securities a sum sufficient to pay such principal or interest so becoming due
and will notify the Debenture Trustee of any failure to take such action and of
any failure by the Corporation (or by any other obligor under the Securities) to
make any payment of the principal of or interest on the Securities when the same
shall become due and payable.
(c) Anything in this Section 3.04 to the contrary notwithstanding, the
Corporation may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Securities hereunder, or for any other reason, pay
or cause to be paid to the Debenture Trustee all sums payable with respect to
the Securities, such sums to be held by the Debenture Trustee upon the trusts
herein contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.04 is subject to
Sections 11.03 and 11.04.
SECTION 3.05 Certificate to Debenture Trustee.
The Corporation will deliver to the Debenture Trustee on or before 120
days after the end of each fiscal year of the Corporation, commencing with the
first fiscal year ending after the date hereof, so long as Securities are
outstanding hereunder, an Officers' Certificate, one of the signers of which
shall be the principal executive, principal financial or principal accounting
officer of the Corporation, stating that in the course of the performance by the
signers of their duties as officers of the Corporation they would normally have
knowledge of any Default by the Corporation in the performance of any covenants
contained herein, stating whether or not they have knowledge of any such Default
and, if so, specifying each such Default of which the signers have knowledge,
the nature thereof and the action, if any, the Corporation intends to undertake
as a result of such Default.
SECTION 3.06 Compliance with Consolidation Provisions.
The Corporation will not, while any of the Securities remain
outstanding, consolidate with, or merge into, or merge into itself, or sell or
convey all or substantially all of its property to any other Person unless the
provisions of Article X hereof are complied with.
SECTION 3.07 Limitation on Dividends.
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If (1) there shall have occurred any event of which the Corporation has
actual knowledge that (a) is a Default or an Event of Default and (b) in respect
of which the Corporation shall not have taken reasonable steps to cure, (2) if
the Securities are held by the Property Trustee, the Corporation shall be in
default with respect to its payment of any obligations under the Capital
Securities Guarantee or (3) the Corporation shall have given notice of its
election to exercise its right to commence an Extended Interest Payment Period
and shall not have rescinded such notice, and such Extended Interest Payment
Period or any extension thereof shall have commenced and be continuing, the
Corporation will not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock, (ii) make any payment of principal of or
premium, if any, or interest on or repay, repurchase or redeem any debt
securities of the Corporation (including Other Debentures) that rank pari passu
with or junior in right of payment to the Securities or (iii) make any guarantee
payments with respect to any guarantee (other than the Capital Securities
Guarantee) by the Corporation of the debt securities of any Subsidiary of the
Corporation (including Other Guarantees) if such guarantee ranks pari passu with
or junior in right of payment to the Securities (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, Common Stock), (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock, (d) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged and (e) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Corporation's benefit or
compensation plans for its directors, officers or employees or any of the
Corporation's dividend reinvestment plans).
SECTION 3.08 Covenants as to Hamilton Capital Trust I
In the event Securities are issued to the Trust or a trustee of such
Trust in connection with the issuance of Trust Securities by the Trust, for so
long as such Trust Securities remain outstanding, the Corporation (i) will
maintain 100% direct or indirect ownership of the Common Securities of the
Trust; provided, however, that any successor of the Corporation, permitted
pursuant to Article X, may succeed to the Corporation's ownership of such Common
Securities, (ii) will use commercially reasonable efforts to cause the Trust (a)
to remain a business trust, except in connection with a distribution of
Securities to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities of the Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and (b)
not to be classified as an association taxable as a corporation and to be
classified as a grantor trust, in each case for United States federal income tax
purposes, (iii) will use commercially reasonable efforts to cause each holder of
the Trust Securities to be treated as owning an undivided beneficial interest in
the Securities and (iv) will not cause, as sponsor of the Trust, or permit, as
holder of the Common Securities, the dissolution, winding-up or liquidation of
the Trust, except as provided in the Declaration.
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SECTION 3.09 Payment of Expenses.
In connection with the offering, sale and issuance of the Securities to
the Trust and in connection with the sale of the Trust Securities by the Trust,
the Corporation, in its capacity as borrower with respect to the Securities,
shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Securities and compensation of the Debenture
Trustee in accordance with the provisions of Section 6.06;
(b) pay all costs and expenses of the Trust, including, but not
limited to, costs and expenses relating to the organization of
the Trust, the registration, offering, sale and issuance of
the Trust Securities (including commissions payable to the
Underwriters pursuant to the Underwriting Agreement in
connection therewith), the fees and expenses of the Property
Trustee and the Delaware Trustee, the costs and expenses
relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses and costs
and expenses incurred in connection with the acquisition,
financing, and disposition of assets of the Trust;
(c) be primarily and fully liable for any indemnification
obligations arising with respect to the Declaration;
(d) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of
the Trust; and
(e) pay all other fees, expenses, debts and obligations (other
than in respect of the Trust Securities) related to the Trust.
SECTION 3.10 Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or resignation of the
Debenture Trustee, unless otherwise stated, the Corporation shall pay to the
Debenture Trustee all amounts accrued and owing to the Debenture Trustee to the
date of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Property Trustee, as the case may be, pursuant to Section 5.7 of the
Declaration, the Corporation shall pay to the Delaware Trustee or the Property
Trustee, as the case may be, all amounts accrued and owing to such trustee(s) to
the date of such termination, removal or resignation.
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ARTICLE IV
LIST OF SECURITYHOLDERS AND REPORTS BY THE
CORPORATION AND THE DEBENTURE TRUSTEE
SECTION 4.01 List of Securityholders.
The Corporation covenants and agrees that it will furnish or cause to
be furnished to the Debenture Trustee:
(a) on a quarterly basis on each regular record date for the
Securities, a list, in such form as the Debenture Trustee may
reasonably require, of the names and addresses of the
Securityholders as of such record date; and
(b) at such other times as the Debenture Trustee may request in
writing, within 30 days after the receipt by the Corporation,
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,
except that, no such lists need be furnished so long as the Debenture Trustee is
in possession thereof by reason of its acting as security registrar for the
Securities.
SECTION 4.02 Preservation and Disclosure of Lists.
(a) The Debenture Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of the Securities (1) contained in the most recent list furnished to it
as provided in Section 4.01 or (2) received by it in the capacity of security
registrar (if so acting) hereunder. The Debenture Trustee may destroy any list
furnished to it as provided in Section 4.01 upon receipt of a new list so
furnished.
(b) In case three or more holders of Securities (hereinafter referred
to as "applicants") apply in writing to the Debenture Trustee and furnish to the
Debenture Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
holders of Securities or with holders of all Securities with respect to their
rights under this Indenture and is accompanied by a copy of the form of proxy or
other communication which such applicants propose to transmit, then the
Debenture Trustee shall within five Business Days after the receipt of such
application, at its election, either:
(1) afford such applicants access to the information
preserved at the time by the Debenture Trustee in
accordance with the provisions of subsection (a) of
this Section 4.02, or
(2) inform such applicants as to the approximate number
of holders of all Securities whose names and
addresses appear in the information preserved at the
time by the Debenture Trustee in accordance with the
provisions of subsection (a) of this Section 4.02,
and as to the approximate cost of mailing
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to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Debenture Trustee shall elect not to afford such applicants
access to such information, the Debenture Trustee shall, upon the written
request of such applicants, mail to each Securityholder whose name and address
appear in the information preserved at the time by the Debenture Trustee in
accordance with the provisions of subsection (a) of this Section 4.02 a copy of
the form of proxy or other communication which is specified in such request with
reasonable promptness after a tender to the Debenture Trustee of the material to
be mailed and of payment, or provision for the payment, of the reasonable
expenses of mailing, unless within five Business Days after such tender, the
Debenture Trustee shall mail to such applicants and file with the Commission,
together with a copy of the material to be mailed, a written statement to the
effect that, in the opinion of the Debenture Trustee, such mailing would be
contrary to the best interests of the holders of Securities or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Debenture Trustee shall mail
copies of such material to all such Securityholders with reasonable promptness
after the entry of such order and the renewal of such tender; otherwise the
Debenture Trustee shall be relieved of any obligation or duty to such applicants
respecting their application.
(c) Each and every holder of Securities, by receiving and holding the
same, agrees with the Corporation and the Debenture Trustee that neither the
Corporation nor the Debenture Trustee nor any paying agent shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Securities in accordance with the provisions of
subsection (b) of this Section 4.02, regardless of the source from which such
information was derived, and that the Debenture Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
said subsection (b).
SECTION 4.03 Reports by the Corporation.
(a) The Corporation covenants and agrees to file with the Debenture
Trustee, within 15 days after the date on which the Corporation is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as said Commission may from time to time by rules and regulations
prescribe) which the Corporation may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the
Corporation is not required to file information, documents or reports pursuant
to either of such sections, then to provide to the Debenture Trustee, such of
the supplementary and periodic information, documents and reports which would
have been required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations. The Corporation also
covenants and agrees to comply with the provisions of Section 314(a) of the
Trust Indenture Act.
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(b) The Corporation covenants and agrees to file with the Debenture
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by said Commission, such additional information,
documents and reports with respect to compliance by the Corporation with the
conditions and covenants provided for in this Indenture as may be required from
time to time by such rules and regulations.
(c) The Corporation covenants and agrees to transmit by mail to all
holders of Securities, as the names and addresses of such holders appear upon
the Security Register, within 30 days after the filing thereof with the
Debenture Trustee, such summaries of any information, documents and reports
required to be filed by the Corporation pursuant to subsections (a) and (b) of
this Section 4.03 as may be required by rules and regulations prescribed from
time to time by the Commission.
(d) Delivery of such reports, information and documents to the
Debenture Trustee is for informational purposes only and the Debenture Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Corporation's compliance with any of its covenants hereunder (as to which
the Debenture Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 4.04 Reports by the Debenture Trustee.
(a) The Debenture Trustee shall transmit to Securityholders such
reports concerning the Debenture 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. If required by Section 313(a) of the Trust
Indenture Act, the Debenture Trustee shall, within 60 days after May 15, 1999,
and no later than May 15 in each succeeding year, deliver to Securityholders a
brief report, dated as of each such date which complies with the provisions of
such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Debenture Trustee with each stock exchange,
if any, upon which the Securities are listed, with the Commission and with the
Corporation. The Corporation will promptly notify the Debenture Trustee when the
Securities are listed on any stock exchange.
ARTICLE V
REMEDIES OF THE DEBENTURE TRUSTEE AND
SECURITYHOLDERS UPON EVENT OF DEFAULT
SECTION 5.01 Events of Default.
One or more of the following events of default shall constitute an
Event of Default hereunder (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
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(a) default in the payment of any interest (including Compounded
Interest and Additional Sums, if any) on the Securities or any
Other Debentures (about which a Responsible Officer of the
Debenture Trustee has actual knowledge) when due, and
continuance of such default for a period of 30 days; provided,
however, that a valid extension of an interest payment period
by the Corporation in accordance with the terms hereof or
thereof shall not constitute a default in the payment of
interest for this purpose; or
(b) default in the payment of any principal of the Securities or
any Other Debentures (about which a Responsible Officer of the
Debenture Trustee has actual knowledge) when due, whether at
maturity, upon prepayment, by declaration of acceleration of
maturity or otherwise; or
(c) default in the performance, or breach in any material respect,
of any covenant or warranty of the Corporation in this
Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or
breach for a period of 90 days after there has been given, by
registered or certified mail, to the Corporation by the
Debenture Trustee or to the Corporation and the Debenture
Trustee by the holders of at least 25% in aggregate principal
amount of the outstanding 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
(d) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Corporation in an
involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or appointing
a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Corporation or for
any substantial part of its property, or ordering the
winding-up or liquidation of its affairs and such decree or
order shall remain unstayed and in effect for a period of 90
consecutive days; or
(e) the Corporation shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law, or shall
consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Corporation or
of any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due.
If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Debenture
Trustee or the holders of not less than 25% in aggregate principal amount of the
Securities then outstanding may declare the principal amount of all Securities
to be due and payable immediately, by a notice in writing to the Corporation
(and to the Debenture Trustee if given by the holders of the outstanding
Securities), and upon any such declaration the same shall become immediately due
and payable.
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The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Securities shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, (i)
the Corporation shall pay or shall deposit with the Debenture Trustee a sum
sufficient to pay (A) all matured installments of interest (including Compounded
Interest and Additional Sums, if any) on all the Securities and the principal of
any and all Securities which shall have become due otherwise than by
acceleration (with interest upon such principal and, to the extent that payment
of such interest is enforceable under applicable law, on overdue installments of
interest, at the same rate as the rate of interest specified in the Securities
to the date of such payment or deposit) and (B) such amount as shall be
sufficient to cover compensation and expenses due to the Debenture Trustee and
each predecessor Debenture Trustee, their respective agents, attorneys and
counsel, pursuant to Section 6.06, and (ii) any and all Events of Default under
the Indenture, other than the non-payment of the principal of the Securities
which shall have become due solely by such declaration of acceleration, shall
have been cured, waived or otherwise remedied as provided herein, then, in every
such case, the holders of a majority in aggregate principal amount of the
Securities then outstanding, by written notice to the Corporation and to the
Debenture Trustee, may rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or shall impair any right consequent thereon.
In case the Debenture Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Debenture Trustee, then and in every
such case the Corporation, the Debenture Trustee and the holders of the
Securities shall be restored respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the Corporation, the Debenture
Trustee and the holders of the Securities shall continue as though no such
proceeding had been taken.
SECTION 5.02 Payment of Securities on Default; Suit Therefor.
The Corporation covenants that (a) in case default shall be made in the
payment of any installment of interest (including Compounded Interest and
Additional Sums, if any) on any of the Securities as and when the same shall
become due and payable, and such default shall have continued for a period of 30
days, or (b) in case default shall be made in the payment of the principal of
any of the Securities as and when the same shall have become due and payable,
whether at maturity of the Securities or upon prepayment or by declaration or
otherwise, then, upon demand of the Debenture Trustee, the Corporation will pay
to the Debenture Trustee, for the benefit of the holders of the Securities, the
whole amount that then shall have become due and payable on all such Securities
for principal or interest (including Compounded Interest and Additional Sums, if
any) or both, as the case may be, with interest upon the overdue principal and
(to the extent that payment of such interest is enforceable under applicable law
and, if the Securities are held by the Trust or a trustee of such Trust, without
duplication of any other amounts paid by the Trust or a trustee in respect
thereof) upon the overdue installments of interest (including Compounded
Interest and Additional Sums, if any) at the rate borne by the Securities; and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable
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compensation to the Debenture Trustee, its agents, attorneys and counsel, and
any other amount due to the Debenture Trustee pursuant to Section 6.06.
In case the Corporation shall fail forthwith to pay such amounts upon
such demand, the Debenture Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Corporation or any other
obligor on the Securities and collect in the manner provided by law out of the
property of the Corporation or any other obligor on the Securities, wherever
situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Corporation or any other obligor on the Securities
under Title 11, United States Code, or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the
Corporation or such other obligor, or in the case of any other similar judicial
proceedings relative to the Corporation or other obligor upon the Securities, or
to the creditors or property of the Corporation or such other obligor, the
Debenture Trustee, irrespective of whether the principal of the Securities shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Debenture Trustee shall have made any demand
pursuant to the provisions of this Section 5.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal and interest owing and unpaid
in respect of the Securities and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Debenture Trustee (including any
claim for amounts due to the Debenture Trustee pursuant to Section 6.06) and of
the Securityholders allowed in such judicial proceedings relative to the
Corporation or any other obligor on the Securities, or to the creditors or
property of the Corporation or such other obligor, unless prohibited by
applicable law and regulations, to vote on behalf of the holders of the
Securities in any election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency proceedings or
person performing similar functions in comparable proceedings, and to collect
and receive any moneys or other property payable or deliverable on any such
claims, and to distribute the same after the deduction of its charges and
expenses; and any receiver, assignee or trustee in bankruptcy or reorganization
is hereby authorized by each of the Securityholders to make such payments to the
Debenture Trustee, and, in the event that the Debenture Trustee shall consent to
the making of such payments directly to the Securityholders, to pay to the
Debenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to, and expenses of, the Debenture Trustee, each predecessor
Debenture Trustee and their respective agents, attorneys and counsel, and all
other amounts due to the Debenture Trustee pursuant to Section 6.06.
Nothing herein contained shall be construed to authorize the Debenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any holder thereof or to
authorize the Debenture Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.
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All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Debenture Trustee without
the possession of any of the Securities, or the production thereof on any trial
or other proceeding relative thereto, and any such suit or proceeding instituted
by the Debenture Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit of
the holders of the Securities.
In any proceedings brought by the Debenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Debenture Trustee shall be a party), the Debenture Trustee shall be
held to represent all the holders of the Securities, and it shall not be
necessary to make any holders of the Securities parties to any such proceedings.
SECTION 5.03 Application of Moneys Collected by Debenture Trustee.
Any moneys collected by the Debenture Trustee shall be applied in the
following order, at the date or dates fixed by the Debenture Trustee for the
distribution of such moneys, upon presentation of the Securities in respect of
which moneys have been collected, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection applicable to
the Securities and all other amounts due to the Debenture Trustee under Section
6.06;
Second: To the payment of all Senior Indebtedness of the Corporation if
and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon
Securities for principal of and interest (including Compounded Interest and
Additional Sums, if any) on the Securities, in respect of which or for the
benefit of which money has been collected, ratably, without preference of
priority of any kind, according to the amounts due on such Securities for
principal and interest, respectively; and
Fourth: To the Corporation.
SECTION 5.04 Proceedings by Securityholders.
No holder of any Security shall have any right by virtue of or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Debenture
Trustee written notice of an Event of Default and of the continuance thereof
with respect to the Securities specifying such Event of Default, as hereinbefore
provided, and unless also the holders of not less than 25% in aggregate
principal amount of the Securities then outstanding shall have made written
request upon the Debenture Trustee to institute such action, suit or proceeding
in its own name as Debenture Trustee hereunder and shall have offered to the
Debenture Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the
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Debenture Trustee for 60 days after its receipt of such notice, request and
offer of indemnity shall have failed to institute any such action, suit or
proceeding, it being understood and intended, and being expressly covenanted by
the taker and holder of every Security with every other taker and holder and the
Debenture Trustee, that no one or more holders of Securities shall have any
right in any manner whatever by virtue of or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Securities, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Securities.
Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Security to receive payment of the principal of and
interest on (including Compounded Interest and Additional Sums, if any) on such
Security, on or after the same shall have become due and payable, or to
institute suit for the enforcement of any such payment, shall not be impaired or
affected without the consent of such holder, and by accepting a Security
hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Security with every other such taker and holder and the
Debenture Trustee, that no one or more holders of Securities shall have any
right in any manner whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any other
Securities, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Securities. For the protection and enforcement of the provisions of
this Section, each and every Securityholder and the Debenture Trustee shall be
entitled to such relief as can be given either at law or in equity.
The Corporation and the Debenture Trustee acknowledge that pursuant to
the Declaration, the holders of Capital Securities are entitled, in the
circumstances and subject to the limitations set forth therein, to commence a
Direct Action with respect to any Event of Default referred to in clause (a) or
(b) of Section 5.01.
SECTION 5.05 Proceedings by Debenture Trustee.
In case an Event of Default occurs with respect to Securities and is
continuing, the Debenture Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Debenture Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or by
proceeding in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Debenture Trustee by this Indenture or by law.
SECTION 5.06 Remedies Cumulative and Continuing.
All powers and remedies given by this Article V to the Debenture
Trustee or to the Securityholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any other powers and remedies available
to the Debenture Trustee or the holders of the Securities, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and
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agreements contained in this Indenture or otherwise established with respect to
the Securities, and no delay or omission of the Debenture Trustee or of any
holder of any of the Securities to exercise any right or power accruing upon any
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 5.04, every
power and remedy given by this Article V or by law to the Debenture Trustee or
to the Securityholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Debenture Trustee or by the Securityholders.
SECTION 5.07 Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.
The holders of a majority in aggregate principal amount of the
Securities at the time outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee; provided, however, that (subject to the provisions of Section 6.01) the
Debenture Trustee shall have the right to decline to follow any such direction
if the Debenture Trustee shall determine that the action so directed would be
unjustly prejudicial to the holders not taking part in such direction or if the
Debenture Trustee being advised by counsel determines that the action or
proceeding so directed may not lawfully be taken or if the Debenture Trustee in
good faith by one of its Responsible Officers shall determine that the action or
proceedings so directed would involve the Debenture Trustee in personal
liability. Prior to any declaration accelerating the maturity of the Securities,
the holders of a majority in aggregate principal amount of the Securities at the
time outstanding may on behalf of the holders of all of the Securities waive any
past Default or Event of Default and its consequences except a Default (a) in
the payment of principal of or interest on (including Compounded Interest and
Additional Sums, if any) any of the Securities (unless such default has been
cured and a sum sufficient to pay all matured installments of interest
(including Compounded Interest and Additional Sums, if any) and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
(b) in respect of covenants or provisions hereof which cannot be modified or
amended without the consent of the holder of each Security affected; provided,
however, that if the Securities are held by the Property Trustee, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in aggregate liquidation amount of Trust Securities shall have
consented to such waiver or modification to such waiver; provided, further, that
if the consent of the holder of each outstanding Security is required, such
waiver shall not be effective until each holder of the Trust Securities shall
have consented to such waiver. Upon any such waiver, the Default covered thereby
shall be deemed to be cured for all purposes of this Indenture and the
Corporation, the Debenture Trustee and the holders of the Securities shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon. Whenever any Default or Event of Default hereunder shall
have been waived as permitted by this Section 5.07, said Default or Event of
Default shall for all purposes of the Securities and this Indenture be deemed to
have been cured and to be not continuing.
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SECTION 5.08 Notice of Defaults
(a) The Debenture Trustee shall, within 90 days after the occurrence of
a Default with respect to the Securities actually known to a Responsible Officer
of the Debenture Trustee, mail to all Securityholders, as the names and
addresses of such holders appear upon the Security Register, notice of all such
Defaults, unless such Default shall have been cured before the giving of such
notice (the term "Default" for the purpose of this Section 5.08 being hereby
defined to be any of the events specified in clauses (a), (b), (c), (d) and (e)
of Section 5.01, not including periods of grace, if any, provided for therein,
and irrespective of the giving of written notice specified in clause (c) of
Section 5.01); provided, however, that, except in the case of Default in the
payment of the principal of or interest (including Compounded Interest or
Additional Sums, if any) on any of the Securities, the Debenture 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 Debenture Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders; provided,
further, that in the case of any Default of the character specified in Section
5.01(c), no such notice to Securityholders shall be given until at least 60 days
after the occurrence thereof, but shall be given within 90 days after such
occurrence.
(b) Within ten Business Days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Debenture Trustee, the
Debenture Trustee shall transmit notice of such Event of Default to all
Securityholders as their names and addresses appear on the Security Register,
unless such Event of Default shall have been cured or waived.
SECTION 5.09 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Security by
its 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 Debenture Trustee for any action
taken or omitted by it as Debenture 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 and expenses, 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 5.09 shall not apply to any suit instituted
by the Debenture Trustee, to any suit instituted by any Securityholder, or group
of Securityholders, holding in the aggregate more than 10% in aggregate
principal amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of or
interest (including Compounded Interest and Additional Sums, if any) on any
Security against the Corporation on or after the same shall have become due and
payable.
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ARTICLE VI
CONCERNING THE DEBENTURE TRUSTEE
SECTION 6.01 Duties and Responsibilities of Debenture Trustee.
With respect to the holders of the Securities issued hereunder, the
Debenture Trustee, prior to the occurrence of an Event of Default (which, other
than in the case of Sections 5.01(a) and 5.01(b) hereof, is actually known to a
Responsible Officer of the Debenture Trustee) and after the curing or waiving of
all such Events of Default which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture. In
case an Event of Default (which, other than in the case of Sections 5.01(a) and
5.01(b) hereof, is actually known to a Responsible Officer of the Debenture
Trustee) has occurred (which has not been cured or waived), the Debenture
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.
No provision of this Indenture shall be construed to relieve the
Debenture Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default (which, other
than in the case of Sections 5.01(a) and 5.01(b) hereof, is
actually known to a Responsible Officer of the Debenture
Trustee) and after the curing or waiving of all such Events of
Default which may have occurred,
(1) the duties and obligations of the Debenture Trustee
shall be determined solely by the express provisions
of this Indenture, and the Debenture Trustee shall
not be liable except for the performance of such
duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against
the Debenture Trustee; and
(2) in the absence of bad faith on the part of the
Debenture Trustee, the Debenture 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 Debenture Trustee and conforming to the
requirements of this Indenture; but, in the case of
any such certificates or opinions which by any
provision hereof are specifically required to be
furnished to the Debenture Trustee, the Debenture
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Indenture;
(b) the Debenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer or Responsible Officers, unless it shall be
proved that the Debenture Trustee was negligent in
ascertaining the pertinent facts; and
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(c) the Debenture 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 Securityholders pursuant to Section 5.07,
relating to the time, method and place of conducting
any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power
conferred upon the Debenture Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Debenture 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 it reasonably believes that the repayment of
such funds or liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably assured to
it.
SECTION 6.02 Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Debenture Trustee may conclusively rely and shall be
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, note, debenture
or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Corporation
mentioned herein may be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be
herein specifically prescribed); and any Board Resolution may
be evidenced to the Debenture Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the
Corporation;
(c) the Debenture Trustee may consult with counsel of its
selection and any advice or Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of
Counsel;
(d) the Debenture Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at
the request, order or direction of any of the Securityholders,
pursuant to the provisions of this Indenture, unless such
Securityholders shall have offered to the Debenture Trustee
reasonable and sufficient security or indemnity against the
costs, expenses and liabilities which may be incurred therein
or thereby;
(e) the Debenture Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Indenture; nothing contained herein
shall, however, relieve the Debenture Trustee of the
obligation, upon the occurrence of an Event of Default
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(which, other than in the case of Sections 5.01(a) and 5.01(b)
hereof, is known to the Debenture Trustee) (that has not been
cured or waived), to exercise such of the rights and powers
vested in it by this Indenture, and to use the same degree of
care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of his
or her own affairs;
(f) the Debenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond,
debenture, coupon or other paper or document, unless requested
in writing to do so by the holders of a majority in aggregate
principal amount of the outstanding Securities; provided,
however, that if the payment within a reasonable time to the
Debenture Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is,
in the opinion of the Debenture Trustee, not reasonably
assured to the Debenture Trustee by the security afforded to
it by the terms of this Indenture, the Debenture Trustee may
require reasonable indemnity against such expense or liability
as a condition to so proceeding;
(g) the Debenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents (including any Authenticating Agent) or
attorneys, and the Debenture Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent
or attorney appointed by it with due care;
(h) the Debenture Trustee shall not be charged with knowledge of
any Default or Event of Default unless (1) such Default or
Event of Default falls within Section 5.01(a) (other than a
default with respect to the payment of Compounded Interest or
Additional Sums) or Section 5.01(b) of the Indenture, (2) a
Responsible Officer shall have actual knowledge of such
Default or Event of Default or (3) written notice of such
Default or Event of Default shall have been given to the
Debenture Trustee by the Corporation or any other obligor on
the Securities or by any holder of the Securities; and
(i) the Debenture Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith, without
negligence or willful misconduct and believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
SECTION 6.03 No Responsibility for Recitals, etc.
The recitals contained herein and in the Securities (except in the
certificate of authentication of the Debenture Trustee or the Authenticating
Agent) shall be taken as the statements of the Corporation, and the Debenture
Trustee and the Authenticating Agent assume no responsibility for the
correctness of the same. The Debenture Trustee and the Authenticating Agent make
no representations as to the validity or sufficiency of this Indenture or of the
Securities. The Debenture
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Trustee and the Authenticating Agent shall not be accountable for the use or
application by the Corporation of any Securities or the proceeds of any
Securities authenticated and delivered by the Debenture Trustee or the
Authenticating Agent in conformity with the provisions of this Indenture.
SECTION 6.04 Debenture Trustee, Authenticating Agent, Paying Agents,
Transfer Agents and Registrar May Own Securities.
The Debenture Trustee or any Authenticating Agent or any paying agent
or any transfer agent or any security registrar for the Securities, in its
individual or any other capacity, may become the owner or pledgee of Securities
with the same rights it would have if it were not Debenture Trustee,
Authenticating Agent, paying agent, transfer agent or security registrar for the
Securities.
SECTION 6.05 Moneys to be Held in Trust.
Subject to the provisions of Section 11.04, all moneys received by the
Debenture Trustee or any paying agent shall, until used or applied as herein
provided, be held in trust for the purpose for which they were received, but
need not be segregated from other funds except to the extent required by law.
The Debenture Trustee and any paying agent shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed in
writing with the Corporation. So long as no Event of Default shall have occurred
and be continuing, all interest allowed on any such moneys shall be paid from
time to time upon the written order of the Corporation, signed by an Officer
thereof.
SECTION 6.06 Compensation and Expenses of Debenture Trustee.
The Corporation, as issuer of Securities under this Indenture,
covenants and agrees to pay to the Debenture Trustee from time to time, and the
Debenture Trustee shall be entitled to, such compensation as shall be agreed to
in writing between the Corporation and the Debenture Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), and the Corporation will pay or reimburse the Debenture Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Debenture Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Corporation also covenants to indemnify each of
the Debenture Trustee (including in its individual capacity) and any predecessor
Debenture Trustee (and its officers, agents, directors and employees) for, and
to hold it harmless against, any and all loss, damage, claim, liability or
expense including taxes (other than taxes based on the income of the Debenture
Trustee) incurred without negligence or bad faith on the part of the Debenture
Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability. The obligations of the Corporation under
this Section 6.06 to compensate and indemnify the Debenture Trustee and to pay
or reimburse the Debenture Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon all property and
funds held
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or collected by the Debenture Trustee as such, except funds held in trust for
the benefit of the holders of particular Securities.
When the Debenture Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(d) or Section
5.01(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for its services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the resignation or removal
of the Debenture Trustee and the defeasance or other termination of this
Indenture.
SECTION 6.07 Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02, whenever in the
administration of the provisions of this Indenture the Debenture Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or omitting any action hereunder, such matter (unless other evidence in
respect thereof is herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Debenture Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Debenture Trustee, and such Officers' Certificate, in the absence of negligence
or bad faith on the part of the Debenture Trustee, shall be full warrant to the
Debenture Trustee for any action taken or omitted by it under the provisions of
this Indenture upon the faith thereof.
SECTION 6.08 Conflicting Interest of Debenture Trustee.
If the Debenture Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Debenture Trustee and the Corporation shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 6.09 Eligibility of Debenture Trustee.
The Debenture Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any state or territory thereof or of the District of Columbia, or a corporation
or other Person permitted to act as trustee by the Commission authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least fifty million U.S. dollars ($50,000,000) and subject to
supervision or examination by federal, state, territorial, or District of
Columbia authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 6.09 the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
The Corporation may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Corporation, serve
as Debenture Trustee.
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In case at any time the Debenture Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.09, the Debenture Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10 Resignation or Removal of Debenture Trustee.
(a) The Debenture Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice of such resignation
to the Corporation and by mailing notice thereof to the holders of the
Securities at their addresses as they shall appear on the Security Register.
Upon receiving such notice of resignation, the Corporation shall promptly
appoint a successor trustee or trustees by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Debenture Trustee
and one copy to the successor trustee. If no successor trustee shall have been
so appointed and have accepted appointment within 60 days after the mailing of
such notice of resignation to the affected Securityholders, the resigning
Debenture Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Securityholder who has been a bona
fide holder of a Security for at least six months may, subject to the provisions
of Section 5.09, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Debenture Trustee shall fail to comply with the
provisions of Section 6.08 after written request
therefor by the Corporation or by any Securityholder
who has been a bona fide holder of a Security or
Securities for at least six months, or
(2) the Debenture Trustee shall cease to be eligible in
accordance with the provisions of Section 6.09 and
shall fail to resign after written request therefor
by the Corporation or by any such Securityholder, or
(3) the Debenture Trustee shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent,
or a receiver of the Debenture Trustee or of its
property shall be appointed, or any public officer
shall take charge or control of the Debenture Trustee
or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Corporation may remove the Debenture Trustee and
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Debenture Trustee so removed and one
copy to the successor trustee, or, subject to the provisions of Section 5.09,
any Securityholder who has been a bona fide holder of a Security for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Debenture Trustee and
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Debenture
Trustee and appoint a successor trustee.
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(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Debenture Trustee
and nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after written notification of such nomination the
Corporation objects thereto, or if no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after such removal,
in which case the Debenture Trustee so removed or any Securityholder, upon the
terms and conditions and otherwise as in subsection (a) of this Section 6.10
provided, may petition any court of competent jurisdiction for an appointment of
a successor trustee.
(d) Any resignation or removal of the Debenture Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 6.10
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 6.11.
SECTION 6.11 Acceptance by Successor Debenture Trustee.
Any successor trustee appointed as provided in Section 6.10 shall
execute, acknowledge and deliver to the Corporation and to its predecessor
trustee an instrument accepting such appointment hereunder, 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, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, on the written request of the Corporation or of the successor
trustee, the trustee ceasing to act shall, upon payment of all amounts then due
it pursuant to the provisions of Section 6.06, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act and shall duly assign, transfer and deliver to such successor
trustee all property and money held by such retiring trustee thereunder. Upon
request of any such successor trustee, the Corporation shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming to
such successor trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a lien upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.06.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 6.08 and eligible under the
provisions of Section 6.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 6.11, the Corporation shall mail notice of the succession of such
trustee hereunder to the holders of Securities at their addresses as they shall
appear on the Security Register. If the Corporation fails to mail such notice
within 10 days after the acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Corporation.
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SECTION 6.12 Succession by Merger, etc.
Any corporation into which the Debenture Trustee may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Debenture Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Debenture Trustee, shall be the successor of the Debenture
Trustee hereunder 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
at the time such successor to the Debenture Trustee shall succeed to the trusts
created by this Indenture, any such successor to the Debenture Trustee may adopt
the certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Debenture Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor trustee; and in all such cases such certificates
shall have the full force which the Securities or this Indenture elsewhere
provides that the certificate of the Debenture Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Debenture Trustee or authenticate Securities in the name of any
predecessor Debenture Trustee shall apply only to its successor or successors by
merger or consolidation.
SECTION 6.13 Limitation on Rights of Debenture Trustee as a Creditor.
The Debenture Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in Section 311(b)
of the Trust Indenture Act. A Debenture Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act to the extent
included therein.
SECTION 6.14 Authenticating Agents.
There may be one or more Authenticating Agents appointed by the
Debenture Trustee upon the request of the Corporation with power to act on its
behalf and subject to its direction in the authentication and delivery of
Securities issued upon exchange or transfer thereof as fully to all intents and
purposes as though any such Authenticating Agent had been expressly authorized
to authenticate and deliver Securities; provided, however, that the Debenture
Trustee shall have no liability to the Corporation for any acts or omissions of
the Authenticating Agent with respect to the authentication and delivery of
Securities. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States 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 at
least $5,000,000 and being subject to supervision or examination by federal,
state, territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually pursuant to law or the
requirements of such authority, then for the purposes of this Section 6.14 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. If at any time an Authenticating Agent shall cease to be eligible
in accordance with
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the provisions of this Section, it shall resign immediately in the manner and
with the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which any Authenticating Agent shall be a party, or any
corporation succeeding to the corporate trust business of any Authenticating
Agent, shall be the successor of such Authenticating Agent hereunder, if such
successor corporation is otherwise eligible under this Section 6.14 without the
execution or filing of any paper or any further act on the part of the parties
hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Debenture Trustee and to the Corporation. The
Debenture Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
to the Corporation. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section 6.14, the Debenture Trustee may, and upon the
request of the Corporation shall, promptly appoint a successor Authenticating
Agent eligible under this Section 6.14, shall give written notice of such
appointment to the Corporation and shall mail notice of such appointment to all
Securityholders as the names and addresses of such holders appear on the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if originally
named as Authenticating Agent herein.
The Corporation, as issuer of the Securities, agrees to pay to any
Authenticating Agent from time to time reasonable compensation for its services.
Any Authenticating Agent shall have no responsibility or liability for any
action taken by it as such in accordance with the directions of the Debenture
Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01 Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the fact that at
the time of taking any such action the holders of such specified percentage have
joined therein may be evidenced (a) by any instrument (including by way of
electronic transmission) or any number of instruments of similar tenor executed
by such Securityholders in person or by agent or proxy appointed in writing, or
(b) by the record of such holders of Securities voting in favor thereof at any
meeting of such Securityholders duly called and held in accordance with the
provisions of Article VIII, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of such Securityholders.
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If the Corporation shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Corporation may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
action, but the Corporation shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only
the Securityholders of record at the close of business on the record date shall
be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of outstanding Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
outstanding Securities shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
SECTION 7.02 Proof of Execution by Securityholders.
Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of the
execution of any instrument by a Securityholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Debenture Trustee or in such manner as shall be
satisfactory to the Debenture Trustee. The ownership of Securities shall be
proved by the Security Register or by a certificate of the security registrar
for the Securities. The Debenture Trustee may require such additional proof of
any matter referred to in this Section as it shall deem necessary.
The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.06.
SECTION 7.03 Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any Security,
the Corporation, the Debenture Trustee, any Authenticating Agent, any paying
agent, any transfer agent and any security registrar for the Securities may deem
the person in whose name such Security shall be registered upon the Security
Register to be, and may treat him as, the absolute owner of such Security
(whether or not such Security shall be overdue) for the purpose of receiving
payment of or on account of the principal of and (subject to Section 2.06)
interest on such Security and for all other purposes; and neither the
Corporation nor the Debenture Trustee nor any Authenticating Agent nor any
paying agent nor any transfer agent nor any security registrar for the
Securities shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being or upon his order shall be valid and, to
the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Security.
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SECTION 7.04 Securities Owned by Corporation Deemed Not Outstanding.
In determining whether the holders of the requisite aggregate principal
amount of Securities have concurred in any direction, consent or waiver under
this Indenture, Securities that are owned by the Corporation or any other
obligor on the Securities or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Corporation or
any other obligor on the Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided, however, that
for the purposes of determining whether the Debenture Trustee shall be protected
in relying on any such direction, consent or waiver, only Securities which a
Responsible Officer of the Debenture Trustee actually knows are so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as outstanding for the purposes of this Section 7.04 if the pledgee
shall establish to the satisfaction of the Debenture Trustee the pledgee's right
to vote such Securities and that the pledgee is not the Corporation or any such
other obligor or Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Corporation or any such other
obligor. In the case of a dispute as to such right, any decision by the
Debenture Trustee taken upon the advice of counsel shall be full protection to
the Debenture Trustee.
SECTION 7.05 Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Debenture
Trustee, as provided in Section 7.01, of the taking of any action by the holders
of the percentage in aggregate principal amount of the Securities specified in
this Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.01, the serial number of which is shown by the evidence to
be included in the group of Securities the holders of which have consented to
such action, may, by filing written notice with the Debenture Trustee at its
principal office and upon proof of holding as provided in Section 7.02, revoke
such action so far as concerns such Security (or so far as concerns the
principal amount represented by any exchanged or substituted Security). Except
as aforesaid, any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Security or any Security issued in exchange or substitution therefor.
ARTICLE VIII
MEETINGS OF SECURITYHOLDERS
SECTION 8.01 Purposes of Meetings.
A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) to give any notice to the Corporation or to the Debenture
Trustee, or to give any directions to the Debenture Trustee,
or to consent to the waiving of any Default
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hereunder and its consequences, or to take any other action
authorized to be taken by Securityholders pursuant to any of
the provisions of Article V;
(b) to remove the Debenture Trustee and nominate a successor
trustee pursuant to the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section
9.02; or
(d) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal
amount of such Securities under any other provision of this
Indenture or under applicable law.
SECTION 8.02 Call of Meetings by Debenture Trustee.
The Debenture Trustee may at any time call a meeting of Securityholders
to take any action specified in Section 8.01, to be held at such time and at
such place in Miami, Florida or Wilmington, Delaware as the Debenture Trustee
shall determine. Notice of every meeting of the Securityholders, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be mailed to holders of Securities at their
addresses as they shall appear on the Security Register. Such notice shall be
mailed not less than 20 nor more than 180 days prior to the date fixed for the
meeting.
SECTION 8.03 Call of Meetings by Corporation or Securityholders.
In case at any time the Corporation, pursuant to a resolution of the
Board of Directors, or the holders of at least 10% in aggregate principal amount
of the Securities then outstanding, shall have requested the Debenture Trustee
to call a meeting of Securityholders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Debenture Trustee shall not have mailed the notice of such meeting within 20
days after receipt of such request, then the Corporation or such Securityholders
may determine the time and the place in Miami, Florida or Wilmington, Delaware
for such meeting and may call such meeting to take any action authorized in
Section 8.01, by mailing notice thereof as provided in Section 8.02.
SECTION 8.04 Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders, a Person
shall be (a) a holder of one or more Securities or (b) a Person appointed by an
instrument in writing as proxy by a holder of one or more Securities. The only
Persons who shall be entitled to be present or to speak at any meeting of
Securityholders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Debenture Trustee and its counsel and any
representatives of the Corporation and its counsel.
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SECTION 8.05 Regulations.
Notwithstanding any other provisions of this Indenture, the Debenture
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Securityholders, in regard to proof of the holding of Securities and
of the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Debenture Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Corporation or by Securityholders as provided in Section 8.03, in which case
the Corporation or the Securityholders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by majority vote of the
meeting.
Subject to the provisions of Section 8.04, at any meeting each holder
of Securities or proxy therefor shall be entitled to one vote for each $25
principal amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Securities held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Securityholders. Any
meeting of Securityholders duly called pursuant to the provisions of Section
8.02 or 8.03 may be adjourned from time to time by a majority of those present,
and the meeting may be held as so adjourned without further notice.
SECTION 8.06 Voting.
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 8.02. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Corporation and
the other to the Debenture Trustee to be preserved by the Debenture Trustee, the
latter to have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein stated.
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ARTICLE IX
AMENDMENTS
SECTION 9.01 Without Consent of Securityholders.
The Corporation and the Debenture Trustee may from time to time and at
any time amend this Indenture, without the consent of the Securityholders, for
one or more of the following purposes:
(a) to evidence the succession of another Person to the
Corporation, or successive successions, and the assumption by
the successor Person of the covenants, agreements and
obligations of the Corporation pursuant to Article X hereof;
(b) to add to the covenants of the Corporation such further
covenants, restrictions or conditions for the protection of
the Securityholders as the Board of Directors and the
Debenture Trustee shall consider to be for the protection of
the Securityholders, and to make the occurrence, or the
occurrence and continuance, of a default in any of such
additional covenants, restrictions or conditions a Default or
an Event of Default permitting the enforcement of all or any
of the remedies provided in this Indenture as herein set
forth; provided, however, that in respect of any such
additional covenant, restriction or condition such amendment
may provide for a particular period of grace after default
(which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies
available to the Debenture Trustee upon such default;
(c) to provide for the issuance under this Indenture of Securities
in coupon form (including Securities registrable as to
principal only) and to provide for exchangeability of such
Securities with the Securities issued hereunder in fully
registered form and to make all appropriate changes for such
purpose;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture
which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture;
or to make such other provisions in regard to matters or
questions arising under this Indenture, provided that any such
action shall not materially adversely affect the interests of
the holders of the Securities;
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the
Securities;
(f) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities
legends, if any, to be placed on Securities, and all other
matters required pursuant to Section 2.07 or otherwise
necessary, desirable or appropriate in connection with the
issuance of Securities to holders of Capital Securities in the
event of a distribution of Securities by the Trust following a
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Dissolution Event, provided that any such action shall not
materially adversely affect the interests of the holders of
the Securities;
(g) to qualify or maintain qualification of this Indenture under
the Trust Indenture Act; or
(h) to make any change that does not adversely affect the rights
of any Securityholder in any material respect.
The Debenture Trustee is hereby authorized to join with the Corporation
in the execution of any supplemental indenture to effect such amendment, to make
any further appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer and assignment of any property
thereunder, but the Debenture Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects the
Debenture Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any amendment to this Indenture authorized by the provisions of this
Section 9.01 may be executed by the Corporation and the Debenture Trustee
without the consent of the holders of any of the Securities at the time
outstanding, notwithstanding any of the provisions of Section 9.02.
SECTION 9.02 With Consent of Securityholders.
With the consent (evidenced as provided in Section 7.01) of the holders
of a majority in aggregate principal amount of the Securities at the time
outstanding, the Corporation, when authorized by a Board Resolution, and the
Debenture Trustee may from time to time and at any time amend this Indenture 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 the Securities; provided, however, that no such amendment
shall, without the consent of the holders of each Security then outstanding and
affected thereby (i) change the Maturity Date of any Security, or reduce the
rate or extend the time of payment of interest thereon (except as contemplated
by Article XVI), or reduce the principal amount thereof, or change any
prepayment provisions, or make the principal thereof or any interest thereon
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any Securityholder to institute suit for payment thereof, or (ii)
reduce the aforesaid percentage of Securities, the holders of which are required
to consent to any such amendment to the Indenture; provided, however, that if
the Securities are held by the Trust, such amendment shall not be effective
until the holders of a majority in liquidation amount of Trust Securities shall
have consented to such amendment; provided, further, that if the consent of the
holder of each outstanding Security is required, such amendment shall not be
effective until each holder of the Trust Securities shall have consented to such
amendment.
Upon the request of the Corporation accompanied by a copy of a
resolution of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture effecting such
amendment, and upon the filing with the Debenture Trustee of evidence of the
consent of Securityholders as aforesaid, the Debenture Trustee shall join with
the Corporation in the execution of such supplemental indenture unless such
supplemental indenture
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affects the Debenture Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Debenture Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
Promptly after the execution by the Corporation and the Debenture
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Debenture Trustee shall transmit by mail, first class postage
prepaid, a notice, prepared by the Corporation, setting forth in general terms
the substance of such supplemental indenture, to the Securityholders as their
names and addresses appear upon the Security Register. Any failure of the
Debenture Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 9.03 Compliance with Trust Indenture Act; Effect of
Supplemental Indentures.
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Debenture Trustee, the Corporation
and the holders of Securities shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 9.04 Notation on Securities.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article IX may bear a
notation in form approved by the Debenture Trustee as to any matter provided for
in such supplemental indenture. If the Corporation or the Debenture Trustee
shall so determine, new Securities so modified as to conform, in the opinion of
the Debenture Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared and
executed by the Corporation, authenticated by the Debenture Trustee or the
Authenticating Agent and delivered in exchange for the Securities then
outstanding.
SECTION 9.05 Evidence of Compliance of Supplemental Indenture to be
Furnished to Debenture Trustee.
The Debenture Trustee, subject to the provisions of Sections 6.01 and
6.02, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article IX.
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ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE, TRANSFER AND LEASE
SECTION 10.01 Corporation May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Corporation with or into any other
Person (whether or not affiliated with the Corporation, as the case may be), or
successive consolidations or mergers in which the Corporation or its successor
or successors, as the case may be, shall be a party or parties, or shall prevent
any sale, conveyance, transfer or lease of the property of the Corporation, or
its successor or successors as the case may be, as an entirety, or substantially
as an entirety, to any other Person (whether or not affiliated with the
Corporation, or its successor or successors, as the case may be) authorized to
acquire and operate the same, provided that (a) the Corporation is the surviving
Person, or the Person formed by or surviving any such consolidation or merger
(if other than the Corporation) or to which such sale, conveyance, transfer or
lease of property is made is a Person organized and existing under the laws of
the United States or any State thereof or the District of Columbia, and (b) if
the Corporation is not the surviving Person, upon any such consolidation,
merger, sale, conveyance, transfer or lease, the due and punctual payment of the
principal of and interest on the Securities according to their tenor and the due
and punctual performance and observance of all the covenants and conditions of
this Indenture to be kept or performed by the Corporation shall be expressly
assumed by the surviving Person, by supplemental indenture (which shall conform
to the provisions of the Trust Indenture Act as then in effect) satisfactory in
form to the Debenture Trustee executed and delivered to the Debenture Trustee by
the Person formed by such consolidation, or into which the Corporation shall
have been merged, or by the Person which shall have acquired such property, as
the case may be, and (c) after giving effect to such consolidation, merger,
sale, conveyance, transfer or lease, no Default or Event of Default shall have
occurred and be continuing.
SECTION 10.02 Successor Person to be Substituted for Corporation.
In case of any such consolidation, merger, sale, conveyance, transfer
or lease, and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Debenture Trustee and satisfactory in
form to the Debenture Trustee, of the obligation of due and punctual payment of
the principal of and interest on all of the Securities and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed or observed by the Corporation, such successor Person
shall succeed to and be substituted for the Corporation, with the same effect as
if it had been named herein as a party hereto, and the Corporation thereupon
shall be relieved of any further liability or obligation hereunder or upon the
Securities. Such successor Person thereupon may cause to be signed, and may
issue either in its own name or in the name of the Corporation, any or all of
the Securities issuable hereunder which theretofore shall not have been signed
by the Corporation and delivered to the Debenture Trustee or the Authenticating
Agent; and, upon the order of such successor Person instead of the Corporation
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Debenture Trustee or the Authenticating Agent shall authenticate
and deliver any Securities which previously shall have been signed and delivered
by any Officer of the Corporation to the Debenture Trustee or
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the Authenticating Agent for authentication, and any Securities which such
successor Person thereafter shall cause to be signed and delivered to the
Debenture Trustee or the Authenticating Agent for that purpose. 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 as though all of such Securities had
been issued at the date of the execution hereof.
SECTION 10.03 Opinion of Counsel to be Given Debenture Trustee.
The Debenture Trustee, subject to the provisions of Sections 6.01 and
6.02, may receive an Opinion of Counsel as conclusive evidence that any
consolidation, merger, sale, conveyance, transfer or lease, and any assumption,
permitted or required by the terms of this Article X complies with the
provisions of this Article X.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01 Discharge of Indenture.
When (a) the Corporation shall deliver to the Debenture Trustee for
cancellation all Securities theretofore authenticated (other than any Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced as provided in Section 2.08) and not theretofore canceled, or (b) all
the Securities not theretofore canceled or delivered to the Debenture Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for prepayment within
one year under arrangements satisfactory to the Debenture Trustee for the giving
of notice of prepayment, and the Corporation shall deposit with the Debenture
Trustee, in trust, funds sufficient to pay on the Maturity Date or upon
prepayment all of the Securities (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced as provided in
Section 2.08) not theretofore canceled or delivered to the Debenture Trustee for
cancellation, including principal and interest (including Compounded Interest
and Additional Sums, if any) due or to become due to the Maturity Date or
prepayment date, as the case may be, but excluding, however, the amount of any
moneys for the payment of principal of or interest (including Compounded
Interest and Additional Sums, if any) on the Securities (1) theretofore repaid
to the Corporation in accordance with the provisions of Section 11.04, or (2)
paid to any State or to the District of Columbia pursuant to its unclaimed
property or similar laws, and if, in either case the Corporation shall also pay
or cause to be paid all other sums payable hereunder by the Corporation, then
this Indenture shall cease to be of further effect except for the provisions of
Sections 2.02, 2.07, 2.08, 3.01, 3.02, 3.04, 6.06, 6.10 and 11.04 hereof, which
shall survive until such Securities shall mature and be paid. Thereafter,
Sections 6.06, 6.10 and 11.04 shall survive, and the Debenture Trustee, on
demand of the Corporation accompanied by any Officers' Certificate and an
Opinion of Counsel and at the cost and expense of the Corporation, shall execute
proper instruments acknowledging satisfaction of and discharging this Indenture;
the Corporation, however, hereby agrees to reimburse the Debenture Trustee for
any costs or expenses thereafter reasonably and properly incurred by the
Debenture Trustee in connection with this Indenture or the Securities.
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SECTION 11.02 Deposited Moneys and U.S. Government Obligations to be
Held in Trust by Debenture Trustee.
Subject to the provisions of Section 11.04, all moneys and U.S.
Government Obligations deposited with the Debenture Trustee pursuant to Sections
11.01 or 11.05 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Corporation if acting as its
own paying agent), to the holders of the particular Securities for the payment
of which such moneys or U.S. Government Obligations have been deposited with the
Debenture Trustee, of all sums due and to become due thereon for principal and
interest.
The Corporation shall pay and indemnify the Debenture Trustee against
any tax, fee or other charge imposed on or assessed against the U.S.
Governmental Obligations deposited pursuant to Section 11.05 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the holders of outstanding Securities.
SECTION 11.03 Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all moneys then
held by any paying agent of the Securities (other than the Debenture Trustee)
shall, upon written demand of the Corporation, be repaid to it or paid to the
Debenture Trustee, and thereupon such paying agent shall be released from all
further liability with respect to such moneys.
SECTION 11.04 Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Debenture Trustee or any
paying agent for payment of the principal of or interest (including Compounded
Interest and Additional Sums, if any) on Securities and not applied but
remaining unclaimed by the holders of Securities for two years after the date
upon which the principal of or interest (including Compounded Interest and
Additional Sums, if any) on such Securities, as the case may be, shall have
become due and payable, shall be repaid to the Corporation by the Debenture
Trustee or such paying agent; and the holder of any of the Securities shall
thereafter look only to the Corporation for any payment which such holder may be
entitled to collect and all liability of the Debenture Trustee or such paying
agent with respect to such moneys shall thereupon cease.
SECTION 11.05 Defeasance Upon Deposit of Moneys or U.S. Government
Obligations.
The Corporation shall be deemed to have been Discharged (as defined
below) from its obligations with respect to the Securities on the 91st day after
the applicable conditions set forth below have been satisfied:
(a) the Corporation shall have deposited or caused to be deposited
irrevocably with the Debenture Trustee or the Defeasance Agent
(as defined below) as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit
of the holders of the Securities (i) money in an amount, or
(ii) U.S. Government Obligations which
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through the payment of interest and principal in respect
thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, money in an
amount, or (iii) a combination of (i) and (ii), sufficient, in
the opinion (with respect to (ii) and (iii)) of a nationally
recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Debenture
Trustee and the Defeasance Agent, if any, to pay and discharge
each installment of principal of and interest on the
outstanding Securities on the dates such installments of
principal and interest are due;
(b) if the Securities are then listed on any national securities
exchange, the Corporation shall have delivered to the
Debenture Trustee and the Defeasance Agent, if any, an Opinion
of Counsel to the effect that the exercise of the option under
this Section 11.05 would not cause such Securities to be
delisted from such exchange;
(c) no Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such
deposit; and
(d) the Corporation shall have delivered to the Debenture Trustee
and the Defeasance Agent, if any, an Opinion of Counsel to the
effect that holders of the Securities will not recognize
income, gain or loss for United States federal income tax
purposes as a result of the exercise of the option under this
Section 11.05 and will be subject to United States federal
income tax on the same amount and in the same manner and at
the same times as would have been the case if such option had
not been exercised.
"Discharged" means that the Corporation shall be deemed to have paid
and discharged the entire indebtedness represented by, and obligations under,
the Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Debenture Trustee, at the expense of the
Corporation, shall execute proper instruments acknowledging the same), except
(1) the rights of holders of Securities to receive, from the trust fund
described in clause (a) above, payment of the principal of and the interest on
the Securities when such payments are due; (2) the Corporation's obligations
with respect to the Securities under Sections 2.07, 2.08, 5.02 and 11.04; and
(3) the rights, powers, trusts, duties and immunities of the Debenture Trustee
hereunder.
"Defeasance Agent" means another financial institution which is
eligible to act as Debenture Trustee hereunder and which assumes all of the
obligations of the Debenture Trustee necessary to enable the Debenture Trustee
to act hereunder. In the event such a Defeasance Agent is appointed pursuant to
this Section, the following conditions shall apply:
(1) the Debenture Trustee shall have approval rights over the
document appointing such Defeasance Agent and the document
setting forth such Defeasance Agent's rights and
responsibilities; and
(2) the Defeasance Agent shall provide verification to the
Debenture Trustee acknowledging receipt of sufficient money
and/or U.S. Government Obligations to meet the applicable
conditions set forth in this Section 11.05.
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ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01 Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or interest (including
Compounded Interest and Additional Sums, if any) on any Security, or for any
claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Corporation in this Indenture,
or in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, officer
or director, as such, past, present or future, of the Corporation or of any
successor Person to the Corporation, either directly or through the Corporation
or any successor Person to the Corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issuance of the Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Successors.
All of the covenants, stipulations, promises and agreements of the
Corporation contained in this Indenture shall also bind the Corporation's
successors and assigns whether so expressed or not.
SECTION 13.02 Official Acts by Successor Corporation.
Any act or proceeding that, by any provision of this Indenture, is
authorized or required to be done or performed by any board, committee or
officer of the Corporation shall and may be done and performed with like force
and effect by the like board, committee or officer of any corporation that shall
at the time be the lawful sole successor of the Corporation.
SECTION 13.03 Surrender of Corporation Powers.
The Corporation by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Debenture Trustee
may surrender any of the powers reserved to the Corporation hereunder, and
thereupon such power so surrendered shall terminate both as to the Corporation,
as the case may be, and as to any successor Person.
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SECTION 13.04 Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Debenture Trustee or by the
holders of Securities on the Corporation may be given or served by being
deposited postage prepaid by first class mail, registered or certified mail,
overnight courier service or conformed telecopy addressed (until another address
is filed by the Corporation with the Debenture Trustee for the purpose) to
Hamilton Bancorp Inc. at 3750 N.W. 87th Avenue, Miami, Florida 33178, Attention:
John M.R. Jacobs. Any notice, direction, request or demand by any Securityholder
to or upon the Debenture Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or made in writing at the office of
Wilmington Trust Company at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890- 0001, Attention: Corporate Trust Administration
(unless another address is provided by the Debenture Trustee to the Corporation
for such purpose). Any notice or communication to a Securityholder shall be
mailed by first class mail to his or her address shown on the Security Register
kept by the security registrar for the Securities.
SECTION 13.05 Governing Law.
This Indenture and each Security shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be governed
by and construed in accordance with the laws of said State without regard to
conflict of law principles thereof.
SECTION 13.06 Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Corporation to the Debenture
Trustee to take any action under any of the provisions of this Indenture, the
Corporation shall furnish to the Debenture Trustee an Officers' Certificate
stating that in the opinion of the signers all conditions 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 have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Debenture Trustee with respect to compliance with a condition
or covenant provided for in this Indenture (except certificates delivered
pursuant to Section 3.05) shall include (1) a statement that the Person making
such certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
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SECTION 13.07 Business Days.
In any case where the date of payment of principal of or interest on
the Securities is not a Business Day, the payment of such principal of or
interest on the Securities will not be made on such date but will be made on the
next succeeding Business Day, except if such Business Day is in the next
succeeding calendar year, such payment will be made on the immediately preceding
Business Day, with the same force and effect as if made on the original date of
payment, and no interest shall accrue for the period from and after such date.
SECTION 13.08 Trust Indenture Act to Control.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 318,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09 Table of Contents, Headings, etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
SECTION 13.10 Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
SECTION 13.11 Separability.
In case any one or more of the provisions contained in this Indenture
or in the Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
SECTION 13.12 Assignment.
The Corporation will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Corporation, provided that, in the event of any
such assignment, the Corporation will remain liable for all such obligations.
Subject to the foregoing, this Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties thereto.
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SECTION 13.13 Acknowledgment of Rights.
The Corporation acknowledges that, with respect to any Securities held
by the Trust or a trustee of such Trust, if the Property Trustee of such Trust
fails to enforce its rights under this Indenture as the holder of the Securities
held as the assets of the Trust, any holder of Capital Securities may institute
legal proceedings directly against the Corporation to enforce such Property
Trustee's rights under this Indenture without first instituting any legal
proceedings against such Property Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Corporation to
pay principal of or interest on the Securities when due, the Corporation
acknowledges that a holder of Capital Securities may directly institute a
proceeding for enforcement of payment to such holder of the principal of or
interest on the Securities having an aggregate principal amount equal to the
aggregate liquidation amount of the Capital Securities of such holder on or
after the respective due date specified in the Securities.
ARTICLE XIV
PREPAYMENT OF SECURITIES
SECTION 14.01 Special Event Prepayment.
If, prior to the Initial Optional Redemption Date, a Special Event has
occurred and is continuing, then notwithstanding Section 14.02(a) but subject to
Section 14.02(c), the Corporation shall have the right, at any time within 90
days following the occurrence of such Special Event, upon (i) not less than 45
days written notice to the Debenture Trustee and (ii) not less than 30 days nor
more than 60 days' written notice to the Securityholders, to prepay the
Securities, in whole (but not in part), at the Prepayment Price. The Prepayment
Price shall be paid prior to 12:00 noon, New York City time, on the date of such
prepayment or such earlier time as the Corporation determines, provided that the
Corporation shall deposit with the Debenture Trustee an amount sufficient to pay
the Prepayment Price by 10:00 a.m., New York City time, on the date such
Prepayment Price is to be paid.
SECTION 14.02 Optional Prepayment by Corporation.
(a) Subject to Sections 14.02(b) and (c), the Corporation shall have
the right to prepay the Securities, in whole or in part, at any time on or after
the Initial Optional Redemption Date, upon not less than 30 days and not more
than 60 days' written notice, at the Prepayment Price.
If the Securities are only partially prepaid pursuant to this Section
14.02, the Securities to be prepaid shall be selected on a pro rata basis not
more than 60 days prior to the date fixed for prepayment from the outstanding
Securities not previously called for prepayment; provided, however, that with
respect to Securityholders that would be required to hold Securities with an
aggregate principal amount of less than $25 but more than an aggregate principal
amount of zero as a result of such pro rata prepayment, the Corporation shall
prepay Securities of each such Securityholder so that after such prepayment such
Securityholder shall hold Securities either with
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an aggregate principal amount of at least $25 or such Securityholder no longer
holds any Securities, and shall use such method (including, without limitation,
by lot) as the Corporation shall deem fair and appropriate; provided, further,
that any such proration may be made on the basis of the aggregate principal
amount of Securities held by each Securityholder and may be made by making such
adjustments as the Corporation deems fair and appropriate in order that only
Securities in denominations of $25 or integral multiples thereof shall be
prepaid. The Prepayment Price shall be paid prior to 12:00 noon New York City
time, on the date of such prepayment or at such earlier time as the Corporation
determines, provided that the Corporation shall deposit with the Debenture
Trustee an amount sufficient to pay the Prepayment Price by 10:00 a.m., New York
City time, on the date such Prepayment Price is to be paid.
(b) Notwithstanding the first sentence of Section 14.02(a), upon the
entry of an order for dissolution of the Trust by a court of competent
jurisdiction, the Securities thereafter will be subject to optional prepayment,
in whole only, but not in part, on or after the Initial Optional Redemption
Date, at the applicable Prepayment Price and otherwise in accordance with this
Article XIV.
(c) Any prepayment of Securities pursuant to Section 14.01 or Section
14.02 shall be subject to the Corporation obtaining any and all required
regulatory approvals.
SECTION 14.03 No Sinking Fund.
The Securities are not entitled to the benefit of any sinking fund.
SECTION 14.04 Notice of Prepayment; Selection of Securities.
In case the Corporation shall desire to exercise the right to prepay
all, or, as the case may be, any part of the Securities in accordance with their
terms, it shall fix a date for prepayment and shall mail a notice of such
prepayment at least 30 and not more than 60 days' prior to the date fixed for
prepayment to the holders of Securities to be so prepaid as a whole or in part
at their last addresses as the same appear on the Security Register. Such
mailing shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Security designated for
prepayment as a whole or in part shall not affect the validity of the
proceedings for the prepayment of any other Security.
Each such notice of prepayment shall specify the CUSIP number of the
Securities to be prepaid, the date fixed for prepayment, the Prepayment Price at
which the Securities are to be prepaid (or the method by which such Prepayment
Price is to be calculated), the place or places of payment where payment will be
made upon presentation and surrender of the Securities, that interest accrued to
the date fixed for prepayment will be paid as specified in said notice, and that
on and after said date interest thereon or on the portions thereof to be prepaid
will cease to accrue. If less than all the Securities are to be prepaid, the
notice of prepayment shall specify the numbers of the Securities to be prepaid.
In case any Security is to be prepaid in part only, the notice of prepayment
shall state the portion of the principal amount thereof to be prepaid and shall
state that on and after
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the date fixed for prepayment, upon surrender of such Security, a new Security
or Securities in principal amount equal to the portion thereof that has not been
prepaid will be issued.
By 10:00 a.m., New York City time, on the prepayment date specified in
the notice of prepayment given as provided in this Section, the Corporation will
deposit with the Debenture Trustee or with one or more paying agents an amount
of money sufficient to prepay on the prepayment date all the Securities so
called for prepayment at the Prepayment Price .
SECTION 14.05 Payment of Securities Called for Prepayment.
If notice of prepayment has been given as provided in Section 14.04,
the Securities or portions 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 Prepayment Price (subject to the rights of holders
of Securities at the close of business on a regular record date in respect of an
Interest Payment Date occurring on or prior to the prepayment date) and on and
after said date (unless the Corporation shall default in the payment of such
Securities at the Prepayment Price interest (including Compounded Interest and
Additional Sums, if any) on the Securities or portions of Securities so called
for prepayment shall cease to accrue. On presentation and surrender of such
Securities at a place of payment specified in said notice, the said Securities
or the specified portions thereof shall be paid and prepaid by the Corporation
at the applicable Prepayment Price, (subject to the rights of holders of
Securities on the close of business on a regular record date in respect of an
Interest Payment Date occurring on or prior to the prepayment date).
Upon presentation of any Security prepaid in part only, the Corporation
shall execute and the Debenture Trustee shall authenticate and make available
for delivery to the holder thereof, at the expense of the Corporation, a new
Security or Securities of authorized denominations, in principal amount equal to
the portion of the Security so presented that has not been prepaid.
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01 Agreement to Subordinate
The Corporation covenants and agrees, and each holder of Securities
issued hereunder likewise covenants and agrees, that the Securities shall be
issued subject to the provisions of this Article XV; and each holder of a
Security, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
The payment by the Corporation of the principal of and interest
(including Compounded Interest and Additional Sums, if any) on all Securities
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be subordinated and subject in right of payment to the prior payment in full of
all amounts then due and payable in respect of Senior Indebtedness, whether
outstanding at the date of this Indenture or thereafter incurred.
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No provision of this Article XV shall prevent the occurrence of any
Default or Event of Default hereunder.
SECTION 15.02 Default on Senior Indebtedness.
In the event and during the continuation of any default by the
Corporation in the payment of principal, premium, interest or any other payment
due on any Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default and such acceleration has
not been rescinded or canceled, then, in either case, no payment shall be made
by the Corporation with respect to the principal (including prepayment payments)
of or interest on the Securities (including Compounded Interest and Additional
Sums, if any, or any other amounts which may be due on the Securities pursuant
to the terms hereof or thereof).
In the event of the acceleration of the maturity of the Securities,
then no payment shall be made by the Corporation with respect to the principal
(including prepayment payments) of or interest on the Securities (including
Compounded Interest and Additional Sums, if any, or any other amounts which may
be due on the Securities pursuant to the terms hereof or thereof) until the
holders of all Senior Indebtedness outstanding at the time of such acceleration
shall receive payment, in full, of all Allocable Amounts due on or in respect of
such Senior Indebtedness (including any amounts due upon acceleration).
In the event that, notwithstanding the foregoing, any payment is
received by the Debenture Trustee, or any Securityholder, when such payment is
prohibited by the preceding paragraphs of this Section 15.02, such payment shall
be held in trust for the benefit of, and shall be paid over or delivered by the
Debenture Trustee (if the Notice requested by Section 15.06 has been received by
the Debenture Trustee) or by any Securityholder, to the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent of
the Allocable Amounts in respect of such Senior Indebtedness and to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Debenture Trustee in writing within 90
days of such payment of the Allocable Amounts then due and owing on such Senior
Indebtedness, and only the Allocable Amounts specified in such notice to the
Debenture Trustee shall be paid to the holders of such Senior Indebtedness.
SECTION 15.03 Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Corporation or distribution of assets of the
Corporation of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution, winding-up, liquidation or reorganization of
the Corporation, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, the holders of all Senior Indebtedness of the
Corporation will first be entitled to receive payment in full of Allocable
Amounts of such Senior Indebtedness, before any payment is made by the
Corporation on account of the principal of or interest on the Securities
(including Compounded Interest and Additional Sums (if any) or any other amounts
which may be due on the Securities pursuant to the terms hereof or thereof); and
upon any such dissolution, winding-up, liquidation or reorganization, any
payment by the Corporation, or
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distribution of assets of the Corporation of any kind or character, whether in
cash, property or securities, which the Securityholders or the Debenture Trustee
would be entitled to receive from the Corporation, except for the provisions of
this Article XV, shall be paid by the Corporation or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Securityholders or by the Debenture Trustee under the
Indenture if received by them or it, directly to the holders of Senior
Indebtedness of the Corporation (pro rata to such holders on the basis of the
respective Allocable Amounts of Senior Indebtedness held by such holders, as
calculated by the Corporation) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Allocable Amounts
of Senior Indebtedness in full, in money or moneys worth, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Securityholders
or to the Debenture Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Corporation of any kind or character prohibited by
the foregoing, whether in cash, property or securities, shall be received by the
Debenture Trustee, or any Securityholder, before the Allocable Amounts of all
Senior Indebtedness is paid in full, or provision is made for such payment in
money in accordance with its terms, such payment or distribution shall be held
in trust for the benefit of and shall be paid over or delivered by the Debenture
Trustee (if the Notice requested by Section 15.06 has been received by the
Debenture Trustee) or by any Securityholder, to the holders of such Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Corporation, for application to the payment of all
Allocable Amounts of Senior Indebtedness remaining unpaid to the extent
necessary to pay all Allocable Amounts of such Senior Indebtedness in full in
money in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the benefit of the holders of such Senior
Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Corporation as
reorganized or readjusted, or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
XV with respect to the Securities to the payment of Senior Indebtedness that may
at the time be outstanding, provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of such Senior Indebtedness
are not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Corporation with, or the merger of the
Corporation into, another Person or the liquidation or dissolution of the
Corporation following the sale, conveyance, transfer or lease of its property as
an entirety, or substantially as an entirety, to another Person upon the terms
and conditions provided for in Article X of this Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 15.03 if such other Person shall, as a part of such consolidation,
merger, sale, conveyance, transfer or lease, comply with the conditions stated
in Article X of this Indenture. Nothing in Section 15.02 or in this Section
15.03 shall apply
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to claims of, or payments to, the Debenture Trustee under or pursuant to Section
6.06 of this Indenture.
SECTION 15.04 Subrogation.
Subject to the payment in full of all Senior Indebtedness, the rights
of the Securityholders shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Corporation, as the case may be, applicable to such Senior
Indebtedness until the principal of and interest on the Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or distributions
to the holders of such Senior Indebtedness of any cash, property or securities
to which the Securityholders or the Debenture Trustee would be entitled except
for the provisions of this Article XV, and no payment over pursuant to the
provisions of this Article XV to or for the benefit of the holders of such
Senior Indebtedness by Securityholders or the Debenture Trustee, shall, as
between the Corporation, its creditors other than holders of Senior Indebtedness
of the Corporation, and the holders of the Securities, be deemed to be a payment
by the Corporation to or on account of such Senior Indebtedness. It is
understood that the provisions of this Article XV are and are intended solely
for the purposes of defining the relative rights of the holders of the
Securities, on the one hand, and the holders of such Senior Indebtedness on the
other hand.
Nothing contained in this Article XV or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Corporation,
its creditors other than the holders of Senior Indebtedness of the Corporation,
and the holders of the Securities, the obligation of the Corporation, which is
absolute and unconditional, to pay to the holders of the Securities the
principal of and interest (including Compounded Interest and Additional Sums, if
any) on the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Securities and creditors of the Corporation, as the
case may be, other than the holders of Senior Indebtedness of the Corporation,
as the case may be, nor shall anything herein or therein prevent the Debenture
Trustee or the holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article XV of the holders of such Senior Indebtedness
in respect of cash, property or securities of the Corporation, as the case may
be, received upon the exercise of any such remedy.
SECTION 15.05 Debenture Trustee to Effectuate Subordination.
Each Securityholder, by such Securityholder's acceptance thereof,
authorizes and directs the Debenture Trustee on such Securityholder's behalf to
take such action (as the Debenture Trustee, in its discretion, deems necessary
or appropriate, upon instruction or otherwise) to effectuate the subordination
provided in this Article XV and appoints the Debenture Trustee such
Securityholder's attorney-in-fact for any and all such purposes.
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SECTION 15.06 Notice by the Corporation.
The Corporation shall give prompt written notice to a Responsible
Officer of the Debenture Trustee of any fact known to the Corporation that would
prohibit the making of any payment of monies to or by the Debenture Trustee in
respect of the Securities pursuant to the provisions of this Article XV.
Notwithstanding the provisions of this Article XV or any other provision of this
Indenture, the Debenture Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment of monies
to or by the Debenture Trustee in respect of the Securities pursuant to the
provisions of this Article XV, unless and until a Responsible Officer of the
Debenture Trustee shall have received written notice thereof from the
Corporation or a holder or holders of Senior Indebtedness or from any trustee
therefor; and before the receipt of any such written notice, the Debenture
Trustee, subject to the provisions of Article VI of this Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Debenture Trustee shall not have received the notice provided for in
this Section 15.06 at least two Business Days prior to the date upon which, by
the terms hereof, any money may become payable for any purpose (including,
without limitation, the payment of the principal of or interest (including
Compounded Interest and Additional Sums, if any) on any Security), then,
anything herein contained to the contrary notwithstanding, the Debenture Trustee
shall have full power and authority to receive such money and to apply the same
to the purposes for which they were received, and shall not be affected by any
notice to the contrary that may be received by it within two Business Days prior
to such date.
The Debenture Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on a written notice delivered
to it by a Person representing himself to be a holder of Senior Indebtedness of
the Corporation (or a trustee on behalf of such holder), as the case may be, to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Debenture Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XV, the Debenture Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Debenture Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article XV, and, if such
evidence is not furnished, the Debenture Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
Upon any payment or distribution of assets of the Corporation referred
to in this Article XV, the Debenture Trustee, subject to the provisions of
Article VI of this Indenture, and the Securityholders shall be entitled to
conclusively rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding-up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Debenture Trustee
or to the Securityholders, for the purpose of ascertaining the persons entitled
to participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of the
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Corporation, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
XV.
SECTION 15.07 Rights of the Debenture Trustee; Holders of Senior
Indebtedness.
The Debenture Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article XV in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Debenture
Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Corporation,
the Debenture Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XV, and
no implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Debenture Trustee.
The Debenture Trustee shall not be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness and, subject to the provisions of Article VI
of this Indenture, the Debenture Trustee shall not be liable to any holder of
such Senior Indebtedness if it shall pay over or deliver to Securityholders, the
Corporation or any other Person money or assets to which any holder of such
Senior Indebtedness shall be entitled by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to,
the Debenture Trustee under or pursuant to Section 6.06.
SECTION 15.08 Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness of
the Corporation 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 Corporation, as the case may be, or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Corporation, as the
case may be, with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Corporation may, at any time and from
time to time, without the consent of or notice to the Debenture Trustee or the
Securityholders, without incurring responsibility to the Securityholders and
without impairing or releasing the subordination provided in this Article XV or
the obligations hereunder of the holders of the Securities to the holders of
such Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any manner
for the collection of such Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Corporation, as the case may be, and any
other Person.
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ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01 Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing, the
Corporation shall have the right, at any time and from time to time during the
term of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 20 consecutive
quarterly periods, including the first such quarterly period during such
extension period (the "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable, provided that no
Extended Interest Payment Period shall end on a date other than an Interest
Payment Date or extend beyond the Maturity Date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 16.01, will
bear interest thereon at the applicable periodic Coupon Rate compounded
quarterly for each quarterly period during the Extended Interest Payment Period
("Compounded Interest"). At the end of the Extended Interest Payment Period, the
Corporation shall pay all interest accrued and unpaid on the Securities,
including any Additional Sums and Compounded Interest (together, "Deferred
Interest"), that shall be payable to the holders of the Securities in whose
names the Securities are registered in the Security Register on the record date
immediately preceding the end of the Extended Interest Payment Period. Before
the termination of any Extended Interest Payment Period, the Corporation may
further defer payments of interest by further extending such Extended Interest
Payment Period, provided that such Extended Interest Payment Period, together
with all such previous and further extensions within such Extended Interest
Payment Period, shall not (i) exceed 20 consecutive quarterly periods, including
the first such quarterly period during such Extended Interest Payment Period,
(ii) end on a date other than an Interest Payment Date or (iii) extend beyond
the Maturity Date of the Securities. Upon the termination of any Extended
Interest Payment Period and the payment of all amounts then due, the Corporation
may commence a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended Interest
Payment Period, except at the end thereof, but the Corporation may prepay at any
time all or any portion of the interest accrued during an Extended Interest
Payment Period.
SECTION 16.02 Notice of Extension.
(a) If the Property Trustee is the only holder of the Securities at the
time the Corporation elects to commence an Extended Interest Payment Period, the
Corporation shall give written notice to the Administrative Trustees, the
Property Trustee and the Debenture Trustee of its election to commence such
Extended Interest Payment Period at least five Business Days before the earlier
of (i) the next succeeding date on which Distributions on the Trust Securities
would have been payable, and (ii) the date the Property Trustee is required to
give notice of the record date, or the date such Distributions are payable, to
any national securities exchange or to holders of the Capital Securities, but in
any event at least five Business Days before such record date.
-61-
<PAGE> 69
(b) If the Property Trustee is not the only holder of the Securities at
the time the Corporation elects to commence an Extended Interest Payment Period,
the Corporation shall give the holders of the Securities and the Debenture
Trustee written notice of its election of such Extended Interest Payment Period
at least 10 Business Days before the earlier of (i) the next succeeding Interest
Payment Date, and (ii) the date the Debenture Trustee is required to give notice
of the record or payment date of such interest payment to any national
securities exchange.
(c) The quarterly period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 16.02 shall be counted as one of the 20
quarterly periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.
Wilmington Trust Company hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed by their respective officers thereunto duly authorized, as
of the day and year first above written.
HAMILTON BANCORP INC.
By:
-----------------------------
Eduardo A. Masferrer
Chairman of the Board and
Chief Executive Officer
WILMINGTON TRUST COMPANY
as Debenture Trustee
By:
-----------------------------
Name:
Title:
-62-
<PAGE> 70
EXHIBIT A
(FORM OF FACE OF SECURITY)
[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE
OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO
DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON 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 ANY PERSON IS WRONGFUL IN AS MUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
A-1
<PAGE> 71
HAMILTON BANCORP INC.
CUSIP No.: [_____________]
$[ ]
-----------------
Certificate No. [__]
[___]% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE December [__], 2028 Series A
Hamilton Bancorp Inc., a Florida corporation (the "Corporation," 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 December [__], 2028 (the "Maturity
Date"), unless previously prepaid, and to pay interest on the outstanding
principal amount hereof from December [__], 1998, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 31, June 30, September 30 and December 31
of each year, commencing March 31, 1999 at the rate of [___]% per annum until
the principal hereof shall have become due and payable, and on any overdue
principal and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded quarterly ("Compounded
Interest"). The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year consisting of twelve 30-day months. In
the event that any date on which the principal of or interest on this Security
is payable is not a Business Day (as defined in the Indenture), then the payment
payable on such date will be made on the next succeeding day that is a Business
Day, except that if such next succeeding Business Day falls in the next
succeeding calendar year such payment shall be made on the immediately preceding
Business Day (and without any interest or other payment in respect of any such
delay), with the same force and effect as if made on such date. Pursuant to the
Indenture, in certain circumstances the Corporation will be required to pay
Additional Sums (as defined in the Indenture) with respect to this Security.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest installment, which shall be one
Business Day prior to the relevant Interest Payment Date for Global Securities
and the 15th day of the month in which the relevant Interest Payment Date falls
for Definitive Securities. Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the holders on such
regular record date and may be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on a special record date to be fixed by the Debenture Trustee for the payment of
such defaulted interest, notice whereof shall be given to the holders of
Securities not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities
A-2
<PAGE> 72
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
The principal of and interest (including Compounded Interest and
Additional Sums, if any) on this Security shall be payable at the office or
agency of the Debenture Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Corporation by (i) check mailed to
the holder at such address as shall appear in the Security Register or (ii)
transfer to an account maintained by the Person entitled thereto, provided that
proper written transfer instructions have been received by the relevant record
date. Notwithstanding the foregoing, so long as the holder of this Security is
the Property Trustee of Hamilton Capital Trust I, the payment of the principal
of and interest (including Compounded Interest and Additional Sums, if any) on
this Security will be made at such place and to such account as may be
designated by such Property Trustee.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Debenture Trustee on his or her
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Debenture Trustee
his or her attorney-in-fact for any and all such purposes. Each holder hereof,
by his or her acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the Indenture
or be valid or become obligatory for any purpose until the Certificate of
Authentication hereon shall have been signed by or on behalf of the Debenture
Trustee.
The Corporation is treating the Securities as issued with original
issue discount. The Corporation will provide holders the issue price, the amount
of original issue discount, the issue date and the yield to maturity of the
Securities.
The provisions of this Security are continued on the reverse side
hereof and such provisions shall for all purposes have the same effect as though
fully set forth at this place.
A-3
<PAGE> 73
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed and sealed this [___] day of [_________], 1998.
HAMILTON BANCORP INC.
By:
-------------------------------
Name:
Title:
Attest:
By:
------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the [___]% Junior Subordinated Deferrable Interest
Debentures Series A of HAMILTON BANCORP INC. referred to in the within-mentioned
Indenture.
WILMINGTON TRUST COMPANY
not in its individual capacity but solely as
Debenture Trustee
Dated: By:
-------------------- ------------------------------------------
Authorized Signatory
A-4
<PAGE> 74
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Corporation (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of December
[__], 1998 (the "Indenture"), duly executed and delivered between the
Corporation and Wilmington Trust Company, as Debenture Trustee (the "Debenture
Trustee"), to which Indenture reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Debenture Trustee, the Corporation and the holders of the Securities.
Upon the occurrence and continuation of a Special Event (as defined in
the Indenture) prior to [_________ ___], 2003 (the "Initial Optional Redemption
Date"), the Corporation shall have the right, at any time within 90 days
following the occurrence of such Special Event, to prepay this Security in whole
(but not in part) at the Prepayment Price. "Prepayment Price" shall mean, with
respect to any prepayment of this Security, an amount in cash equal to 100% of
the principal amount to be prepaid plus any accrued and unpaid interest
(including Compounded Interest and Additional Sums, if any) thereon to the date
of such prepayment.
In addition, the Corporation shall have the right to prepay this
Security, in whole or in part, at any time on or after the Initial Optional
Redemption Date (an "Optional Prepayment"), at the Prepayment Price.
The Prepayment Price shall be paid prior to 12:00 noon, New York City
time, on the date of such prepayment or at such earlier time as the Corporation
determines, provided that the Corporation shall deposit with the Debenture
Trustee an amount sufficient to pay the Prepayment Price by 10:00 a.m., New York
City time, on the date such Prepayment Price is to be paid. Any prepayment
pursuant to this paragraph will be made upon not less than 30 days nor more than
60 days' prior written notice.
If the Securities are only partially prepaid by the Corporation
pursuant to an Optional Prepayment, the particular Securities to be prepaid
shall be selected on a pro rata basis from the outstanding Securities not
previously called for prepayment; provided, however, that with respect to
Securityholders that would be required to hold Securities with an aggregate
principal amount of less than $25 but more than an aggregate principal amount of
zero as a result of such pro rata prepayment, the Corporation shall prepay
Securities of each such Securityholder so that after such prepayment such
Securityholder shall hold Securities either with an aggregate principal amount
of at least $25 or such Securityholder no longer holds any Securities and shall
use such method (including, without limitation, by lot) as the Corporation shall
deem fair and appropriate; provided, further, that any such proration may be
made on the basis of the aggregate principal amount of Securities held by each
Securityholder thereof and may be made by making such adjustments as the
Corporation deems fair and appropriate in order that only Securities in
denominations of $25 or integral multiples thereof shall be prepaid. In the
event of prepayment of this Security in part only, a new Security or Securities
for the portion hereof that has not been prepaid will be issued in the name of
the holder hereof upon the cancellation hereof.
A-5
<PAGE> 75
Notwithstanding the foregoing, any prepayment of Securities by the
Corporation shall be subject to the receipt of any and all required regulatory
approvals.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Corporation and the
Debenture Trustee, with the consent of the holders of a majority in aggregate
principal amount of the Securities at the time outstanding (as defined in the
Indenture), to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of modifying in any manner the rights of the holders of the
Securities; provided, however, that no such supplemental indenture shall,
without the consent of each holder of Securities then outstanding and affected
thereby, (i) change the Maturity Date of any Security, or reduce the rate or
extend the time of payment of interest thereon (subject to Article XVI of the
Indenture), or reduce the principal amount thereof, or change any of the
prepayment provisions or make the principal thereof or any interest thereon
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for payment thereof, or (ii)
reduce the aforesaid percentage of Securities the holders of which are required
to consent to any such supplemental indenture. The Indenture also contains
provisions permitting the holders of a majority in aggregate principal amount of
the Securities at the time outstanding affected thereby, on behalf of all of the
holders of the Securities, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in the payment of the
principal of or interest on any of the Securities or a default in respect of any
covenant or provision under which the Indenture cannot be modified or amended
without the consent of each holder of Securities then outstanding. Any such
consent or waiver by the holder of this Security (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Security and of any Security issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of and interest
(including Compounded Interest and Additional Sums, if any) on this Security at
the time and place and at the rate and in the money herein prescribed.
So long as no Event of Default shall have occurred and be continuing,
the Corporation shall have the right, at any time and from time to time during
the term of the Securities, to defer payments of interest by extending the
interest payment period (an "Extended Interest Payment Period") of such
Securities for a period not (i) exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such extension period, (ii)
extending beyond the Maturity Date of the Securities or (iii) ending on a date
other than an Interest Payment Date, at the end of which period the Corporation
shall pay all interest then accrued and unpaid (together with interest thereon
at the rate specified for the Securities to the extent that payment of such
interest is enforceable under
A-6
<PAGE> 76
applicable law). Before the termination of any such Extended Interest Payment
Period, the Corporation may further defer payments of interest by further
extending such Extended Interest Payment Period, provided that such Extended
Interest Payment Period, together with all such previous and further extensions
within such Extended Interest Payment Period, (i) shall not exceed 20
consecutive quarterly periods including the first quarterly period during such
Extended Interest Payment Period, (ii) shall not end on any date other than an
Interest Payment Date, and (iii) shall not extend beyond the Maturity Date of
the Securities. Upon the termination of any such Extended Interest Payment
Period and the payment of all accrued and unpaid interest and any additional
amounts then due, the Corporation may commence a new Extended Interest Payment
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extended Interest Payment Period, except at the end thereof,
but the Corporation may prepay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.
The Corporation has agreed that if (1) there shall have occurred any
event of which the Corporation has actual knowledge that (a) is, or with the
giving of notice or the lapse of time, or both, would constitute, an Event of
Default and (b) in respect of which the Corporation shall not have taken
reasonable steps to cure, (2) if the Securities are held by the Property Trustee
of Hamilton Capital Trust I, the Corporation shall be in default with respect to
its payment of any obligations under the Capital Securities Guarantee or (3) the
Corporation shall have given notice of its election to exercise its right to
commence an Extended Interest Payment Period, and shall not have rescinded such
Notice, and such Extended Interest Payment Period or any extension thereof shall
have commenced and be continuing, it will not (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Corporation's capital stock, (ii) make any payment
of principal of or interest or premium, if any, on or repay, repurchase or
redeem any debt securities (including other Debentures) of the Corporation that
rank pari passu with or junior in right of payment to the Securities or (iii)
make any guarantee payments with respect to any guarantee by the Corporation of
the debt securities of any Subsidiary of the Corporation (including Other
Guarantees) if such guarantee ranks pari passu with or junior in right of
payment to the Securities (other than (a) dividends or distributions of
Corporation's capital stock (which includes Common Stock and preferred stock),
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Capital Securities Guarantee, as defined in the Indenture,
(d) as a result of a reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the Corporation's capital stock
for another class or series of the Corporation's capital stock, (e) the purchase
of fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, and (f) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Corporation's benefit or
compensation plans for its directors, officers or employees or any of the
Corporation's dividend reinvestment plans).
Subject to (i) the Corporation having received any required regulatory
approvals and (ii) the Administrative Trustees of Hamilton Capital Trust I
having received an opinion of counsel to the effect that such distribution will
not cause the holders of Capital Securities to recognize gain or loss for
federal income tax purposes, the Corporation will have the right at any time to
liquidate the Trust
A-7
<PAGE> 77
and, after satisfaction of liabilities of creditors of the Trust as required by
applicable law, to cause the Securities to be distributed to the holders of the
Trust Securities in liquidation of the Trust.
The Securities are issuable only in registered form without coupons in
minimum denominations of $25 and multiples of $25 in excess thereof. As provided
in the Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Security is transferable by
the holder hereof on the Security Register of the Corporation, upon surrender of
this Security for registration of transfer at the office or agency of the
Corporation in Wilmington, Delaware accompanied by a written instrument or
instruments of transfer in form satisfactory to the Corporation or the Debenture
Trustee duly executed by the holder hereof or his or her attorney duly
authorized in writing, and thereupon one or more new Securities of authorized
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be made for any
such registration of transfer, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Security,
the Corporation, the Debenture Trustee, any authenticating agent, any paying
agent, any transfer agent and the security registrar may deem and treat the
holder hereof as the absolute owner hereof (whether or not this Security shall
be overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the security registrar for the Securities) for the purpose of
receiving payment of or on account of the principal hereof and (subject to the
Indenture) interest due hereon and for all other purposes, and neither the
Corporation nor the Debenture Trustee nor any authenticating agent nor any
paying agent nor any transfer agent nor any security registrar shall be affected
by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
interest (including Compounded Interest and Additional Sums, if any) on this
Security, or for any claim based hereon, or otherwise in respect hereof, or
based on or in respect of the Indenture, against any incorporator, stockholder,
employee, officer or director, past, present or future, as such, of the
Corporation or of any predecessor or successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PRINCIPLES THEREOF.
A-8
<PAGE> 1
EXHIBIT 5.1
[Form of Opinion of Greenberg Traurig, P.A.]
December __, 1998
Hamilton Capital Trust I
Hamilton Bancorp Inc.
3750 N.W. 87th Avenue
Miami, Florida 33178
Ladies and Gentlemen:
We have acted as counsel to Hamilton Bancorp Inc., a Florida
corporation (the "Company"), and Hamilton Capital Trust I, a business trust
formed under the Business Trust Act of the State of Delaware (the "Trust"), in
connection with the preparation of the Registration Statement on Form S-3 filed
by the Company and the Trust with respect to the registration under the
Securities Act of 1933, as amended (the "Act"), of (i) the guarantee by the
Company of up to 1,265,000 of the Trust's _____% Beneficial Unsecured
Securities, Series A, liquidation amount of $10 per capital security (the
"Series A Capital Securities"), with respect to distributions and payments upon
liquidation, redemption and otherwise (the "Guarantee"), (ii) up to $12,650,000
principal amount of _____% Junior Subordinated Deferrable Interest Debentures
due __________, 2028 (the "Junior Subordinated Debentures") to be issued by the
Company and (iii) the Series A Capital Securities.
This opinion is being provided in accordance with the requirements of
Item 601(b)(5) of Regulation S-K promulgated under the Act.
In connection with this opinion, we have reviewed originals or copies,
certified or otherwise identified to our satisfaction, of the following
documents:
(i) the Registration Statement on Form S-3 (File No. 333-68453) as
filed by the Company and the Trust with the Securities and Exchange Commission
(the "Commission") on December 7, 1998, as amended on December 10, 1998 and
December __, 1998 (the Registration Statement as amended is referred to as the
"Registration Statement");
(ii) the Certificate of Trust of the Trust filed with the Secretary of
State of the State of Delaware on December 3, 1998;
(iii) the Amended and Restated Trust Agreement of the Trust, dated as
of December __, 1998 (the "Declaration"), among Wilmington Trust Company, as
property trustee (the "Property Trustee"), Wilmington Trust Company, as Delaware
trustee, Hamilton Bancorp, Inc., as sponsor and debenture issuer and John M.R.
Jacobs, Marilyn Alvarado and Lynn Hernandez, the administrative trustees of the
Trust;
(iv) the form of the Series A Capital Securities and a specimen
certificate thereof;
<PAGE> 2
Hamilton Capital Trust I
Hamilton Bancorp Inc.
December __, 1998
Page 2
(v) an executed copy of the Indenture, dated as of December __, 1998
(the "Indenture"), between Wilmington Trust Company, as Indenture Trustee, and
the Company;
(vi) the form of the Junior Subordinated Debentures and a specimen
certificate thereof;
(vii) the Guarantee;
(viii) the Articles of Incorporation and Bylaws of the Company
certified by the Secretary of the Company; and
(ix) resolutions adopted by the Board of Directors of the Company on
December __, 1998, certified by the Secretary of the Company.
Based upon our review of the foregoing documents, and subject to the
qualifications set forth below, it is our opinion that when the Registration
Statement becomes effective:
1. The Guarantee has been duly authorized by the Company, and when (a)
the Declaration and Indenture have been qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and (b) the Guarantee is duly
executed and delivered by the Company, the Guarantee will constitute a valid,
legal and binding agreement of the Company in favor of the holders of Series A
Capital Securities, enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited by (i)
rights of the United States of America under the Federal Tax Lien Act of 1966;
(ii) applicable liquidation, conservatorship, bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization or similar debtor relief laws
or laws relating to or affecting creditors' rights generally from time to time
in effect under state and Federal law; (iii) general principles of equity
(whether considered in a proceeding in equity or at law); (iv) the exercise of
the discretionary powers of any court or other authority before which may be
brought any proceeding seeking equitable remedies, including, without
limitation, specific performance and injunctive relief; (v) public policy or
other limitations on indemnification or contribution under applicable securities
laws; or (vi) the effect of certain laws, regulations and judicial or other
decisions upon the availability and enforceability of certain covenants,
remedies and other provisions, including, without limitation, the remedies of
specific performance and self-help and provisions imposing penalties,
forfeitures and liquidated damages and waiving objections to venue and forum.
2. The Junior Subordinated Debentures have been duly authorized for
issuance by the Company, and when (a) the Declaration and Indenture have been
qualified under the Trust Indenture Act, and (b) the Junior Subordinated
Debentures are duly executed, authenticated and issued in accordance with the
Indenture, the Junior Subordinated Debentures will constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be limited by (i)
rights of the United States of America under the Federal Tax Lien Act of 1966;
(ii) applicable liquidation, conservatorship, bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization or similar debtor relief laws
or laws relating to or affecting creditors' rights generally from time to
<PAGE> 3
Hamilton Capital Trust I
Hamilton Bancorp Inc.
December __, 1998
Page 3
time in effect under state and Federal law; (iii) general principles of equity
(whether considered in a proceeding in equity or at law); (iv) the exercise of
the discretionary powers of any court or other authority before which may be
brought any proceeding seeking equitable remedies, including, without
limitation, specific performance and injunctive relief; (v) public policy or
other limitations on indemnification or contribution under applicable securities
laws; or (vi) the effect of certain laws, regulations and judicial or other
decisions upon the availability and enforceability of certain covenants,
remedies and other provisions, including, without limitation, the remedies of
specific performance and self-help and provisions imposing penalties,
forfeitures and liquidated damages and waiving objections to venue and forum.
3. The Series A Capital Securities have been duly authorized for
issuance by the Trust, and when (a) the Declaration has been qualified under the
Trust Indenture Act, and (b) the Series A Capital Securities are duly executed,
authenticated and issued in accordance with the Declaration, the Series A
Capital Securities will represent, subject to the qualifications set forth in
paragraph 4 below, fully paid and nonassessable undivided beneficial interests
in the assets of the Trust and will entitle the holders thereof to the benefits
of the Declaration except to the extent that enforcement of the Declaration may
be limited by (i) rights of the United States of America under the Federal Tax
Lien Act of 1966; (ii) applicable liquidation, conservatorship, bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization or similar debtor
relief laws or laws relating to or affecting creditors' rights generally from
time to time in effect under state and Federal law; (iii) general principles of
equity (whether considered in a proceeding in equity or at law); (iv) the
exercise of the discretionary powers of any court or other authority before
which may be brought any proceeding seeking equitable remedies, including,
without limitation, specific performance and injunctive relief; (v) public
policy or other limitations on indemnification or contribution under applicable
securities laws; or (vi) the effect of certain laws, regulations and judicial or
other decisions upon the availability and enforceability of certain covenants,
remedies and other provisions, including, without limitation, the remedies of
specific performance and self-help and provisions imposing penalties,
forfeitures and liquidated damages and waiving objections to venue and forum.
4. The holders of the Series A Capital Securities 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 bring to your attention, however, that the holders of the Series
A Capital Securities may be obligated, pursuant to the Declaration, to (a)
provide indemnity and/or security in connection with, and pay taxes or
governmental charges arising from, transfers of Series A Capital Securities and
(b) provide security and indemnity in connection with requests of or directions
to the Property Trustee to exercise its rights and powers under the Declaration.
In providing the foregoing opinions we have assumed, without
investigation, the authenticity of documents submitted to us as originals, the
conformity to the originals of any document submitted to us as a copy, the
authenticity of the originals of such documents submitted to us as copies, the
genuineness of all signatures and the legal capacities of natural persons. In
<PAGE> 4
Hamilton Capital Trust I
Hamilton Bancorp Inc.
December __, 1998
Page 4
addition, we have assumed that each of the entities or persons other than the
Company, the Trust and their respective representatives executing the documents
had the power and authority to enter into and perform all of its obligations
under such documents, and have also assumed the due execution and delivery of
these documents by each such entity or person. We have relied on the opinion of
Richards, Layton & Finger as to certain matters involving Delaware law.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the caption "Validity of Securities" in the prospectus which
forms a part of the Registration Statement. In giving this consent, we do not
thereby admit that we are included in the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission.
This opinion is expressed as of the date hereof, and we disclaim any
undertaking to advise you of any subsequent changes in the facts stated or
assumed herein or of any subsequent changes in applicable law.
Very truly yours,
Greenberg Traurig, P.A.
<PAGE> 1
[FORM OF OPINION OF RICHARDS, LAYTON & FINGER]
EXHIBIT 5.2
RICHARDS, LAYTON & FINGER
A PROFESSIONAL ASSOCIATION
ONE RODNEY SQUARE
P.O. BOX 551
WILMINGTON, DELAWARE 19899
TELEPHONE: (302) 658-6541
TELECOPIER: (302) 658-6548
WEBSITE: WWW.RLF.COM
December 18, 1998
Hamilton Bancorp Inc.
3750 N.W. 87th Avenue
Miami Florida 33178
Re: HAMILTON CAPITAL TRUST I
------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Hamilton Bancorp Inc., a
Florida corporation (the "Company") and Hamilton Capital Trust I, a Delaware
business trust (the "Trust") in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, as filed with the office of
the Secretary of State of the State of Delaware (the "Secretary of State") on
December 3, 1998;
(b) The Declaration of Trust, dated as of December 2, 1998, among the
Company and the trustees named therein;
(c) The Registration Statement, (the "Registration Statement"), on
Form S-3, including a preliminary prospectus with respect to the Trust (the
"Prospectus"), relating to this offering of ___% Beneficial Unsecured
Securities, Series A (the "Series A Capital Securities"), which was filed by
the Company and the Trust with the Securities and Exchange Commission on
December 7, 1998;
(d) The Amended and Restated Declaration of Trust to be entered into
by the Company and the trustees of the Trust named therein (the "Declaration"),
in the form attached as an exhibit to the Registration Statement.
<PAGE> 2
Hamilton Capital Trust I
December 18, 1998
Page 2
(e) A Certificate of Good Standing for the Trust, dated December 18,
1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in
paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent
with the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Declaration and the Certificate of Trust
will be in full force and effect and will not have been amended, (ii) except to
the extent provided in paragraph 1 below, the due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its organization or formation, (iii) the legal capacity of natural
persons who are parties to the documents examined by us, (iv) that each of the
parties to the documents examined by us has the power and authority to execute
and deliver, and to perform its obligations under, such documents, (v) the due
authorization, execution and delivery by all parties thereto of all documents
examined by us, (vi) the receipt by each Person to whom a Series A Capital
Security is to be issued by the Trust (collectively, the "Series A Capital
Security Holders") of a Series A Capital Security Certificate for such Series A
Capital Security and the payment for such Series A Capital Security, in
accordance with the Declaration and the Prospectus and (vii) that the Series A
Capital Securities have been issued and sold to the Series A Capital Security
Holders in accordance with the Declaration and the Prospectus. We have not
participated in the preparation of the Registration Statement or the Prospectus
and assume no responsibility for their contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
<PAGE> 3
Hamilton Capital Trust I
December 18, 1998
Page 3
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 Business Trust Act.
2. The Series A Capital Securities of the Trust will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable beneficial interests in the assets of the Trust.
3. The Series A Capital Securities 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 Series A
Capital Securities Holders may be obligated to make payments as set forth in
the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Validity of Securities" 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. We also consent to Greenberg
Traurig, P.A.'s relying as to matters of Delaware law upon this opinion in
connection with opinions to be rendered by them with respect to the Series A
Capital Securities.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
EAM/wrm
<PAGE> 1
EXHIBIT 8.1
[FORM OF TAX OPINION OF GREENBERG TRAURIG, P.A.]
December 17, 1998
CIBC Oppenheimer Corp.
Raymond James & Associates, Inc.
c/o CIBC Oppenheimer Corp.
World Financial Center
New York, NY 10281
Re: Hamilton Capital Trust I
_____% Beneficial Unsecured Securities, Series A
------------------------------------------------
Ladies and Gentlemen:
We have acted as tax counsel for Hamilton Bancorp Inc., a Florida
corporation (the "Corporation"), and Hamilton Capital Trust I, a statutory
business trust organized under the Business Trust Act of the State of Delaware
(the "Trust"), in connection with the issuance and sale by the Trust of up to
1,265,000 _____% Beneficial Unsecured Securities, Series A (liquidation amount
$10 per security) (the "Series A Capital Securities"), which Series A Capital
Securities represent undivided beneficial interests in the assets of the Trust,
pursuant to an Underwriting Agreement, dated December ___, 1998, among the
Corporation, the Trust, and the purchasers named therein (the "Underwriting
Agreement"). The Series A Capital Securities will be guaranteed by the
Corporation as to payments of distributions and payments upon liquidation or
redemption, to the extent set forth in (i) the Series A Capital Securities
Guarantee Agreement, dated as of December ___, 1998 (the "Guarantee"), between
the Corporation and Wilmington Trust Company, as Guarantee Trustee, (ii) the
Corporation's __% Junior Subordinated Deferrable Interest Debentures due
December __, 2028, Series A (the "Subordinated Debentures"), (iii) the
Indenture, dated as of December __, 1998 (the "Indenture"), between the
Corporation and Wilmington Trust Company, as indenture trustee, and (iv) the
Amended and Restated Declaration of Trust for the Trust, dated as of December
__, 1998 (the "Declaration"), by and among the Corporation, Wilmington Trust
Company, as Property Trustee and Delaware Trustee, and the Administrative
Trustees named therein. Capitalized terms not otherwise defined in this opinion
have the meanings ascribed to them in the Underwriting Agreement.
Concurrently with the Trust's issuance of the Series A Capital
Securities and the Corporation's purchase of the common securities of the Trust
(the "Series A Common Securities"), representing common beneficial interests in
the assets of the Trust, the Trust will use the proceeds to invest in
$11,000,000 aggregate principal amount of Subordinated Debentures pursuant to
the Indenture.
In rendering the opinions set forth below, we have examined those
documents and records we have deemed appropriate, including the following:
1. The Registration Statement of the Corporation and the Trust on
Form S-3, as initially filed with the Securities and Exchange
Commission on December 7, 1998,
<PAGE> 2
CIBC Oppenheimer Corp.
Raymond James & Associates, Inc.
December __, 1998
Page 2
as amended (including the documents incorporated therein by
reference), and the Prospectus forming a part of such
registration statement (the "Prospectus");
2. Executed counterparts of the Declaration;
3. Executed counterparts of the Underwriting Agreement;
4. A specimen of the Series A Capital Securities;
5. A specimen of the Series A Common Securities;
6. Executed counterparts of the Guarantee;
7. Executed counterparts of the Common Securities Guarantee
Agreement, dated as of December __, 1998, of the Corporation;
8. Executed counterparts of the Indenture;
9. A specimen of the Subordinated Debentures;
10. Executed counterparts of the Debenture Subscription Agreement,
dated as of December __, 1998, between the Corporation and the
Trust (the "Debenture Subscription Agreement");
11. Executed letter of representation to The Depository Trust
Company, dated December __, 1998, among the Trust, as issuer,
and Wilmington Trust Company, as Property Trustee, regarding
the Series A Capital Securities; and
12. A representation letter from the Corporation setting forth
certain factual matters relating to the above-referenced
transaction and attached hereto as EXHIBIT A (combined with
items (1) through (11), the "Documents").
In addition, we have investigated those matters of law as we consider
appropriate as a basis for the opinions expressed below. Further, we have
assumed the genuineness of all signatures and the authenticity of all documents
submitted to us as originals. Our opinions are also based on the assumption that
there are no agreements or understandings with respect to the transactions
contemplated in the Documents other than those contained in the Documents.
Furthermore, our opinions are based on the assumption that all parties to the
Documents will comply with the terms thereof, including all tax reporting
requirements contained therein.
Based upon the foregoing and in consideration of those other matters we
have deemed appropriate, it is our opinion that:
A. The Trust will not be classified as an association taxable as a
corporation for federal income tax purposes.
<PAGE> 3
CIBC Oppenheimer Corp.
Raymond James & Associates, Inc.
December ___, 1998
Page 3
B. The Subordinated Debentures will be treated as indebtedness of the
Corporation for federal income tax purposes.
C. Although the discussion set forth in the Prospectus under the
heading "Certain Federal Income Tax Consequences" does not purport to discuss
all possible U.S. federal income tax consequences of the purchase, ownership and
disposition of the Series A Capital Securities, that discussion constitutes, in
all material respects, a fair and accurate summary of the U.S. federal income
tax consequences of the purchase, ownership and disposition of the Series A
Capital Securities under current law.
The opinions set forth herein are based upon the existing provisions of
the Internal Revenue Code of 1986, as amended and Treasury regulations issued or
proposed thereunder, published administrative positions of the Internal Revenue
Service and existing case law, any of which could be changed at any time. Any
change could be retroactive in application and could modify the legal
conclusions upon which these opinions are based. The opinions expressed herein
are limited as described above, and we do not express any opinion on any other
legal or tax aspect of the transactions contemplated herein.
In rendering the foregoing opinions, we express no opinion as to the
laws of any jurisdiction other than the federal income tax laws of the United
States. These opinions will not be updated for subsequent changes or
modification to the law or regulations or to the judicial or administrative
interpretations thereof unless we are engaged specifically to do so. These
opinions are rendered only to those to whom this letter is addressed and may not
be relied on in connection with any transactions other than the transactions
contemplated herein. These opinions may not be relied upon for any other
purpose, or relied upon by any other person, firm or corporation for any
purpose, without our prior written consent.
Very truly yours,
GREENBERG TRAURIG, P.A.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 2 to
Registration Statement No. 333-68453 of Hamilton Bancorp Inc. on Form S-3 of
our report dated January 30, 1998, appearing in the Annual Report on Form 10-K
of Hamilton Bancorp Inc. for the year ended December 31, 1997 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
such Registration Statement.
/s/ Deloitte & Touche LLP
Miami, Florida
December 18, 1998
