<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON , 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
RELIANCE BANCORP, INC. RELIANCE CAPITAL TRUST I
(Exact Name of Registrant as Specified in its Charter) (Exact Name of Registrant as Specified in its
DELAWARE Trust Agreement)
(State or Other Jurisdiction DELAWARE
of Incorporation or Organization) (State or Other Jurisdiction
6035 of Incorporation or Organization)
(Primary Standard Industrial 6719
Classification Code Number) (Primary Standard Industrial
11-3187176 Classification Code Number)
(I.R.S. Employer Identification Number) 11-3444763
585 STEWART AVENUE (I.R.S. Employer Identification Number)
GARDEN CITY, NEW YORK 11530 585 STEWART AVENUE
(516) 229-9300 GARDEN CITY, NEW YORK 11530
(Address, including Zip Code and Telephone Number, (516) 229-9300
including Area Code, of Registrant's Principle (Address, including Zip Code and Telephone
Executive Offices) Number,
RAYMOND A. NIELSEN including Area Code, of Registrant's Principle
PRESIDENT AND CHIEF EXECUTIVE OFFICER Executive Offices)
585 STEWART AVENUE RAYMOND A. NIELSEN
GARDEN CITY, NEW YORK 11530 ADMINISTRATIVE TRUSTEE
(516) 229-9300 585 STEWART AVENUE
(Name, Address, including Zip Code and Telephone Number, GARDEN CITY, NEW YORK 11530
including Area Code, of Agent for Service) (516) 229-9300
(Name, Address, including Zip Code and Telephone
Number,
including Area Code, of Agent for Service)
</TABLE>
------------------------------
COPIES TO:
THOMAS J. HAGGERTY, ESQ.
LAWRENCE M.F. SPACCASI, ESQ.
MULDOON, MURPHY & FAUCETTE
5101 WISCONSIN AVENUE, N.W.
WASHINGTON, D.C. 20016
(202) 362-0840
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
CLASS OF SECURITIES BEING TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED (1) PER UNIT PRICE (2) FEE (2)
<S> <C> <C> <C> <C>
8.17% Capital Securities, Series B, of Reliance
Capital Trust I................................. $50,000,000 100% $50,000,000 $14,750
8.17% Junior Subordinated Deferrable Interest
Debentures, Series B, of Reliance Bancorp,
Inc............................................. $50,000,000 100% $50,000,000 N/A
Series B Capital Securities Guarantee of Reliance
Bancorp, Inc.(3)................................ N/A N/A N/A N/A
Total............................................. $50,000,000 100% $50,000,000 $14,750
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the 8.17% Junior Subordinated
Deferrable Interest Debentures, Series B, of Reliance Capital Trust I (the
"Junior Subordinated Debentures") distributed upon any liquidation of
Reliance Capital Trust I.
(3) No separate consideration will be received for the Series B Capital
Securities Guarantee of Reliance Bancorp, Inc.
------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
PROSPECTUS SUBJECT TO COMPLETION
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
RELIANCE CAPITAL TRUST I
OFFER TO EXCHANGE ITS
8.17% CAPITAL SECURITIES, SERIES B
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
8.17% CAPITAL SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
RELIANCE BANCORP, INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
TIME, ON , 1998, UNLESS EXTENDED.
------------------------
Reliance Capital Trust I, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby offers, upon the terms and
subject to the conditions set forth in this Prospectus (as the same may be
amended or supplemented from time to time, the "Prospectus") and in the
accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange up to $50,000,000 aggregate Liquidation Amount of its 8.17%
Capital Securities, Series B (the "Exchange Capital Securities") which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for a like Liquidation Amount of its outstanding
8.17% Capital Securities, Series A (the "Original Capital Securities"), of which
$50,000,000 aggregate Liquidation Amount is outstanding. Pursuant to the
Exchange Offer, Reliance Bancorp, Inc., a Delaware corporation ("Reliance" or
the "Corporation"), is also offering to exchange (i) its guarantee of payment of
cash distributions and payments on liquidation of the Trust or redemption of the
Exchange Capital Securities (the "Exchange Guarantee") for a like guarantee in
respect of the Original Capital Securities (the "Original Guarantee") and (ii)
8.17% Junior Subordinated Deferrable Interest Debentures due May 1, 2028, Series
B (the "Exchange Junior Subordinated Debentures") for all of the outstanding
8.17% Junior Subordinated Deferrable Interest Debentures due May 1, 2028, Series
A (the "Original Junior Subordinated Debentures"), which Exchange Guarantee and
Exchange Junior Subordinated Debentures also have been registered under the
Securities Act. The Original Capital Securities, the Original Guarantee and the
Original Junior Subordinated Debentures are collectively referred to herein as
the "Original Securities" and the Exchange Capital Securities, the Exchange
Guarantee and the Exchange Junior Subordinated Debentures are collectively
referred to herein as the "Exchange Securities."
The terms of the Exchange Securities are identical in all material respects
to the respective terms of the Original Securities, except that (i) the Exchange
Securities have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer under federal and state
securities laws applicable to the Original Securities, (ii) the Exchange Capital
Securities will not provide for any increase in the Distribution rate thereon
and (iii) the Exchange Junior Subordinated Debentures will not provide for any
increase in the interest rate thereon. See "Description of Exchange Securities"
and "Description of Original Securities." The Exchange Capital Securities are
being offered for exchange in order to satisfy certain obligations of the
Corporation and the Trust under a Registration Rights Agreement, dated as of
April 23, 1998 (the "Registration Rights Agreement"), among the Corporation, the
Trust and Sandler O'Neill & Partners, L.P. and Keefe, Bruyette & Woods, Inc.
(the "Initial Purchasers"). In the event that the Exchange Offer is consummated,
any Original Capital Securities which remain outstanding after consummation of
the Exchange Offer and the Exchange Capital Securities issued in the Exchange
Offer will vote together as a single class for purposes of determining whether
holders of the requisite percentage in outstanding Liquidation Amount thereof
have taken certain actions or exercised certain rights under the Trust Agreement
(as defined herein).
(CONTINUED ON THE FOLLOWING PAGE)
This Prospectus and the Letter of Transmittal are first being mailed to all
registered holders of Original Capital Securities on or about October , 1998.
SEE "RISK FACTORS" BEGINNING ON PAGE FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER ORIGINAL CAPITAL
SECURITIES IN THE EXCHANGE OFFER.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATIONS TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998.
<PAGE>
(CONTINUED FROM THE PREVIOUS PAGE)
As used herein, (i) the "Indenture" means the Indenture, dated as of April
28, 1998, between the Corporation and The Bank of New York, as Debenture Trustee
(the "Debenture Trustee"), as amended and supplemented from time to time, and
(ii) the "Trust Agreement" means the Amended and Restated Declaration of Trust
relating to the Trust among the Corporation, as Sponsor, The Bank of New York as
Property Trustee (the "Property Trustee"), The Bank of New York (Delaware), as
the Delaware Trustee (the "Delaware Trustee"), the Administrators named therein
(collectively, with the Property Trustee and the Delaware Trustee, the "Issuer
Trustees") , and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust, as amended and supplemented from time to
time. In addition, as the context may require, unless otherwise expressly
stated, (i) the term "Capital Securities" means the Original Capital Securities
and the Exchange Capital Securities, (ii) the term "Trust Securities" means the
Capital Securities and the Common Securities (as defined herein), (iii) the term
"Junior Subordinated Debentures" means the Original Junior Subordinated
Debentures and the Exchange Junior Subordinated Debentures and (iv) the term
"Guarantee" means the Original Guarantee and the Exchange Guarantee.
The Exchange Capital Securities and the Original Capital Securities
represent undivided beneficial interests in the assets of the Trust. The
Corporation is the owner of all of the beneficial interests represented by
common securities of the Trust (the "Common Securities"). The Trust exists for
the sole purpose of issuing the Trust Securities and investing the proceeds
thereof in the Junior Subordinated Debentures. The Exchange Junior Subordinated
Debentures will mature on May 1, 2028 (the "Stated Maturity Date"). The Exchange
Capital Securities will have a preference over the Common Securities under
certain circumstances with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise. See "Description of Capital
Securities--Subordination of Common Securities."
Except as provided below, the Exchange Capital Securities will be
represented by a global Capital Security in fully registered form, deposited
with a custodian for and registered in the name of a nominee of The Depository
Trust Company ("DTC"). Beneficial interests in the Exchange Capital Securities
will be shown on, and transfers thereof will be effected through, records
maintained by DTC and its participants. Beneficial interests in the Exchange
Capital Securities will trade in DTC's Same-Day Funds Settlement system and
secondary market trading activity in such interests therefore will settle in
immediately available funds. The Exchange Capital Securities will be issued, and
may be transferred, only in blocks having a Liquidation Amount of not less than
$100,000 (100 Capital Securities) and multiples of $1,000 in excess thereof. See
"Description of Capital Securities--Book Entry, Delivery and Form."
Holders of the Exchange Capital Securities as of the applicable record date,
will be entitled to receive cumulative cash distributions arising from the
payment of interest on the Exchange Junior Subordinated Debentures, payable
semi-annually in arrears on May 1 and November 1 of each year, commencing May 1,
1999, at the annual rate of 8.17% of the Liquidation Amount of $1,000 per Trust
Security ("Distributions"). Such Distributions will accumulate from the date of
the most recent Distribution payment date to which Distributions have been duly
paid or duly provided for with respect to the Exchange Capital Securities or the
Original Capital Securities which were exchanged for such Exchange Capital
Securities, or from April 28, 1998, the date of original issuance of the
Original Capital Securities. So long as no Debenture Event of Default (as
defined herein) has occurred and is continuing, the Corporation will have the
right to defer payments of interest on the Exchange Junior Subordinated
Debentures for a period not exceeding 10 consecutive semi-annual periods with
respect to each deferral period (each, an "Extension Period"), provided that an
Extension Period must end on an Interest Payment Date (as defined herein) and
may not extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Corporation may
elect to begin a new Extension Period, subject to the requirements set forth
herein. If and for so long as interest payments on the Exchange Junior
Subordinated Debentures are so deferred, Distributions on the Exchange Capital
Securities also will be deferred, and the Corporation will not be permitted,
subject to certain exceptions described herein, to declare or pay any cash
distributions with respect to the Corporation's capital stock or to make any
2
<PAGE>
payment with respect to debt securities of the Corporation that rank PARI PASSU
with or junior to the Junior Subordinated Debentures. During an Extension
Period, interest on the Exchange Junior Subordinated Debentures will continue to
accrue (and the amount of Distributions to which holders of the Exchange Capital
Securities are entitled will continue to accumulate) at the rate of 8.17% per
annum, compounded semi-annually, and holders of Trust Securities will be
required to include deferred interest income in their gross income for United
States federal income tax purposes prior to the receipt of the cash attributable
to such income. See "Description of Junior Subordinated Debentures--Option to
Extend Interest Payment Date" and "Certain Federal Income Tax
Consequences--Interest Income and Original Issue Discount."
The Corporation has and will, through the Guarantee, the guarantee of the
Corporation relating to the Common Securities (the "Common Guarantee"), the
Trust Agreement, the Junior Subordinated Debentures and the Indenture (taken
together), guarantee all of the Trust's obligations under the Trust Securities.
See "Relationship Among the Capital Securities, the Junior Subordinated
Debentures and the Guarantee--Full and Unconditional Guarantee." The Guarantee
and the Common Guarantee will guarantee payments of Distributions and payments
upon liquidation of the Trust or redemption of the Trust Securities, but in each
case only to the extent that the Trust has funds legally available therefor and
has failed to make such payments, as described herein. See "Description of
Guarantee." If the Corporation fails to make a required payment on the Junior
Subordinated Debentures, the Trust will not have sufficient funds to make the
related payments, including Distributions, on the Trust Securities. The
Guarantee and the Common Guarantee will not cover any such payment when the
Trust does not have sufficient funds legally available therefor. In such event,
a holder of Capital Securities may institute a legal proceeding directly against
the Corporation to enforce its rights in respect of such payment. See
"Description of Junior Subordinated Debentures--Enforcement of Certain Rights by
Holders of Capital Securities." The obligations of the Corporation under the
Guarantee, the Common Guarantee and the Junior Subordinated Debentures will be
unsecured and will rank subordinate and junior in right of payment to all Senior
Indebtedness (as defined in "Description of Junior Subordinated Debentures--
Subordination"). See "Risk Factors--Ranking of Subordinated Obligations under
the Guarantee and the Junior Subordinated Debentures; Limitation on Source of
Funds."
The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined herein): (i) in whole, but not in part, on the Stated
Maturity Date upon repayment of the Junior Subordinated Debentures, at a
redemption price equal to the principal amount of, plus accrued and unpaid
interest on, the Junior Subordinated Debentures (the "Maturity Redemption
Price"); (ii) in whole but not in part, at any time prior to May 1, 2008 (the
"Initial Optional Redemption Date"), contemporaneously with the optional
prepayment of the Junior Subordinated Debentures by the Corporation, upon the
occurrence and continuation of a Special Event (as defined herein), at a
redemption price equal to, for each Capital Security, the Special Event
Prepayment Price (as defined herein) for a corresponding $1,000 principal amount
of Junior Subordinated Debentures (the "Special Event Redemption Price"); and
(iii) in whole or in part, on or after the Initial Optional Redemption Date,
contemporaneously with the optional prepayment by the Corporation of all or part
of the Junior Subordinated Debentures, at a redemption price equal to, for each
Capital Security to be redeemed, the Optional Prepayment Price (as defined
herein) for a corresponding $1,000 principal amount of Junior Subordinated
Debentures (the "Optional Redemption Price"). Any of the Maturity Redemption
Price, the Special Event Redemption Price and the Optional Redemption Price may
be referred to herein as the "Redemption Price." See "Description of Capital
Securities--Redemption."
Subject to the Corporation having received any required regulatory approval,
the Junior Subordinated Debentures will be prepayable prior to the Stated
Maturity Date at the option of the Corporation: (i) on or after the Initial
Optional Redemption Date, in whole or in part, at a price (the "Optional
Prepayment Price") equal to 104.085% of the principal amount thereof on the
Initial Optional Redemption Date, declining ratably on each May 1 thereafter to
100% on or after May 1, 2018, plus, in each case, accrued and
3
<PAGE>
unpaid interest thereon to the date of prepayment; or (ii) at any time prior to
the Initial Optional Redemption Date, in whole but not in part, upon the
occurrence and continuation of a Special Event, at a prepayment price (the
"Special Event Prepayment Price") equal to the Make-Whole Amount (as defined
below). The "Make-Whole Amount" shall be equal to the greater of: (a) 100% of
the principal amount of the Junior Subordinated Debentures; or (b) the sum, as
determined by a Quotation Agent (as defined herein), of the present values of
the remaining scheduled payments of principal and interest on the Junior
Subordinated Debentures, discounted to the prepayment date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate (as defined herein) plus, in the case of each of clauses
(a) and (b), accrued and unpaid interest thereon, if any, to the date of
prepayment. Either of the Optional Prepayment Price or the Special Event
Prepayment Price may be referred to herein as the "Prepayment Price." See
"Description of Junior Subordinated Debentures--Optional Prepayment" and
"--Special Event Prepayment."
The Corporation has the right at any time, including, without limitation,
upon the occurrence of a Tax Event (as defined herein), to dissolve the Trust
and, after satisfaction of liabilities of creditors of the Trust as required by
applicable law, to cause a Like Amount of the Junior Subordinated Debentures to
be distributed to the holders of the Trust Securities in liquidation of the
Trust, subject to: (i) the Corporation having received an opinion of counsel to
the effect that such distribution will not be a taxable event to holders of
Capital Securities; and (ii) the receipt of any required regulatory approval.
Unless the Junior Subordinated Debentures are distributed to the holders of the
Trust Securities, in the event of a dissolution of the Trust as described
herein, after satisfaction of liabilities to creditors of the Trust as required
by applicable law, the holders of the Trust Securities generally will be
entitled to receive a Liquidation Amount of $1,000 per Trust Security plus
accumulated and unpaid Distributions thereon to the date of payment. See
"Description of Capital Securities--Liquidation of the Trust and Distribution of
Junior Subordinated Debentures."
The Trust is making the Exchange Offer of the Exchange Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to the two immediately
following sentences, the Corporation and the Trust believe that Exchange Capital
Securities issued pursuant to this Exchange Offer in exchange for Original
Capital Securities may be offered for resale, resold and otherwise transferred
by a holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such Exchange Capital Securities are acquired in
the ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such Exchange Capital Securities. However, any holder of Original Capital
Securities who is an "affiliate" of the Corporation or the Trust within the
meaning of Rule 405 under the Securities Act (an "Affiliate") or who intends to
participate in the Exchange Offer for the purpose of distributing Exchange
Capital Securities, or any broker-dealer who purchased Original Capital
Securities from the Trust to resell pursuant to Rule 144A under the Securities
Act ("Rule 144A") or any other available exemption under the Securities Act, (i)
will not be able to rely on the interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (ii) will not be entitled to tender such Original Capital
Securities in the Exchange Offer, and (iii) must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any sale or other transfer of such Original Capital Securities unless such sale
is made pursuant to an exemption from such requirements. In addition, as
described below, if any broker-dealer holds Original Capital Securities acquired
for its own account as a result of market-making or other trading activities (a
"Participating Broker-Dealer") and
4
<PAGE>
exchanges such Original Capital Securities for Exchange Capital Securities, then
such Participating Broker-Dealer must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of such
Exchange Capital Securities.
Each holder of Original Capital Securities who wishes to exchange Original
Capital Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an Affiliate of the Corporation or the
Trust, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities, and (iv) if
such holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such Exchange Capital Securities. In addition, the Corporation and the Trust
may require such holder, as a condition to such holder's eligibility to
participate in the Exchange Offer, to furnish to the Corporation and the Trust
(or an agent thereof) in writing information as to the number of "beneficial
owners" (within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) on behalf of who such holder holds
Original Capital Securities to be exchanged in the Exchange Offer. Each
Participating Broker-Dealer that receives Exchange Capital Securities for its
own account pursuant to the Exchange Offer will be deemed to have acknowledged
by execution of the Letter of Transmittal or delivery of an Agent's Message (as
defined herein) that it acquired the Original Capital Securities for its own
account as the result of market-making activities or other trading activities
and must agree that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Capital
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation Finance
of the Commission in the interpretive letters referred to above, the Corporation
and the Trust believe that Participating Broker-Dealers may fulfill their
prospectus delivery requirements with respect to the Exchange Capital Securities
received upon exchange of such Original Capital Securities (other than Original
Capital Securities which represent an unsold allotment from the original sale of
the Original Capital Securities) with a prospectus meeting the requirements of
the Securities Act, which may be the prospectus prepared for an exchange offer
so long as it contains a description of the plan of distribution with respect to
the resale of such Exchange Capital Securities. Accordingly, this Prospectus, as
it may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer during the period referred to below in connection
with resales of Exchange Capital Securities received in exchange for Original
Capital Securities where such Original Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Trust have agreed that
this Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of such
Exchange Capital Securities for a period ending 90 days after the Expiration
Date (as defined herein) (subject to extension under certain limited
circumstances described below) or, if earlier, when all such Exchange Capital
Securities have been disposed of by such Participating Broker-Dealer. See "Plan
of Distribution." However, a Participating Broker-Dealer who intends to use this
Prospectus in connection with the resale of Exchange Capital Securities received
in exchange for Original Capital Securities pursuant to the Exchange Offer must
notify the Corporation or the Trust, or cause the Corporation or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent (as
defined herein) at one of the addresses set forth herein under "The Exchange
Offer--Exchange Agent." Any person, including any Participating Broker-Dealer,
who is an Affiliate of the Corporation or the Trust may not rely on such
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. See "The Exchange Offer-- Resales of Exchange Capital Securities."
5
<PAGE>
In that regard, each Participating Broker-Dealer who surrenders Original
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal or delivery of an Agent's Message (as
defined herein), that, upon receipt of notice from the Corporation or the Trust
of the occurrence of any event or the discovery of any fact which makes any
statement contained or incorporated by reference in this Prospectus untrue in
any material respect or which causes this Prospectus to omit to state a material
fact necessary in order to make the statements contained or incorporated by
reference herein, in light of the circumstances under which they were made, not
misleading or of the occurrence of certain other events specified in the
Registration Rights Agreement, such Participating Broker-Dealer will suspend the
sale of Exchange Capital Securities (or the Exchange Guarantee or the Exchange
Junior Subordinated Debentures, as applicable) pursuant to this Prospectus until
the Corporation or the Trust has amended or supplemented this Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to such Participating Broker-Dealer or the Corporation
or the Trust has given notice that the sale of the Exchange Capital Securities
(or the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be. If the Corporation or the Trust
gives such notice to suspend the sale of the Exchange Capital Securities (or the
Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable), it shall extend the 90-day period referred to above during which
Participating Broker-Dealers are entitled to use this Prospectus in connection
with the resale of Exchange Capital Securities by the number of days during the
period from and including the date of the giving of such notice to and including
the date when Participating Broker-Dealers shall have received copies of the
amended or supplemented Prospectus necessary to permit resales of the Exchange
Capital Securities or to and including the date on which the Corporation or the
Trust has given notice that the sale of Exchange Capital Securities (or the
Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Original Capital Securities. The Exchange Capital
Securities will be a new issue of securities for which there currently is no
market. Accordingly, there can be no assurance as to the development or
liquidity of any market for the Exchange Capital Securities. The Corporation and
the Trust currently do not intend to apply for listing of the Exchange Capital
Securities on any securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation System.
Any Original Capital Securities not tendered and accepted in the Exchange
Offer will remain outstanding and will be entitled to all the same rights and
will be subject to the same limitations applicable thereto under the Trust
Agreement (except for those rights which terminate upon consummation of the
Exchange Offer). Following consummation of the Exchange Offer, the holders of
Original Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Corporation nor the Trust
will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act of
the Original Capital Securities held by them. To the extent that Original
Capital Securities are tendered and accepted in the Exchange Offer, a holder's
ability to sell untendered Original Capital Securities could be adversely
affected. See "Risk Factors--Consequences of a Failure to Exchange Original
Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF ORIGINAL CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR ORIGINAL CAPITAL SECURITIES PURSUANT TO THE EXCHANGE
OFFER.
Original Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York Time, on , 1998 (such time on such date being hereinafter
called the "Expiration Date"), unless the Exchange Offer is extended by the
Corporation or the Trust (in which case the term "Expiration Date" shall mean
the latest date and time to which the Exchange Offer is extended). Tenders of
Original Capital Securities
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may be withdrawn at any time on or prior to the Expiration Date. The Exchange
Offer is not conditioned upon any minimum Liquidation Amount of Original Capital
Securities being tendered for exchange. However, the Exchange Offer is subject
to certain events and conditions which may be waived by the Corporation or the
Trust and to the provisions of the Registration Rights Agreement. Original
Capital Securities may be tendered in whole or in part having an aggregate
Liquidation Amount of not less than $100,000 (100 Capital Securities) or any
integral multiple of $1,000 Liquidation Amount (one Capital Security) in excess
thereof. The Corporation has agreed to pay all expenses of the Exchange Offer.
See "The Exchange Offer--Fees and Expenses."
The Original Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed with
the Commission by September 25, 1998 and declared effective by the Commission by
October 23, 1998, the Distribution rate borne by the Original Capital Securities
will increase by 0.25% until the Exchange Offer is consummated. Upon
consummation of the Exchange Offer, holders of Original Capital Securities will
not be entitled to any increase in the Distribution rate thereon or any further
registration rights under the Registration Rights Agreement, except under
limited circumstances. See "Description of Original Securities."
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. No
dealer-manager is being used in connection with this Exchange Offer. See "Use of
Proceeds" and "Plan of Distribution."
THE EXCHANGE CAPITAL SECURITIES WILL BE ISSUED AND THE CAPITAL SECURITIES
MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000 (100 CAPITAL SECURITIES) AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT
OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED, TO THE
RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("CODE") (EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY") AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR
ITS PURCHASE AND HOLDING OF CAPITAL SECURITIES IS NOT PROHIBITED BY SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL
BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER:
(A) IT IS NOT A PLAN SUBJECT TO ERISA; OR (B) THE ACQUISITION AND HOLDING OF
CAPITAL SECURITIES BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE OR IS EXEMPT FROM ANY SUCH PROHIBITION.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIEF UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
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AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 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. Copies of such material may also be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. Information on the operation
of the Public Reference Section may be obtained by calling the SEC at
1-800-SEC-0330. If available, such information also may be accessed through the
Commission's electronic data gathering, analysis and retrieval system ("EDGAR")
via electronic means, including the Commission's home page on the Internet
(http://www.sec.gov). The Corporation's common stock is traded on the Nasdaq
National Market. Such reports, proxy statements and other information concerning
the Corporation also may be inspected at the offices of the National Association
of Securities Dealers, Inc., 1735 K Street, N.W., Washington D.C. 20006.
No separate financial statements of the Trust have been included herein. The
Corporation and the Trust do not consider that such financial statements would
be material to holders of the Capital Securities, because the Trust is a
newly-formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Junior Subordinated Debentures, issuing
the Trust Securities and engaging in incidental activities. See "Reliance
Capital Trust I," "Description of Capital Securities," "Description of Junior
Subordinated Debentures" and "Description of Guarantee." In addition, the
Corporation does not expect that the Trust will file reports, proxy statements
and other information under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Corporation and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Corporation, the
Trust and the Exchange Securities. Any statements contained herein concerning
the provisions of any document are not necessarily complete, and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
1. The Corporation's Annual Report on Form 10-K for the year ended June 30,
1997.
2. The Corporation's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1997, December 31, 1997 and March 31, 1998.
3. The Corporation's Current Report on Form 8-K filed on October 21, 1997.
4. The Corporation's Current Report on Form 8-K filed on January 20, 1998.
5. The Corporation's Current Report on Form 8-K filed on February 19, 1998.
6. The Corporation's Current Report on Form 8-K filed on March 24, 1998.
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7. The Corporation's Current Report on Form 8-K filed on April 16, 1998.
All documents subsequently filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of the offering of the Capital Securities offered hereby shall
be deemed to be incorporated by reference into this Prospectus and to be a part
of this Prospectus from the date of filing of such document. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document.
The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein (other
than exhibits unless such exhibits are specifically incorporated by reference in
such documents). Requests for such documents should be directed to: Paul Hagan,
Chief Financial Officer, Reliance Bancorp, Inc., 585 Stewart Avenue, Garden
City, New York 11530. Mr. Hagan's telephone number is 516-222-9300.
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SUMMARY
THE FOLLOWING SUMMARY SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED
IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION, INCLUDING "RISK FACTORS" AND
THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO, APPEARING ELSEWHERE IN,
OR INCORPORATED BY REFERENCE IN, THIS PROSPECTUS.
RELIANCE BANCORP, INC.
The Corporation is a Delaware corporation headquartered in Garden City, New
York. The Corporation became the sole stockholder of Reliance Federal Savings
Bank (the "Bank"), a federally chartered savings bank, on March 31, 1994 in
connection with the Bank's conversion from mutual to stock form. The Corporation
is a unitary savings and loan holding company which conducts its operations
primarily through the Bank. The Bank is a community-oriented savings
institution, which operates 30 full service branch offices in Nassau and Suffolk
Counties and the Borough of Queens. In addition to the branch facilities, the
Bank also operates five check cashing facilities in Manhattan. The Bank,
however, considers its primary market area to be the greater New York City
metropolitan area. As of June 30, 1998, the Corporation, on a consolidated
basis, had total assets of $2.5 billion, total liabilities of $2.3 billion,
which included $1.6 billion of total deposits, and total stockholders' equity of
$194.9 million.
RELIANCE CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law upon the
filing of a certificate of trust with the Delaware Secretary of State. The
Trust's business and affairs are conducted by the Issuer Trustees: the Property
Trustee, the Delaware Trustee and the three individual Administrative Trustees,
who are officers of the Corporation. The Trust exists for the exclusive purposes
of: (i) issuing and selling the Trust Securities; (ii) using the proceeds from
the sale of the Trust Securities to acquire the Junior Subordinated Debentures
issued by the Corporation; and (iii) engaging in only those other activities
necessary, advisable or incidental thereto, including the Exchange Offer.
Accordingly, the Junior Subordinated Debentures will be the sole assets of the
Trust, and payments under the Junior Subordinated Debentures will be the sole
revenue of the Trust. All of the Common Securities will be owned by the
Corporation.
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THE EXCHANGE OFFER
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The Exchange Offer........... Up to $50,000,000 aggregate Liquidation Amount of Exchange
Capital Securities are being offered in exchange for a like
aggregate Liquidation Amount of Original Capital Securities.
Original Capital Securities may be tendered for exchange in
whole or in part in a Liquidation Amount of $100,000 (100
Capital Securities) or any integral multiple of $1,000 (one
Capital Security) in excess thereof. The Corporation and the
Trust are making the Exchange Offer in order to satisfy
their obligations under the Registration Rights Agreement
relating to the Original Capital Securities. For a
description of the procedures for tendering Original Capital
Securities, see "The Exchange Offer--Procedures for
Tendering Original Capital Securities."
Expiration Date.............. 5:00 p.m., New York Time, on , 1998, unless the
Exchange Offer is extended by the Corporation or the Trust
(in which case the Expiration Date will be the latest date
and time to which the Exchange Offer is extended). See "The
Exchange Offer--Terms of the Exchange Offer."
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to certain conditions, which
may be waived by the Corporation and the Trust in their sole
discretion. The Exchange Offer is not conditioned upon any
minimum Liquidation Amount of Original Capital Securities
being tendered. See "The Exchange Offer--Conditions to the
Exchange Offer."
Terms of the Exchange The Corporation and the Trust reserve the right in their
Offer...................... sole and absolute discretion, subject to applicable law, at
any time and from time to time, (i) to delay the acceptance
of the Original Capital Securities for exchange, (ii) to
terminate the Exchange Offer if certain specified conditions
have not been satisfied, (iii) to extend the Expiration Date
of the Exchange Offer and retain all Original Capital
Securities tendered pursuant to the Exchange Offer, subject,
however, to the right of holders of Original Capital
Securities to withdraw their tendered Original Capital
Securities or (iv) to waive any condition or otherwise amend
the terms of the Exchange Offer in any respect. See "The
Exchange Offer--Terms of the Exchange Offer."
Withdrawal Rights............ Tenders of Original Capital Securities may be withdrawn at
any time on or prior to the Expiration Date by delivering a
written notice of such withdrawal to the Exchange Agent (as
defined herein) with certain procedures set forth below
under "The Exchange Offer-- Withdrawal Rights."
Procedures for Tendering
Original Capital
Securities................. Certain brokers, dealers, commercial banks, trust companies
and other nominees who hold Original Capital Securities
through The Depository Trust Company ("DTC") must effect
tenders by book-entry transfer through DTC's Automated
Tender Offer Program ("ATOP"). Beneficial owners of Original
Capital Securities registered
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in the name of a broker, dealer, commercial bank, trust
company or other nominee are urged to contact such nominee
promptly if they wish to tender Original Capital Securities
pursuant to the Exchange Offer. Tendering holders of
Original Capital Securities that do not use ATOP must
complete and sign a Letter of Transmittal in accordance with
the instructions contained therein and forward the same by
mail, facsimile or hand delivery, together with any other
required documents, to the Exchange Agent (as defined
herein), either with the certificates of the Original
Capital Securities to be tendered or in compliance with the
specified procedures for guaranteed delivery of Original
Capital Securities. Tendering holders of Original Capital
Securities that use ATOP will, by so doing, acknowledge that
they are bound by the terms of the Letter of Transmittal.
See "The Exchange Offer--Procedures for Tendering Original
Capital Securities."
Letters of Transmittal and certificates representing
Original Capital Securities should not be sent to the
Corporation or the Trust. Such documents should only be sent
to the Exchange Agent (as defined herein).
Exchange Agent............... The exchange agent with respect to the Exchange Offer is The
Bank of New York (the "Exchange Agent"). The addresses, and
telephone and facsimile numbers, of the Exchange Agent are
set forth in "The Exchange Offer--Exchange Agent") and in
the Letter of Transmittal.
Resales of Exchange Capital
Securities................. The Corporation and the Trust are making the Exchange Offer
in reliance on the position of the staff of the Division of
Corporation Finance of the Commission as set forth in
certain interpretive letters addressed to third parties in
other transactions. However, neither the Corporation nor the
Trust has sought its own interpretive letter and there can
be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has
in such interpretive letters to third parties. Based on
these interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to the
two immediately following sentences, the Corporation and the
Trust believe that Exchange Capital Securities issued
pursuant to this Exchange Offer in exchange for Original
Capital Securities may be offered for resale, resold and
otherwise transferred by a holder thereof (other than a
holder who is broker-dealer) without further compliance with
the registration and prospectus delivery requirements of the
Securities Act, provided that such Exchange Capital
Securities are acquired in the ordinary course of such
holder's business and that such holder is not participating,
and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities.
However, any holder of Original Capital Securities who is an
Affiliate of the Corporation or the Trust or who intends to
participate in the Exchange Offer for the purpose of
distributing the Exchange Capital Securities, or any
broker-dealer who purchased the Original Capital Securities
from the Trust to resell pursuant to Rule
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144A or any other available exemption under the Securities
Act, (i) will not be able to rely on the interpretations of
the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive
letters, (ii) will not be permitted or entitled to tender
such Original Capital Securities in the Exchange Offer and
(iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection
with any sale or other transfer of such Original Capital
Securities unless such sale is made pursuant to an exemption
from such requirements. In addition, as described below, if
any broker-dealer holds Original Capital Securities acquired
for its own account as a result of market-making or other
trading activities and exchanges such Original Capital
Securities for Exchange Capital Securities, then such
broker-dealer must deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resales of such Exchange Capital Securities.
Each holder of Original Capital Securities who wishes to
exchange Original Capital Securities for Exchange Capital
Securities in the Exchange Offer will be required to
represent in the Letter of Transmittal or by transmission of
an Agent's Message (as defined herein) that (i) it is not an
"affiliate" of the Corporation or the Trust, (ii) any
Exchange Capital Securities to be received by it are being
acquired in the ordinary course of its business, (iii) it
has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities and (iv)
if such holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a distribution
(within the meaning of the Securities Act) of such Exchange
Capital Securities. Each Participating Broker-Dealer that
receives Exchange Capital Securities for its own account
pursuant to the Exchange Offer will be deemed to have
acknowledged by execution of the Letter of Transmittal or
delivery of an Agent's Message (as defined herein) that it
acquired the Original Capital Securities for its own account
as the result of market-making activities or other trading
activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection
with any resale of such Exchange Capital Securities. The
Letter of Transmittal states that, by so acknowledging and
by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. Based on the
position taken by the staff of the Division of Corporation
Finance of the Commission in the interpretive letters
referred to above, the Corporation and the Trust believe
that Participating Broker-Dealers who acquired Original
Capital Securities for their own accounts as a result of
market-making activities or other trading activities may
fulfill their prospectus delivery requirements with respect
to the Exchange Capital Securities received upon exchange of
such Original Capital Securities (other than Original
Capital Securities which represent an unsold allotment from
the original sale of the Original Capital Securities) with a
prospectus
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meeting the requirements of the Securities Act, which may be
the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with
respect to the resale of such Exchange Capital Securities.
Accordingly, this Prospectus, as it may be amended or
supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with resales of
Exchange Capital Securities received in exchange for
Original Capital Securities where such Original Capital
Securities were acquired by such Participating Broker-Dealer
for its own account as a result of market-making or other
trading activities.
Subject to certain provisions set forth in the Registration
Rights Agreement and to the limitations described below
under "The Exchange Offer--Resales of Exchange Capital
Securities," the Corporation and the Trust have agreed that
this Prospectus, as it may be amended or supplemented from
time to time, may be used by a Participating Broker-Dealer
in connection with resales of such Exchange Capital
Securities for a period ending 90 days after the Expiration
date (subject to extension under certain limited
circumstances) or, if earlier, when all such Exchange
Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." Any
person, including any Participating Broker-Dealer, who is an
Affiliate of the Corporation or the Trust may not rely on
such interpretive letters and must comply with the
registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.
See "The Exchange Offer--Resales of Exchange Capital
Securities."
Use of Proceeds.............. Neither the Corporation nor the Trust will receive any cash
proceeds from the issuance of the Exchange Capital
Securities offered hereby. See "Use of Proceeds."
Certain Federal Income Tax
Considerations; ERISA
Considerations............. Holders of Original Capital Securities should review the
information set forth under "Certain Federal Income Tax
Considerations" and "ERISA Considerations" prior to
tendering Original Capital Securities in the Exchange Offer.
THE EXCHANGE CAPITAL SECURITIES
Securities Offered........... Up to $50,000,000 aggregate Liquidation Amount of the
Trust's Exchange Capital Securities which have been
registered under the Securities Act (Liquidation Amount
$1,000 per Exchange Capital Security). The Exchange Capital
Securities will be issued and the Original Capital
Securities were issued under the Trust Agreement. The
Exchange Capital Securities and any Original Capital
Securities which remain outstanding after consummation of
the Exchange Offer will vote together as a single class for
purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have
taken certain actions or exercised certain rights under the
Trust Agreement. See "Description of Capital
Securities--Voting Rights; Amendment of the Trust
Agreement." The
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terms of the Exchange Capital Securities are identical in
all material respects to the terms of the Original Capital
Securities, except that the Exchange Capital Securities have
been registered under the Securities Act and therefore will
not be subject to certain restrictions on transfer under
federal and state securities laws and will not provide for
any increase in the Distribution rate thereon. See "The
Exchange Offer."
Distribution Dates........... May 1 and November 1 of each year.
Extension Periods............ So long as no Debenture Event of Default has occurred and is
continuing, Distributions on Capital Securities will be
deferred for the duration of any Extension Period elected by
the Corporation with respect to the payment of interest on
the Junior Subordinated Debentures. No Extension Period will
exceed 10 consecutive semi-annual periods, end on a date
other than an Interest Payment Date or extend beyond the
Stated Maturity Date. During an Extension Period, the
holders of the Capital Securities will be required to
include deferred interest income in their gross income for
United States federal income tax purposes in advance of any
corresponding cash distribution. See "Description of Junior
Subordinated Debentures--Option to Extend Interest Payment
Date" and "Certain Federal Income Tax Consequences--Interest
Income and Original Issue Discount."
Ranking...................... The Exchange Capital Securities will rank PARI PASSU, and
payments thereon will be made PRO RATA, with the Original
Capital Securities and the Common Securities, except as
described under "Description of Capital
Securities--Subordination of Common Securities." The
Exchange Junior Subordinated Debentures will rank PARI PASSU
with the Original Junior Subordinated Debentures and all
other junior subordinated debentures, if any, issued by the
Corporation (the "Other Debentures"), which are issued and
sold (if at all) to other trusts established by the
Corporation (if any), in each case similar to the Trust
("Other Trusts"), and will constitute unsecured obligations
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 Indenture. See
"Description of Junior Subordinated Debentures." The
Exchange Guarantee will rank PARI PASSU with the Original
Guarantee and all other guarantees, if any, issued by the
Corporation with respect to capital securities, if any,
issued by Other Trusts ("Other Guarantees") and will
constitute an unsecured obligation of the Corporation and
will rank subordinate and junior in right of payment to all
Senior Indebtedness, to the extent and in the manner set
forth in the Guarantee Agreement. See "Description of
Exchange Guarantee." In addition, because the Corporation is
a savings and loan holding company, the Exchange Junior
Subordinated Debentures and the Exchange Guarantee will be
effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, including the
Banks' deposit liabilities. See "Description of Junior
Subordinated Debentures--Subordination."
Redemption................... The Trust Securities will be subject to mandatory redemption
in a Like Amount: (i) in whole but not in part, on the
Stated Maturity Date
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upon repayment of the Junior Subordinated Debentures; (ii)
in whole but not in part, at any time prior to May 1, 2008
contemporaneously with the optional prepayment of the Junior
Subordinated Debentures by the Corporation upon the
occurrence and continuation of a Special Event; and (iii) in
whole or in part, on or after May 1, 2008, contemporaneously
with the optional prepayment by the Corporation of all or
part of the Junior Subordinated Debentures, in each case at
the applicable Redemption Price. See "Description of Capital
Securities--Redemption" and "Description of Junior
Subordinated Debentures--Special Event Prepayment."
Transfer Restrictions........ The Exchange Capital Securities will be issued, and may be
transferred, only in blocks having a Liquidation Amount of
not less than $100,000 (100 Capital Securities) and
multiples of $1,000 in excess thereof. See "Description of
Capital Securities--Restrictions on Transfer." Any such
transfer of Exchange Capital Securities in a block having a
Liquidation Amount of less than $100,000 shall be deemed to
be void and of no legal effect whatsoever.
Absence of Market for the
Capital Securities......... The Exchange Capital Securities will be a new issue of
securities for which there currently is no market. Although
the Initial Purchasers have informed the Trust and the
Corporation that they currently intend to make a market in
the Exchange Capital Securities, the Initial Purchasers are
not obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, there
can be no assurance as to the development or liquidity of
any market for the Exchange Capital Securities. The Trust
and the Corporation do not intend to apply for listing of
the Exchange Capital Securities on any securities exchange
or for quotation through the Nasdaq Stock Market. See "Plan
of Distribution."
ERISA Considerations......... Prospective purchasers must carefully consider the
restrictions on purchases set forth under "ERISA
Considerations."
Risk Factors................. For a discussion of considerations relevant to an investment
in the Capital Securities which should be carefully
considered by prospective investors, see "Risk Factors."
</TABLE>
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RISK FACTORS
PROSPECTIVE PURCHASERS OF THE EXCHANGE CAPITAL SECURITIES SHOULD CAREFULLY
REVIEW THE INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS AND SHOULD
PARTICULARLY CONSIDER THE FOLLOWING MATTERS. INFORMATION CONTAINED IN THIS
PROSPECTUS CONTAINS "FORWARD-LOOKING STATEMENTS" WHICH CAN BE IDENTIFIED BY THE
USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVES," "EXPECTS," "MAY," "WILL,"
"SHOULD," "PROJECTED," "CONTEMPLATES" OR "ANTICIPATES" OR THE NEGATIVE THEREOF
OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. NO ASSURANCE CAN BE GIVEN
THAT THE FUTURE RESULTS COVERED BY THE FORWARD-LOOKING STATEMENTS WILL BE
ACHIEVED. THE FOLLOWING MATTERS CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING
IMPORTANT FACTORS WITH RESPECT TO SUCH FORWARD-LOOKING STATEMENTS, INCLUDING
CERTAIN RISKS AND UNCERTAINTIES, THAT COULD CAUSE ACTUAL RESULTS TO VARY
MATERIALLY FROM THE FUTURE RESULTS COVERED IN SUCH FORWARD-LOOKING STATEMENTS.
OTHER FACTORS, SUCH AS THE GENERAL STATE OF THE ECONOMY, COULD ALSO CAUSE ACTUAL
RESULTS TO VARY MATERIALLY FROM THE FUTURE RESULTS COVERED IN SUCH FORWARD-
LOOKING STATEMENTS.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES; LIMITATIONS ON SOURCE OF FUNDS
The obligations of the Corporation under the Guarantee issued by it for the
benefit of the holders of Capital Securities, as well as under the Junior
Subordinated Debentures, 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 Guarantee and the Indenture, respectively. No payment may be
made of the principal of, or premium, if any, or interest on the Junior
Subordinated Debentures, or in respect of any redemption, retirement, purchase
or other acquisition of any of the Junior Subordinated Debentures, at any time
when: (i) there shall have occurred and be continuing a default in any payment
in respect of any Senior Indebtedness, or there has been an acceleration of the
maturity thereof because of a default; or (ii) in the event of the acceleration
of the maturity of the Junior Subordinated Debentures, until payment has been
made on all Senior Indebtedness. At June 30, 1998, the Corporation had no Senior
Indebtedness outstanding.
Since the Corporation is a savings and loan holding company, the right of
the Corporation to participate in any distribution of assets of any subsidiary
upon such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly from such
distribution) is subject to the prior claims of creditors of that subsidiary,
including depositors, in the case of the Bank, except to the extent that the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Junior Subordinated Debentures effectively will be subordinated
to all existing and future liabilities of the Corporation's subsidiaries. At
June 30, 1998, the subsidiaries of the Corporation had total liabilities,
excluding liabilities owed to the Corporation, of $2.2 billion, which amount
includes deposit liabilities of $1.6 billion. Holders of Junior Subordinated
Debentures should look only to the assets of the Corporation for payments on the
Junior Subordinated Debentures. The 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 Junior Subordinated
Debentures. None of the Indenture, the Guarantee or the Trust Agreement places
any limitation on the amount of secured or unsecured debt, including Senior
Indebtedness, that may be incurred by the Corporation or any of its
subsidiaries. See "Description of Guarantee--Status of the Exchange Guarantee"
and "Description of Junior Subordinated Debentures--General" and
"--Subordination."
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Junior Subordinated
Debentures as and when required.
The Corporation is a savings and loan holding company regulated by the
Office of Thrift Supervision (the "OTS"), and almost all of the operating assets
of the Corporation are owned by the Corporation's subsidiaries. The Corporation
relies primarily on dividends from the Bank to meet its obligations for payment
of principal and interest on its outstanding debt obligations and corporate
expenses. There are
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regulatory limitations (discussed in more detail below) on the payment of
dividends directly or indirectly to the Corporation from the Bank. In addition
to restrictions on the payment of dividends, the Bank is subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, the Corporation and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from the Bank, unless the
loans are secured by various types of collateral. 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. As of June
30, 1998, this limitation was approximately $15.4 million.
OTS regulations impose limitations upon all capital distributions by a
savings institution, such as the payment of cash dividends by the Bank to the
Corporation. Such regulations establish three tiers of institutions, which are
based primarily on an institution's capital level. An institution that exceeds
all fully phased-in regulatory capital requirements before and after a proposed
capital distribution ("Tier 1 Institution") and has not been advised by the OTS
that it is in need of more than normal supervision, could, after prior notice
to, but without the approval of the OTS, make capital distributions during a
calendar year equal to the greater of: (i) 100% of its net earnings to date
during the calendar year plus the amount that would reduce by one-half its
"surplus capital ratio" (the excess capital over its fully phased-in capital
requirements) at the beginning of the calendar year; or (ii) 75% of its net
earnings for the previous four quarters. Any additional capital distributions
would require prior OTS approval. In the event the Bank's capital fell below its
capital requirements or the OTS notified it that it was in need of more than
normal supervision, the Bank's ability to make capital distributions could be
restricted. In addition, the OTS could prohibit a proposed capital distribution
by any institution, which would otherwise be permitted by the regulation, if the
OTS determines that such distribution would constitute an unsafe or unsound
practice. During the fiscal year ended June 30, 1998, the Bank paid $14.0
million in dividends to the Corporation, which reflected the total amount of
dividends the Bank was permitted to pay as of June 30, 1998 under existing
supervisory practices. The OTS has proposed amendments to its capital
distribution regulations. If adopted as proposed, a savings association
subsidiary of a savings and loan holding company, such as the Bank, will
continue to have to file a notice with the OTS with respect to each capital
distribution that it proposes to make, unless the specific capital distribution
requires an application. Under the proposed amendments, an application would be
required if the total amount of all capital distributions (including the
proposed capital distribution) for the applicable calendar year exceeds net
income for that year to date plus the retained net income for the preceding two
years. If this proposed rule had been in effect at June 30, 1998, the Bank could
have paid dividends of $20.1 million without obtaining prior regulatory
approval. 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.
Under the Federal Deposit Insurance Act ("FDIA"), insured depository
institutions such as the Bank are prohibited from making capital distributions,
including the payment of dividends, if, after making any 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.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES
So long as no Debenture Event of Default has occurred and is continuing, the
Corporation will have the right under the Indenture to defer payments of
interest on the Junior Subordinated Debentures at any time and from time to time
for a period not exceeding 10 consecutive semi-annual periods with respect to
each Extension Period, provided that an Extension Period must end on an Interest
Payment Date and may
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not extend beyond the Stated Maturity Date. As a consequence of any such
deferral, semi-annual Distributions on the Trust Securities by the Trust will be
deferred (and the amount of Distributions to which holders of the Trust
Securities are entitled will accumulate additional Distributions thereon at the
rate of 8.17% per annum, compounded semi-annually, but not exceeding the
interest rate then accruing on the Junior Subordinated Debentures) from the
relevant payment date for such Distributions during any such Extension Period.
During the pendency of any Extension Period, the Corporation generally will be
prohibited from declaring or paying dividends on the Corporation's capital
stock. See "Description of Capital Securities--Distributions."
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
ycause such Extension Period to exceed 10 consecutive semi-annual periods, end
on a date other than an Interest Payment Date or to extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the payment
of all interest then accrued and unpaid on the Junior Subordinated Debentures
(together with interest thereon at the annual rate of 8.17%, compounded
semi-annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period, subject to the above requirements. There
is no limitation on the number of times that the Corporation may elect to begin
an Extension Period. See "Description of Capital Securities--Distributions" and
"Description of Junior Subordinated Debentures-- Option to Extend Interest
Payment Date."
The Corporation has no current plan to exercise its right to defer payments
of interest on the Junior Subordinated Debentures. However, should the
Corporation exercise its right to defer payments of interest on the Junior
Subordinated Debentures, each holder of Trust Securities will be required to
accrue income (as original issue discount ("OID")) in respect of the deferred
stated interest allocable to its Trust Securities for United States federal
income tax purposes, which will be allocated but not distributed to holders of
Trust Securities. As a result, each holder of Capital Securities will recognize
income for United States federal income tax purposes in advance of the receipt
of cash and will not receive the cash related to such income from the Trust if
the holder disposes of the Capital Securities prior to the record date for the
payment of deferred Distributions thereafter. See "Certain Federal Income Tax
Consequences--Interest Income and Original Issue Discount" and "--Sales of
Capital Securities."
If the Corporation elects to exercise its right to defer payments of
interest on the Junior Subordinated Debentures in the future, the market price
of the Capital Securities is likely to be affected. A holder that disposes of
its Capital Securities during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its Capital
Securities. In addition, the mere existence of the Corporation's right to defer
payments of interest on the Junior Subordinated Debentures may cause the market
price of the Capital Securities to be more volatile than the market prices of
other securities and that are not subject to such deferrals.
SPECIAL EVENT REDEMPTION
Upon the occurrence and continuation of a Special Event, including a Tax
Event or a Regulatory Capital Event (in each case as defined under "Description
of Junior Subordinated Debentures--Special Event Prepayment"), prior to the
Initial Optional Redemption Date, the Corporation will have the right to prepay
the Junior Subordinated Debentures, in whole but not in part, at the Special
Event Prepayment Price within 60 days following the occurrence of such Special
Event and therefore cause a mandatory redemption of the Trust Securities at the
Special Event Redemption Price. The exercise of such right is subject to the
Corporation having received any required regulatory approval. See "Description
of Capital Securities--Redemption."
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LIQUIDATION DISTRIBUTION OF JUNIOR 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 Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Trust. Such right is
subject to: (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to the holders of
Capital Securities; and (ii) receipt of any required regulatory approval. Under
current United States federal income tax law, a distribution of Junior
Subordinated Debentures upon the dissolution of the Trust would not be a taxable
event to holders of the Capital Securities. Upon the occurrence of a Special
Event, a dissolution of the Trust in which holders of the Capital Securities
receive cash would be a taxable event to such holders. See "Certain Federal
Income Tax Considerations--Receipt of Junior Subordinated Debentures or Cash
Upon Liquidation of the Trust."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for Capital Securities or
the Junior Subordinated Debentures that may be distributed in exchange for
Capital Securities if a dissolution of the Trust were to occur. Accordingly, the
Capital Securities or the Junior Subordinated Debentures may trade at a discount
from the price that the investor paid to purchase the Capital Securities offered
hereby. Because holders of Capital Securities may receive Junior Subordinated
Debentures in liquidation of the Trust and because Distributions are otherwise
limited to payments on the Junior Subordinated Debentures, prospective
purchasers of Capital Securities are also making an investment decision with
regard to the Junior Subordinated Debentures and should carefully review all the
information regarding the Junior Subordinated Debentures contained herein. See
"Description of Junior Subordinated Debentures."
RIGHTS UNDER THE GUARANTEE
The Guarantee will guarantee to the holders of the Capital Securities the
following payments, to the extent not paid by or on behalf of the Trust: (i) any
accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time; (ii) the applicable Redemption Price with respect to the
Capital Securities called for redemption, to the extent that the Trust has funds
on hand legally available therefor at such time; and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of the Trust (unless the
Junior Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment, to the extent that
the Trust has funds on hand legally available therefor at such time, and (b) the
amount of assets of the Trust remaining available for distribution to holders of
the Capital Securities at such time, after the satisfaction of liabilities to
creditors of the Trust as provided by applicable law.
The holders of a majority in Liquidation Amount of the Capital Securities
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee under the Guarantee. Any holder of the Capital Securities may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Guarantee without first instituting a legal proceeding against
the Trust, the Guarantee Trustee or any other person or entity. If the
Corporation defaults on its obligation to pay amounts payable under the Junior
Subordinated Debentures, the Trust will not have sufficient funds for the
payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital Securities
will not be able to rely upon the Guarantee for payment of such amounts.
Instead, in the event a Debenture Event of Default shall have occurred and be
continuing and such event is attributable to the failure of the Corporation to
pay the principal of (or premium, if any) or interest (including Additional Sums
and Compounded Interest, if any), on the Junior Subordinated Debentures on the
payment date on which such payment is due and payable, then a holder of Capital
Securities may institute a legal proceeding directly
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<PAGE>
against the Corporation for enforcement of payment to such holder of the
principal of (or premium, if any) or interest (including Additional Sums and
Compounded Interest, if any), on such Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Capital Securities of
such holder (a "Direct Action"). Notwithstanding any payments made to a holder
of Capital Securities by the Corporation in connection with a Direct Action, the
Corporation shall remain obligated to pay the principal of (and premium, if any)
and interest (including Additional Sums and Compounded Interest, if any) or, on
the Junior Subordinated Debentures, and the Corporation shall be subrogated to
the rights of the holder of such Capital Securities with respect to payments on
the Capital Securities to the extent of any payments made by the Corporation to
such holder in any Direct Action. Except as described herein, holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Junior Subordinated Debentures or to assert directly any
other rights in respect of the Junior Subordinated Debentures. See "Description
of Junior Subordinated Debentures--Enforcement of Certain Rights by Holders of
Capital Securities," "--Debenture Events of Default" and "Description of
Guarantee." The Trust Agreement will provide that each holder of Capital
Securities by acceptance thereof agrees to the provisions of the Indenture. The
Bank of New York will act as Guarantee Trustee and will hold the Guarantee for
the benefit of the holders of the Capital Securities. The Bank of New York will
also act as Property Trustee and as Debenture Trustee under the Indenture. The
Bank of New York (Delaware) will act as Delaware Trustee under the Trust
Agreement.
LIMITED VOTING RIGHTS
Holders of Capital Securities generally will have limited voting rights
relating only to the modification of the Capital Securities and the exercise of
the Trust's rights as holder of Junior Subordinated Debentures. Holders of
Capital Securities will not be entitled to vote to appoint, remove or replace,
or to increase or decrease the number of, the Issuer Trustees, which voting
rights are vested exclusively in the holder of the Common Securities, except
upon the occurrence of certain events described herein. The Property Trustee,
the Administrative Trustees and the Corporation may amend the Trust Agreement
without the consent of holders of Capital Securities to ensure that the Trust
will be classified for United States federal income tax purposes as a grantor
trust, even if such action adversely affects the interests of such holders.
Holders of Capital Securities will have no voting rights with respect to any
matters submitted to a vote of the Corporation's stockholders. See "Description
of Capital Securities--Voting Rights; Amendment of the Trust Agreement" and
"--Removal of Issuer Trustees."
TRADING CHARACTERISTICS OF THE CAPITAL SECURITIES
The Capital Securities may trade at a price that does not fully reflect the
value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder who uses the accrual method of accounting for
tax purposes (and a cash method holder, if the Junior Subordinated Debentures
are deemed to have been issued with OID) and who disposes of its Capital
Securities between record dates for payments of distributions thereon will be
required to include accrued but unpaid interest on the Junior Subordinated
Debentures through the date of disposition in income as ordinary income (i.e.,
interest or, possibly, OID), and to add such amount to its adjusted tax basis in
its share of the underlying Junior Subordinated Debentures deemed disposed of.
To the extent the selling price is less than the holder's adjusted tax basis
(which will include all accrued but unpaid interest), a holder will recognize a
capital loss. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax purposes.
See "Certain Federal Income Tax Considerations--Interest Income and Original
Issue Discount" and "--Sales of Capital Securities."
ABSENCE OF RATINGS AND PUBLIC MARKET
The Capital Securities have not been rated by any rating agency. There is no
existing market for the Capital Securities, and there can be no assurance as to
the liquidity of any markets that may develop for
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the Capital Securities, the ability of the holders to sell their Capital
Securities, or at what price holders of the Capital Securities, will be able to
sell their Capital Securities. Future trading prices of the Capital Securities
will depend on many factors including, among other things, prevailing interest
rates, the Corporation's operating results and the market for similar
securities.
The Original Capital Securities were issued to, and the Corporation believes
such securities are currently owned by, a relatively small number of beneficial
owners. The Original Capital Securities have not been registered under the
Securities Act and will continue to be subject to restrictions on resale if they
are not exchanged for the Exchange Capital Securities. Although the Exchange
Capital Securities may be resold or otherwise transferred by the holders (who
are not affiliates of the Corporation or the Trust) without compliance with the
registration requirements under the Securities Act, they constitute a new issue
of securities with no established trading market. In addition, Capital
Securities may be transferred by the holders thereof only in blocks having a
Liquidation Amount of not less than $100,000 (100 Capital Securities). The
Initial Purchasers have informed the Corporation and the Trust that they intend
to make a market in the Exchange Capital Securities. However, the Initial
Purchasers are not obligated to do so and any such market-making activity may be
terminated at any time without notice to the holders of the Exchange Capital
Securities. In addition, such market-making activity will be subject to the
limits of the Securities Act and may be limited during the pendency of the
Exchange Offer. Accordingly, no assurance can be given that an active public or
other market will develop for the Exchange Capital Securities or the Original
Capital Securities, or as to the liquidity of or the trading market for the
Exchange Capital Securities or the Original Capital Securities. If an active
public market does not develop, the market price and liquidity of the Exchange
Capital Securities may be adversely affected.
If a public trading market develops for the Exchange Capital Securities,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, the Corporation's operating results, and the
market for similar securities. Depending on these and other factors, the
Exchange Capital Securities may trade at a discount.
Notwithstanding the registration of the Exchange Capital Securities offered
in the Exchange Offer, holders who are "affiliates" (as defined under Rule 405
of the Securities Act) of the Corporation or the Trust may publicly offer for
sale or resell the Exchange Capital Securities only in compliance with the
provisions of the Securities Act, including Rule 144 thereunder.
Each broker-dealer that receives Exchange Capital Securities for its own
account in exchange for Original Capital Securities, where such Original Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
See "Plan of Distribution."
CONSEQUENCES OF A FAILURE TO EXCHANGE ORIGINAL CAPITAL SECURITIES
The Original Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions.
Original Capital Securities which remain outstanding after consummation of the
Exchange Offer will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the Exchange Offer, holders of
Original Capital Securities which remain outstanding will not be entitled to any
rights to have such Original Capital Securities registered under the Securities
Act or to any similar rights under the Registration Rights Agreement. The
Corporation and the Trust do not intend to register under the Securities Act any
Original Capital Securities which remain outstanding after consummation of the
Exchange Offer.
Although the Original Capital Securities have been designated for trading in
the Private Offerings, Resale and Trading through Automated Linkages ("PORTAL")
market, to the extent that Original Capital
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Securities are tendered and accepted in connection with the Exchange Offer, any
trading market for Original Capital Securities which remain outstanding after
the Exchange Offer could be adversely affected.
The Exchange Capital Securities and any Original Capital Securities which
remain outstanding after consummation of the Exchange Offer will vote together
as a single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Trust Agreement. See "Description of
Exchange Securities" and "Description of Capital Securities--Voting Rights;
Amendment of the Trust Agreement."
The Original Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
September 25, 1998 and declared effective by October 23, 1998, the Distribution
rate borne by the Original Capital Securities commencing on April 17, 1998 will
increase by 0.25% per annum until the Exchange Offer is consummated. Upon
consummation of the Exchange Offer, holders of Original Capital Securities will
not be entitled to any increase in the Distribution rate thereon or any further
registration rights under the Registration Rights Agreement. The Exchange
Capital Securities will not be entitled to any such increase in the Distribution
rate thereon. See "Description of Original Capital Securities."
EXCHANGE OFFER PROCEDURES
Subject to the conditions set forth under "The Exchange Offer--Conditions to
the Exchange Offer," the issuance of the Exchange Capital Securities for
Original Capital Securities pursuant to the Exchange Offer will be made only
after a timely receipt by the Trust of a book-entry confirmation (as defined
below) evidencing the tender of such Original Capital Securities through ATOP or
certificates representing such Original Capital Securities, a properly compelled
and duly executed Letter of Transmittal, with any required signature guarantees,
and all other required documents. See "The Exchange Offer--Acceptance for
Exchange and Issuance of Capital Securities" and "-- Procedures for Tendering
Original Capital Securities." Therefore, holders of the Original Capital
Securities desiring to tender such Original Capital Securities in exchange for
Exchange Capital Securities should allow sufficient time to ensure timely
delivery. Neither the Corporation nor the Trust is under any duty to give
notification of defects or irregularities with respect to the tenders of
Original Capital Securities for exchange.
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RELIANCE CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law upon the
filing of a certificate of trust with the Delaware Secretary of State. The Trust
exists for the exclusive purposes of: (i) issuing and selling the Trust
Securities; (ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures; and (iii) engaging in only those
other activities necessary, advisable or incidental thereto, including the
Exchange Offer. The Junior Subordinated Debentures are and will be the sole
assets of the Trust, and, accordingly, payments under the Junior Subordinated
Debentures are and will be the sole revenues of the Trust. All of the Common
Securities are owned by the Corporation. The Common Securities rank PARI PASSU,
and payments will be made thereon pro rata, with the Capital Securities, except
that upon the occurrence and continuance of an event of default under the Trust
Agreement resulting from a Debenture Event of Default, the rights of the
Corporation as holder of the Common Securities to payments in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Capital Securities. See
"Description of Capital Securities--Subordination of Common Securities." The
Corporation acquired Common Securities in a Liquidation Amount equal to at least
3% of the total capital of the Trust. The Trust has a term of approximately 35
years, but may dissolve earlier as provided in the Trust Agreement. The Trust's
business and affairs are conducted by the Issuer Trustees, each appointed by the
Corporation as holder of the Common Securities. The Issuer Trustees for the
Trust are The Bank of New York, as the Property Trustee, The Bank of New York
(Delaware), as the Delaware Trustee and three Administrative Trustees who are
officers of the Corporation. The Bank of New York, as Property Trustee, acts as
sole indenture trustee under the Trust Agreement. The Bank of New York also acts
as indenture trustee under the Guarantee and the Indenture. See "Description of
Guarantee" and "Description of Junior Subordinated Debentures." The holder of
the Common Securities of the Trust or, if an Event of Default under the Trust
Agreement has occurred and is continuing, the holders of not less than a
majority in Liquidation Amount of the Capital Securities are entitled to
appoint, remove or replace the Property Trustee and/or the Delaware Trustee. In
no event will the holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights will
be vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the Trust Agreement. The
Corporation, as issuer of the Junior Subordinated Debentures, will pay all fees,
expenses, debts and obligations (other than the payment of principal of (and
premium, if any) and, interest, on the Trust Securities) related to the Trust
and the offering of the Capital Securities and will pay, directly or indirectly,
all ongoing costs, expenses and liabilities of the Trust. The principal
executive office of the Trust is c/o Reliance Bancorp, Inc., 585 Stewart Avenue,
Garden City, New York 11530.
RELIANCE BANCORP, INC.
The Corporation is a Delaware corporation headquartered in Garden City, New
York. The Corporation became the sole stockholder of the Bank, a federally
chartered savings bank, on March 31, 1994 in connection with the Bank's
conversion from mutual to stock form. As of June 30, 1998, the Corporation, on a
consolidated basis, had total assets, liabilities and stockholders' equity of
$2.5 billion, $2.3 billion and $194.9 million, respectively. While the
Corporation conducts most of its business through the Bank, at June 30, 1998,
the Corporation held approximately $24.4 million in securities, primarily
fixed-rate and floating-rate corporate loans.
The Bank is a community-oriented savings institution which operates 30 full
service branch offices in Nassau and Suffolk Counties and the Borough of Queens.
In addition to the branch facilities, the Bank also operates five check cashing
facilities in Manhattan. The Bank, however, considers its primary market area to
be the greater New York City Metropolitan area. The principal business of the
Bank is attracting retail deposits from the general public and investing those
deposits primarily in real estate mortgage, commercial, construction and
consumer loans. The Bank's primary lending emphasis has been the origination of
mortgage loans secured by one-to-four family and multi-family real estate and
consumer
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loans. To a lesser extent, the Bank also originates commercial real estate and
construction loans. Of the $978.7 million of total loans the Bank had
outstanding as of June 30, 1998, $449.3 million, or 51.0%, were one-to-four
family residential real estate loans, $243.1 million, or 24.8%, were
multi-family loans, and $137.9 million, or 14.1%, were consumer loans and $49.9
million or 5.1% were commercial loans. The consumer loans consisted of $94.5
million, or 9.7% of total loans, of home equity lines of credit, $19.1 million,
or 1.9% of total loans, of home equity loans, $15.3 million, or 1.5% of total
loans, of guaranteed student loans, and $9.0 million, or 1.0% of total loans, of
other consumer loans. Commercial real estate and construction loans aggregated
$48.5 million, or 5.0% of total loans, as of June 30, 1998.
During periods in which the demand for loans which meet the Bank's
underwriting, investment and interest rate risk standards is lower than the
amount of funds available for investment, the Bank invests excess funds in
securities investments, including mortgage-backed securities, debt and equity
securities and other investments permitted by federal laws and regulations. At
June 30, 1998, the Bank's securities portfolio totaled $1.3 billion, of which
$1.2 billion was invested in mortgage-backed securities, and $150.7 in other
securities.
Since the Bank's conversion to a stock institution in March 1994, the
Corporation has acquired the Bank of Westbury (August 1995), Sunrise Bancorp,
Inc. (January 1996) and Continental Bank (October 1997). As a result of these
acquisitions and the Bank's internal growth, the Corporation's consolidated
assets, liabilities and stockholders' equity have increased from $819.8 million,
$660.7 million and $159.1 million, at March 31, 1994, respectively, to $2.5
billion, $2.3 billion and $194.9 million at June 30, 1998, respectively.
Furthermore, as a result of its most recent acquisition of Continental Bank, the
Bank has begun to offer commercial loan products, which it had previously
offered on a limited basis. At June 30, 1998, the Bank had $49.9 million of
commercial loans outstanding, or 5.1% of total loans.
The Corporation, as a registered unitary savings and loan holding company,
is subject to examination and regulation by the OTS, and, as a publicly held
company whose shares of common stock are registered under the Exchange Act, is
subject to the periodic reporting and other requirements of the Commission under
the Exchange Act. The Bank, as a federally chartered savings bank, is subject to
comprehensive regulation and examination by the OTS, as its primary federal
regulator, and by the Federal Deposit Insurance Corporation, which administers
the Savings Association Insurance Fund (the "SAIF"), which insures the Bank's
deposits to the maximum extent permitted by law.
The Corporation's executive office is located at 585 Stewart Avenue, Garden
City, New York 11530-4701. Its telephone number is (516) 222-9300.
NEITHER THE EXCHANGE CAPITAL SECURITIES NOR THE EXCHANGE JUNIOR SUBORDINATED
DEBENTURES ARE OBLIGATIONS OF OR GUARANTEED BY THE BANK.
26
<PAGE>
USE OF PROCEEDS
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. The Original
Capital Securities surrendered in exchange for the Exchange Capital Securities
will be retired and cancelled.
The proceeds to the Trust from the offering of the Original Capital
Securities were $50,000,000 (without giving effect to approximately $1,250,000
of commissions and expenses paid by the Corporation). All of the proceeds from
the sale of Original Capital Securities were invested by the Trust in the
Original Junior Subordinated Debentures. The Corporation invested approximately
$18,750,000 of the net proceeds to it from its sale of the Original Junior
Subordinated Debentures in equity of the Bank. Net proceeds retained by the
Corporation has been used by the Corporation for general corporate purposes,
including the investment of funds in the Corporation's subsidiaries and may be
used for potential future acquisitions. There currently are no agreements,
arrangements or understandings with respect to any potential acquisitions.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
the Corporation on a consolidated basis for the respective periods indicated.
<TABLE>
<CAPTION>
AT JUNE 30,
------------------------------------------
1998 1997 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Ratios of Earnings to Combined Fixed Charges:
Excluding interests on deposits............................................. 2.43x 2.20x 3.05x 3.61x
Including interest on deposits.............................................. 1.39x 1.29x 1.41x 1.58x
<CAPTION>
1994
---------
<S> <C>
Ratios of Earnings to Combined Fixed Charges:
Excluding interests on deposits............................................. 6.84x
Including interest on deposits.............................................. 1.65x
</TABLE>
For purposes of computing the ratios of earnings to combined fixed charges,
earnings represents net income plus applicable income taxes (including
cummulative effect of change in accounting for income taxes of $1.2 million
during year ended June 30, 1994) and fixed charges. Fixed charges, excluding
interest on deposits, includes gross interest expense other than on deposits.
Fixed charges, including gross interest on deposits, includes all interest
expense.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust is treated as a subsidiary of
the Corporation, and, accordingly, the accounts of the Trust are included in the
consolidated financial statements of the Corporation. The Capital Securities
will be presented as a separate line item in the consolidated balance sheets of
the Corporation, entitled "Corporation-Obligated Mandatorily Redeemable Capital
Securities of Subsidiary Trust Holding Solely Parent Company Debenture" and
appropriate disclosures about the Capital Securities, the Guarantee and the
Junior Subordinated Debentures are intended to be included in the notes to the
consolidated financial statements of the Corporation. For financial reporting
purposes, the Corporation will record Distributions payable on the Capital
Securities as interest expense in its consolidated statements of income.
27
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Corporation, on a
consolidated basis, as of June 30, 1998, and as adjusted to give effect to
consummation of the Exchange Offer. The issuance of the Exchange Captial
Securities in the Exchange Offer will have no effect on the Capitalization of
the Corporation. This table should be read in conjunction with the consolidated
financial statements of the Corporation, including the related notes thereto and
discussion thereof, which are incorporated herein by reference. See
"Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
AT JUNE 30, 1998
-----------------------
AS
ACTUAL ADJUSTED
---------- -----------
<S> <C> <C>
(IN THOUSANDS)
LONG TERM BORROWINGS:
FHLB advances........................................................................ $ 182,136 $ 182,136
Securities sold under agreements to repurchase....................................... 398,070 398,070
---------- -----------
Total long-term borrowings....................................................... $ 580,206 $ 580,206
---------- -----------
Corporation-Obligated Mandatorily Redeemable Capital Securities of Subsidiary Trust
Holding Solely Parent Company Debentures (1)........................................... 50,000 50,000
---------- -----------
STOCKHOLDERS' EQUITY:
Preferred Stock, $.01 par value, 4,000,000 shares authorized; none issued................ -- --
Common stock, $.01 par value, 20,000,000 shares authorized; 10,750,820 shares issued;
(9,564,981 outstanding)................................................................ 108 108
Additional paid-in capital............................................................... 117,909 117,909
Retained earnings, substantially restricted.............................................. 102,305 102,305
Unrealized appreciation on securities available-for-sale, net of taxes................... 4,212 4,212
Less:
Unallocated common stock held by ESOP................................................ (4,554) (4,554)
Unearned common stock held by RRP.................................................... (713) (713)
Unearned common stock held by SERP................................................... (373) (373)
Treasury stock, at cost (1,185,832 shares)........................................... (24,030) (24,030)
Total stockholders' equity....................................................... 194,864 194,864
---------- -----------
Total long-term borrowings, minority interest in subsidiary
and stockholders' equity...............................................................
$ 825,070 $ 825,070
---------- -----------
</TABLE>
- ------------------------
(1) Reflects the Original Capital Securities. As described herein, the sole
assets of the Trust, which is a subsidiary of the Corporation, are
$51,547,000 aggregate principal amount of the 8.17% Junior Subordinated
Debentures, Series A, which will mature on May 1, 2028. The Corporation owns
all of the Common Securities issued by the Trust. See "Description of Junior
Subordinated Debentures."
28
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE CORPORATION
Set forth below are the selected consolidated financial and other data of
the Corporation. This financial data is derived in part from, and it should be
read in conjunction with the Corporation's consolidated financial statements and
related notes. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
AT JUNE 30,
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
------------ ------------ ------------ ---------- ----------
SELECTED FINANCIAL DATA:
Total assets................................. $ 2,485,729 $ 1,976,764 $ 1,782,550 $ 931,436 $ 830,501
Loans receivable, net........................ 969,797 909,321 817,746 332,080 330,720
Debt and equity securities available-for-
sale....................................... 134,907 26,909 13,271 23,880 37,588
Debt and equity securities held-to-
maturity................................... 40,189 46,026 48,330 23,890 39,492
Mortgage-backed securities available-
for-sale................................... 940,347 721,819 591,740 104,453 --
Mortgage-backed securities held-to-
maturity................................... 249,347 159,356 184,492 413,762 394,199
Excess of cost over fair value of net assets
acquired................................... 58,936 45,463 49,429 -- --
Real estate owned, net....................... 755 450 1,564 1,558 2,911
Deposits..................................... 1,682,298 1,436,037 1,345,626 670,317 587,221
FHLB advances................................ 182,136 40,000 3,000 40,000 78,000
Securities sold under agreements to
repurchase................................. 398,070 311,913 263,160 57,035 --
Total stockholders' equity(1)................ 194,864 162,670 153,619 153,733 157,851
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
---------- ------------ ------------ --------- ---------
SELECTED OPERATING DATA:
Interest income.................................. $ 153,819 $ 133,289 $ 100,372 $ 61,260 $ 47,224
Interest expense................................. 86,828 71,653 52,985 28,361 20,024
---------- ------------ ------------ --------- ---------
Net interest income.............................. 66,991 61,636 47,387 32,899 27,200
Less provision for loan losses................... 1,650 950 725 400 393
---------- ------------ ------------ --------- ---------
Net interest income after provision for loan
losses......................................... 65,341 60,686 46,662 32,499 26,807
Non-interest income.............................. 7,859 3,412 3,110 1,257 1,119
General and administrative expenses.............. 35,225 30,987 25,596 17,597 13,814
Real estate operations, net...................... 218 383 579 (385) 1,080
Amortization of excess of cost over fair value of
net assets acquired............................ 4,218 3,404 1,928 -- --
SAIF recapitalization charge..................... -- 8,250 -- -- --
---------- ------------ ------------ --------- ---------
Total non-interest expense....................... 39,661 43,024 28,103 17,212 14,894
---------- ------------ ------------ --------- ---------
Income before income taxes and cumulative effect
of change in accounting principle.............. 33,539 21,074 21,669 16,544 13,032
Income tax expense............................... 14,810 10,138 9,946 6,842 5,538
---------- ------------ ------------ --------- ---------
Income before cumulative effect of change in
accounting principle........................... 18,729 10,936 11,723 9,702 7,494
Cumulative effect of change in accounting
principle(2)................................... -- -- -- -- 1,200
---------- ------------ ------------ --------- ---------
Net income................................... $ 18,729 $ 10,936 $ 11,723 $ 9,702 $ 8,694
---------- ------------ ------------ --------- ---------
---------- ------------ ------------ --------- ---------
PER SHARE DATA:(3)
Earnings per share (basic)....................... $ 2.11 $ 1.32 $ 1.36 $ 1.04 $ 0.22
Earnings per share (diluted)..................... 1.99 1.25 1.32 1.03 0.22
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED JUNE 30,
---------------------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
PERFORMANCE RATIOS:
Return on average assets(2)................................. 0.86% 0.58% 0.83% 1.08% 1.15%
Return on average stockholders' equity (2)(4)............... 10.42 7.02 7.58 6.17 9.82
Return on average tangible stockholders' equity (2)(4)...... 15.14 10.10 9.18 6.17 9.82
Core deposits to total deposits............................. 36.95 37.40 41.68 36.12 49.08
Net interest spread......................................... 2.98 3.22 3.17 3.11 3.36
Net interest margin (5)..................................... 3.28 3.47 3.52 3.77 3.69
General and administrative expenses to average assets....... 1.62 1.66 1.81 1.97 1.82
Operating income to average assets (6)...................... 0.29 0.17 0.16 0.14 0.15
Average interest-earning assets to average interest-bearing
liabilities............................................... 1.07x 1.06x 1.09x 1.20x 1.12x
PERFORMANCE RATIOS, EXCLUDING SAIF RECAPITALIZATION
ASSESSMENT:
Return on average assets (2)................................ 0.86% 0.84% 0.83% 1.08% 1.15%
Return on average stockholders' equity (2)(4)............... 10.42 10.12 7.58 6.17 9.82
Return on average tangible stockholders' equity (2)(4)...... 15.14 14.56 9.18 6.17 9.82
CAPITAL RATIOS (AT PERIOD END):
Average stockholders' equity to average assets.............. 8.45 8.24 10.92 17.60 11.68
Stockholders' equity to total assets........................ 7.84 8.23 8.62 16.51 19.01
Tangible stockholders' equity to tangible assets............ 5.60 6.07 6.01 16.51 19.01
Tangible capital (Bank only)................................ 6.10 5.60 5.60 13.20 13.90
Core capital (Bank only).................................... 6.10 5.60 5.60 13.20 13.90
Risk-based capital (Bank only).............................. 15.30 15.20 14.70 38.20 38.80
ASSET QUALITY RATIOS (AT PERIOD END):
Non-performing loans to total loans (7)..................... 0.95% 1.61% 1.58% 1.10% 1.08%
Non-performing loans to total assets........................ 0.37 0.75 0.73 0.39 0.43
Non-performing assets to total assets (8)................... 0.40 0.77 0.82 0.56 0.78
Net loans charged off to average loans...................... 0.07 0.03 0.03 0.03 0.09
Allowance for loan losses to total loans.................... 0.91 0.57 0.55 0.52 0.43
Allowance for loan losses to non-performing loans........... 96.12 35.18 34.63 47.10 39.38
</TABLE>
- ------------------------------
(1) At June 30, 1998, 1997, 1996, 1995 and 1994, amount includes retained
earnings of $101.0 million, $89.7 million, $84.0 million, $76.2 million and
$70.1 million, respectively, substantially restricted.
(2) Reflects the cumulative effect of the Corporation's adoption of Statement of
Financial Accounting Standard No. 109, "Accounting for Income Taxes," in the
fiscal year ended June 30, 1994.
(3) All earnings per share calculations reflect the adoption of Statement of
Financial Accounting Standard No. 128. Earnings per share for fiscal year
ended June 30, 1994 is based on net income from March 31, 1994 to June 30,
1994.
(4) For purposes of these calculations, average stockholders' equity and average
stockholders' tangible equity exclude the effect of changes in the
unrealized appreciation (depreciation) on securities available for sale, net
of taxes.
(5) Calculation is based upon net interest income before provision for loan
losses divided by average interest-earning assets.
(6) Operating income represents total non-interest income less net gain on sale
of debt and equity securities.
(7) Non-performing loans consist of all loans 90 days or more past due and any
other loans, or any portion thereof, that have been determined to be
doubtful of collection.
(8) Non-performing assets consist of non-performing loans and real estate owned.
31
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Original Capital Securities, the
Corporation and the Trust entered into the Registration Rights Agreement with
the Initial Purchaser, pursuant to which the Corporation and the Trust agreed to
file and to use their reasonable best efforts to cause to be declared effective
by the Commission a registration statement with respect to the exchange of the
Exchange Capital Securities for Original Capital Securities with terms identical
in all material respects to the terms of the Original Capital Securities. A copy
of the Registration Rights Agreement has been filed as an Exhibit to the
Registration Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Corporation and the Trust under the Registration Rights Agreement. The form
and terms of the Exchange Capital Securities are the same as the form and terms
of the Original Capital Securities except that the Exchange Capital Securities
(i) have been registered under the Securities Act and therefore will not be
subject to certain restrictions on transfer under federal and state securities
laws and (ii) will not provide for any increase in the Distribution Rate
thereon. In that regard, the Original Capital Securities provide, among other
things, that, if a registration statement relating to the Exchange Offer has not
been filed by September 25, 1998, and declared effective by October 23, 1998,
the Distribution Rate borne by the Original Capital Securities will increase by
0.25% per annum until the Exchange Offer is consummated. Upon consummation of
the Exchange Offer, holders of Original Capital Securities will not be entitled
to any increase in the Distribution Rate thereon or any further registration
rights under the Registration Rights Agreement. See "Risk Factors--Consequences
of a Failure to Exchange Original Capital Securities" and "Description of
Capital Securities."
The Exchange Offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of Original Capital Securities in any jurisdiction in
which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
Exchange Offer means any person in whose name the Original Capital Securities
are registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any participant in
the DTC system whose name appears on a security position listing as the holder
of such Original Capital Securities and who desires to deliver such Original
Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange as soon as
practicable after the date hereof, the Exchange Guarantee for the Original
Guarantee and the Exchange Junior Subordinated Debentures, in an amount
corresponding to the Original Capital Securities accepted for exchange, for a
like aggregate principal amount of the Original Junior Subordinated Debentures.
The Exchange Guarantee and the Exchange Junior Subordinated Debentures have been
registered under the Securities Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $50,000,000 aggregate Liquidation Amount of Exchange Capital
Securities for a like aggregate Liquidation Amount of Original Capital
Securities properly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures described below. The Trust will
issue, promptly after the Expiration Date, an aggregate Liquidation Amount of up
to $50,000,000 of Exchange Capital Securities in exchange for a like aggregate
Liquidation Amount of outstanding Original Capital Securities tendered and
accepted in connection with the Exchange Offer. Holders may tender their
Original Capital Securities in whole or in part in a Liquidation Amount of not
less than $100,000 (100 Capital Securities) or any integral multiple of $1,000
32
<PAGE>
Liquidation Amount (one Capital Security) in excess thereof, provided that if
any Original Capital Securities are tendered in exchange for part, the
untendered Liquidation Amount must be $100,000 or any integral multiple of
$1,000 in excess thereof.
The Exchange Offer is not conditioned upon any minium Liquidation Amount of
Original Capital Securities being tendered. As of the date of this Prospectus,
$50,000,000 aggregate Liquidation Amount of the Original Capital Securities is
outstanding.
Holders of Original Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Original Capital
Securities which are not tendered for or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Trust Agreement, but will not be entitled to any further
registration rights under the Registration Rights Agreement. See "Risk
Factors--Consequences of a Failure to Exchange Original Capital Securities" and
"Description of Original Securities."
If any tendered Original Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Original Capital
Securities will be returned, without expense, to the tendering holder thereof
promptly after the Expiration Date.
Holders who tender Original Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Original Capital Securities in connection with the
Exchange Offer. The Corporation will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "--Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE CORPORATION NOR ANY ISSUER TRUSTEE OF
THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF ORIGINAL CAPITAL SECURITIES AS
TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR
ORIGINAL CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE
HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF ORIGINAL CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF ORIGINAL CAPITAL SECURITIES
TO TENDER BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York Time, on ,
1998 unless the Exchange Offer is extended by the Corporation or the Trust (in
which case the term "Expiration Date" shall mean the latest date and time which
the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at anytime and from time to
time, (i) to delay the acceptance of the Original Capital Securities for
exchange, (ii) to terminate the Exchange Offer (whether or not any Original
Capital Securities have theretofore been accepted for exchange) if the
Corporation and the Trust determine, in their sole and absolute discretion, that
any of the events or conditions referred to under "--Conditions to the Exchange
Offer" have occurred or exist or have not been satisfied, (iii) to extend the
Expiration Date of the Exchange Offer and retain all Original Capital Securities
tendered pursuant to the Exchange Offer, subject, however, to the right of
holders of Original Capital Securities to withdraw their tendered Original
Capital Securities as described under "--Withdrawal Rights," and (iv) to waive
any condition or otherwise amend the terms of the Exchange Offer in any respect.
If the Exchange Offer is amended in a manner determined by the Corporation and
the Trust to constitute a material change, or if the Corporation and the Trust
waive a material condition of the Exchange Offer, the Corporation and the Trust
will promptly
33
<PAGE>
disclose such amendment by means of a Prospectus supplement that will be
distributed to the registered holders of the Original Capital Securities, and
the Corporation and the Trust will extend the Exchange Offer to the extent
required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York Time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation and the Trust may choose to make any public
announcement and subject to applicable law, the Corporation and the Trust shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to an appropriate news
agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF EXCHANGE CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, Exchange Capital
Securities for Original Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
In all cases, delivery of Exchange Capital Securities in exchange for
Original Capital Securities tendered and accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent of a
book-entry confirmation (as defined below) evidencing the tender of such
Original Capital Securities through ATOP or certificates representing such
Original Capital Securities, a properly completed and duly executed Letter of
Transmittal, with any required signature guarantees, and all other required
documents.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Original Capital Securities into the Exchange Agent's
account at DTC. The term "Agent's Message" means a message, transmitted by DTC
to and received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgment from
the tendering participant, which acknowledgment states that such participant has
received and agrees to be bound by the Letter of Transmittal and that the Trust
and the Corporation may enforce such Letter of Transmittal against such
participant.
Subject to the terms and conditions of the Exchange Offer, the Corporation
and the Trust will be deemed to have accepted for exchange, and thereby
exchanged, Original Capital Securities validly tendered and not withdrawn as, if
and when the Trust gives oral or written notice to the Exchange Agent of the
Corporation's and the Trust's acceptance of such Original Capital Securities for
exchange pursuant to the Exchange Offer. The Exchange Agent will act as agent
for the Trust for the purpose of receiving tenders of Original Capital
Securities, Letters of Transmittal and related documents and transmitting
Exchange Capital Securities to validly tendering holders. Such exchange will be
made promptly after the Expiration Date. If for any reason whatsoever,
acceptance for exchange or the exchange of any Original Capital Securities
tendered pursuant to the Exchange Offer is delayed (whether before or after the
Trust's acceptance for exchange of Original Capital Securities) or the
Corporation and the Trust extend the Exchange Offer or are unable to accept for
exchange or exchange Original Capital Securities tendered pursuant to the
Exchange Offer, then without prejudice to the Corporation's and the Trust's
rights set forth herein, the Exchange Agent may, nevertheless, on behalf of the
Corporation and the Trust subject to Rule 14e-1(c) under the Exchange Act,
retain tendered Original Capital Securities and such Original Capital Securities
may not be withdrawn except to the extent tendering holders are entitled to
withdrawal rights as described under "--Withdrawal Rights."
Pursuant to the Letter of Transmittal or Agent's Message in lieu thereof, a
holder of Original Capital Securities will warrant and agree in the Letter of
Transmittal that it has full power and authority to tender, exchange, sell,
assign and transfer Original Capital Securities, that the Trust will acquire
good, marketable and unencumbered title to the tendered Original Capital
Securities, free and clear of all liens, restrictions,
34
<PAGE>
charges and encumbrances, and the Original Capital Securities tendered for
exchange are not subject to any adverse claims or proxies. The holder also will
warrant and agree that it will, upon request, execute and deliver any additional
documents deemed by the Corporation, the Trust or the Exchange Agent to be
necessary or desirable to complete the exchange, sale assignment and transfer of
the Original Capital Securities tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING ORIGINAL CAPITAL SECURITIES
VALID TENDER. Except as set forth below, in order for Original Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or (in the case of a book-entry transfer) an
Agent's Message in lieu of a Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at one of its addresses set
forth under "--Exchange Agent," and (i) tendered Original Capital Securities
must be received by the Exchange Agent,(ii) such Original Capital Securities
must be tendered pursuant to the procedures for book-entry transfer set forth
below and a book-entry confirmation, including an Agent's Message if the
tendering holder has not delivered a Letter of Transmittal, must be received by
the Exchange Agent, in each case on or prior to the Expiration Date, or (iii)
the guaranteed delivery procedures set forth below must be complied with.
If less than all of the Original Capital Securities are tendered, a
tendering holder should fill in the amount of Original Capital Securities being
tendered in the appropriate box on the Letter of Transmittal or so indicate in
an Agent's Message in lieu of the Letter of Transmittal and the untendered
Liquidation Amount must be $100,000 or any integral multiple of $1,000 in excess
thereof. The entire amount of Original Capital Securities delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN-RECEIPT REQUESTED,
PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Exchange Agent will establish an account with
respect to the Original Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any financial
institution that is a participant in DTC's book-entry transfer facility system
may make a book-entry delivery of the Original Capital Securities by causing DTC
to transfer such Original Capital Securities into the Exchange Agent's account
at DTC in accordance with DTC's procedures for transfers. However, although
delivery of Original Capital Securities may be effected through book-entry
transfer into the Exchange Agent's account at DTC, the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in lieu of the Letter of
Transmittal, and any other required documents, must in any case be delivered to
and received by the Exchange Agent at its address set forth under "--Exchange
Agent" on or prior to the Expiration Date, or the guaranteed delivery procedure
set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
SIGNATURE GUARANTEES. Certificates for the Original Capital Securities need
not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (i) a certificate for the Original Capital Securities is
registered in a name other than that of the person surrendering the certificate
or
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(ii) such holder completes the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in the Letter of Transmittal. In the case of (i)
or (ii) above, such certificates for Original Capital Securities must be duly
endorsed or accompanied by a properly executed bond power, with the endorsement
or signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
"eligible guarantor institution," including (as such terms are defined therein):
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association that is a participant in a Securities Transfer
Association (an "Eligible Institution"), unless surrendered on behalf of such
Eligible Institution. See Instruction to the Letter of Transmittal.
GUARANTEED DELIVERY. If a holder desires to tender Original Capital
Securities pursuant to the Exchange Offer and the certificates for such Original
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, such Original Capital Securities may nevertheless be tendered, provided
that all of the following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Original Capital Securities, in proper form for transfer, together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), or Agent's Message in lieu thereof, with any required
signature guarantees and any other documents required by the Letter of
Transmittal, are received by the Exchange Agent within three New York Stock
Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of Exchange Capital
Securities in exchange for Original Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Original Capital Securities, or of a
book-entry confirmation with respect to such Original Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or Agent's Message in lieu thereof, together with any required
signature guarantees and any other documents required by the Letter of
Transmittal. Accordingly, the delivery of Exchange Capital Securities might not
be made to all tendering holders at the same time, and will depend upon when
Original Capital Securities, book-entry confirmation with respect to Original
Capital Securities and other required documents are received by the Exchange
Agent.
The Corporation and the Trust's acceptance for exchange of Original Capital
Securities tendered pursuant to any of the procedures described above will
constitute a binding agreement between the tendering holder, the Corporation and
the Trust upon the terms and subject to the conditions of the Exchange Offer.
DETERMINATION OF VALIDITY. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Original Capital Securities will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final and
binding of all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of
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<PAGE>
which, or exchange for, may, in the opinion of counsel to the Corporation and
the Trust, be unlawful. The Corporation and the Trust also reserve the absolute
right, subject to applicable law, to waive any of the conditions of the Exchange
Offer as set for thereunder "--Conditions to the Exchange Offer" or any
condition or irregularity in any tender of Original Capital Securities of any
particular holder whether or not similar conditions or irregularities are waived
in the case of other holders.
The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Original Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. None of the Corporation,
the Trust, any affiliates or assigns of the Corporation or the Trust, the
Exchange Agent or any other person shall be under any duty to give any
notification of any irregularities in tenders or incur any liability for failure
to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney or
any other document required by the Letter of Transmittal is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, such person
should so indicate when signing, and unless waived by the Corporation and the
Trust, proper evidence satisfactory to the Corporation and the Trust, in their
sole discretion, of such person's authority to so act must be submitted.
A beneficial owner of Original Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF EXCHANGE CAPITAL SECURITIES
The Trust is making the Exchange Offer for the Exchange Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Corporation nor the
Trust sought its own interpretive letter and there can be no assurance that the
staff of the Division of Corporation Finance of the Commission would make a
similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the Commission, and subject to
the two immediately following sentences, the Corporation and the Trust believe
that Exchange Capital Securities issued pursuant to this Exchange Offer in
exchange for Original Capital Securities may be offered for resale, resold and
otherwise transferred by a holder thereof (other than a holder who is a
broker-dealer) without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such Exchange Capital
Securities are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. However, any holder of
Original Capital Securities who is an Affiliate of the Corporation or the Trust
or who intends to participate in the Exchange Offer for the purpose of
distributing Exchange Capital Securities, or any broker-dealer who purchased
Original Capital Securities from the Trust to resell pursuant to Rule 144A or
any other available exemption under the Securities Act (i) will not be able to
rely on the interpretations of the staff of the Division of Corporation Finance
of the Commission set forth in the above-mentioned interpretive letters, (ii)
will not be permitted or entitled to tender such Original Capital Securities in
the Exchange Offer and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or other
transfer of such Original Capital Securities, unless such sale is made pursuant
to an exemption from such requirements. In addition, as described below,
Participating Broker-Dealers must deliver a prospectus meeting the requirements
of the Securities Act in connection with any resales of Exchange Capital
Securities.
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Each holder of Original Capital Securities who wishes to exchange Original
Capital Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an Affiliate of the Corporation or the
Trust, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities and (iv) if
such holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such Exchange Capital Securities. The Letter of Transmittal contains the
foregoing representations. In addition, the Corporation and the Trust may
require such holder, as a condition to such holder's eligibility to participate
in the Exchange Offer, to furnish to the Corporation and the Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such holder
holds the Capital Securities to be exchange in the Exchange Offer. Each
Participating Broker-Dealer will be deemed to have acknowledged by execution of
the Letter of Transmittal or delivery of an Agent's Message that it acquired the
Original Capital Securities for its own account as the result of market-making
activities or their trading activities and must agree that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Capital Securities. The Letter of Transmittal states
that by so acknowledging and by delivering a prospectus, a Participating
Broker-Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Based on the position taken by the staff of the
Division of Corporation Finance of the Commission in the interpretive letters
referred to above, the Corporation and the Trust believe that Participating
Broker-Dealers who acquired Original Capital Securities for their own accounts
as a result of market-making activities or other trading activities may fulfill
their prospectus delivery requirements with respect to the Exchange Capital
Securities received upon exchange of such Original Capital Securities (other
than Original Capital Securities which represent an unsold allotment from the
original sale of the Original Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be the prospectus prepared for an
exchange offer so long as it contains a description of the plan of distribution
with respect to the resale of such Exchange Capital Securities. Accordingly,
this Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer during the period referred to below in
connection with resales of Exchange Capital Securities received in exchange for
Original Capital Securities where such Original Capital Securities were acquired
by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Corporation and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such Exchange Capital Securities for a period ending 90-days after the
Expiration Date (subject to extension under certain limited circumstances
described below) or, if earlier, when all such Exchange Capital Securities have
been disposed of by such Participating Broker-Dealer. See "Plan of
Distribution." However, a Participating Broker-Dealer who intends to use this
Prospectus in connection with the resale of Exchange Capital Securities received
in exchange for Original Capital Securities pursuant to the Exchange Offer must
notify the Corporation or the Trust, or cause the Corporation or the Trust to be
so notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent at one of
the addresses set forth herein under "--Exchange Agent." Any person, including
any Participating Broker-Dealer, who is an Affiliate of the Corporation or the
Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Original
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal or delivery of an Agent's Message in
lieu thereof, that, upon receipt of notice from the Corporation or the Trust of
the occurrence of any event or the discovery of any fact which makes any
statement contained or incorporated
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by reference in this Prospectus untrue in any material respect or which causes
this Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference herein, in light of the
circumstances under which they were made, not misleading or of the occurrence of
certain other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of Exchange Capital Securities
(or the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) pursuant to this Prospectus or until the Corporation or the Trust
has amended or supplemented this Prospectus to correct such misstatement or
omission and has furnished copies of the amended or supplemented Prospectus to
such Participating Broker-Dealer or the Corporation or the Trust has given
notice that the sale of the Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be. If the Corporation or the Trust gives such notice
to suspend the sale of the Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Junior Subordinated Debentures, as applicable), it
shall extend the 90-day period referred to above during which Participating
Broker-Dealers are entitled to use this Prospectus in connection with the resale
of Exchange Capital Securities by the number of days during the period from and
including the date of the giving of such notice to and including the date when
Participating Broker-Dealers shall have received copies of the amended or
supplemented Prospectus necessary to permit resales of the Exchange Capital
Securities or to and including the date on which the Corporation or the Trust
has given notice that the sale of Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Original Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth under "-- Exchange Agent" on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Original Capital Securities to be withdrawn,
the aggregate principal amount of Original Capital Securities to be withdrawn,
and (if certificates for such Original Capital Securities have been tendered)
the name of the registered holder of the Original Capital Securities as set
forth on the Original Capital Securities, if different from that of the person
who tendered such Original Capital Securities. If Original Capital Securities
have been delivered or otherwise identified to the Exchange Agent, then prior to
the physical release of such Original Capital Securities, the tendering holder
must submit the certificate numbers shown on the particular Original Capital
Securities to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of Original Capital
Securities tendered for the account of an Eligible Institution. If Original
Capital Securities have been tendered pursuant to the procedures for book-entry
transfer set forth in "-- Procedures for Tendering Original Capital Securities,"
the notice of withdrawal must specify the name and number of the account at DTC
to be credited with the withdrawal of Original Capital Securities, in which case
a notice of withdrawal will be effective if delivered to the Exchange Agent by
written or facsimile transmission. Withdrawals of tenders of Original Capital
Securities may not be rescinded. Original Capital Securities properly withdrawn
will not be deemed validly tendered for purposes of the Exchange Offer, but may
be retendered at any subsequent time on or prior to the Expiration Date by
following any of the procedures described above under "--Procedures for
Tendering Original Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Corporation and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. None of the Corporation, the Trust, any affiliates or
assigns of the Corporation or the Trust, the Exchange Agent or any other person
shall be under any duty to give any notification of any irregularities in any
notice of withdrawal or incur any liability for failure to give any such
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notification. Any Original Capital Securities which have been tendered but which
are withdrawn will be returned to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON EXCHANGE CAPITAL SECURITIES
Holders of the Exchange Capital Securities as of the applicable record date
will be entitled to receive Distributions payable semi-annually in arrears on
May 1 and November 1 of each year, commencing May 1, 1999. Such Distributions
will accumulate from the later of the most recent Distribution payment date to
which Distributions have been duly paid or duly provided for with respect to the
Exchange Capital Securities or the Original Capital Securities which were
exchanged for such Exchange Capital Securities, or from April 28, 1998, the date
of the original issuance of the Original Capital Securities.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, the Corporation and the Trust will not be required to
accept for exchange, or to exchange, any Original Capital Securities for any
Exchange Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Original Capital Securities have theretofore been
accepted for exchange) or may waive any conditions to or amend the Exchange
Offer, if any of the following conditions have occurred or exists or have not
been satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the Exchange Capital Securities issued
pursuant to the Exchange Offer in exchange for Original Capital Securities
to be offered for resale, resold and otherwise transferred by holders
thereof (other than broker-dealers and any such holder which is an Affiliate
of the Corporation or the Trust) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
Exchange Capital Securities are acquired in the ordinary course of such
holders' business and such holders have no arrangement or understanding with
any person to participate in the distribution of such Exchange Capital
Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Corporation or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer;
(c) any action or proceeding shall have been instituted or threatened in
any court or by or before any governmental agency or body with respect to
the Exchange Offer, which in the Corporation's and the Trust's judgment,
would reasonably be expected to impair its ability to proceed with the
Exchange Offer;
(d) a banking moratorium shall have been declared by United States
federal or Maryland or New York state authorities which, in the
Corporation's and the Trust's judgment, would reasonably be expected to
impair the ability of the Trust or the Corporation to proceed with the
Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Corporation's
and the Trust's judgment, would reasonably be expected to impair the ability
of the Corporation or the Trust to proceed with the Exchange Offer; or
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Corporation or the Trust, threatened for that purpose, or any
governmental approval which either the Corporation or the Trust shall, in
its sole discretion, deem necessary for the consummation of the Exchange
Offer as contemplated hereby has not been obtained.
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If the Corporation and the Trust determine in their sole and absolute
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, the Corporation and the Trust may, subject to
applicable law, terminate the Exchange Offer (whether or not any Original
Capital Securities have theretofore been accepted for exchange) or may waive any
such condition or otherwise amend the terms of the Exchange Offer in any
respect. If such waiver or amendment constitutes a material change to the
Exchange Offer, the Corporation and the Trust will promptly disclose such waiver
or amendment by means of a Prospectus supplement that will be distributed to the
registered holders of the Original Capital Securities and will extend the
Exchange Offer to the extent required by Rule 14e-1 under the Exchange Act.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Delivery of the Letter of Transmittal and any other required documents,
questions, requests for assistance, and requests for additional copies of this
Prospectus or of the Letter of Transmittal should be directed to the Exchange
Agent as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery:
The Bank of New York The Bank of New York
101 Barclay Street--7E 101 Barclay Street--21 West
New York, New York 10286 Corporate Trust Services Window
Attention: Noriko Miyazaki, Ground Level
Reorganization Section New York, New York 10286
Attention: Noriko Miyazaki,
Reorganization Section
</TABLE>
Confirm by Telephone
or for Information call:
(212) 815-6333
Facsimile Transmission:
(Eligible Institutions Only)
(212) 815-6339
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Original Capital Securities,
and in handling or tendering for their customers.
Holders who tender their Original Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Original Capital
Securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of Original Capital Securities in connection with the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
Neither the Corporation nor the Trust will make any payment to brokers,
dealers or other nominees soliciting acceptances of the Exchange Offer.
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DESCRIPTION OF EXCHANGE SECURITIES; COMPARISON TO ORIGINAL SECURITIES
The terms of the Exchange Securities are identical in all material respects
to the Original Securities, except that (i) the Original Securities have not
been registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the applicable Registration
Rights Agreement (which rights will terminate upon consummation of the Exchange
Offer, except under limited circumstances); (ii) the Exchange Capital Securities
will not contain certain restrictions on transfer applicable to Original Capital
Securities; (iii) the Exchange Capital Securities will not provide for any
increase in the Distribution rate thereon; and (iv) the Exchange Junior
Subordinated Debentures will not provide for any increase in the interest rate
thereon. The Original Securities provide that, in the event that a registration
statement relating to the Exchange Offer has not been filed by September 25,
1998 and been declared effective by October 23, 1998, or, in certain limited
circumstances, in the event a shelf registration statement (the "Shelf
Registration Statement") with respect to the resale of the Original Capital
Securities is not declared effective by the time required by the Registration
Rights Agreement, then liquidated damages will accrue at the rate of 0.25% per
annum on the principal amount of the Original Junior Subordinated Debentures and
Distributions will accrue at the rate of 0.25% per annum on the Liquidation
Amount of the Original Capital Securities, for the period from the occurrence of
such event until such time as such registration statement has been filed or
declared effective, as the case may be. The Exchange Securities are not, and
upon consummation of the Exchange Offer the Original Securities will not be,
entitled to any such additional interest or Distributions. Accordingly, holders
of Original Capital Securities should review the information set forth under
"Risk Factors--Consequences of a Failure to Exchange Original Capital
Securities."
DESCRIPTION OF CAPITAL SECURITIES
The Original Capital Securities represent and the Exchange Capital
Securities will represent beneficial interests in the Trust, and the holders
thereof will be entitled to a preference over the Common Securities in certain
circumstances with respect to Distributions and amounts payable on redemption of
the Trust Securities or liquidation of the Trust. See "--Subordination of Common
Securities." The Trust Agreement will not be qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), except upon effectiveness
of the Exchange Offer Registration Statement or the Shelf Registration
Statement. See "Exchange Offer; Registration Rights." By its terms, however, the
Trust Agreement will incorporate certain provisions of the Trust Indenture Act,
and, upon consummation of the Exchange Offer or effectiveness of the Shelf
Registration Statement, the Trust Agreement will be subject to and governed by
the Trust Indenture Act. This summary of certain provisions of the Capital
Securities, the Common Securities and the Trust Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Trust Agreement, including the definitions therein of
certain terms.
GENERAL
The Capital Securities (including the Original Capital Securities and the
Exchange Capital Securities) are limited to $50,000,000 aggregate Liquidation
Amount at any one time outstanding. The Capital Securities rank PARI PASSU, and
payments will be made thereon pro rata, with the Common Securities, except as
described under "--Subordination of Common Securities." Legal title to the
Junior Subordinated Debentures is held by the Property Trustee in trust for the
benefit of the holders of the Trust Securities. The Guarantee does not guarantee
payment of Distributions or amounts payable on redemption of the Capital
Securities or liquidation of the Trust when the Trust does not have funds on
hand legally available for such payments. See "Description of Guarantee."
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DISTRIBUTIONS
Distributions on the Capital Securities are cumulative, accumulate from
April 28, 1998 and are payable semi-annually in arrears on May 1 and November 1
of each year, commencing November 1, 1998, at the annual rate of 8.17% of the
Liquidation Amount to the holders of the Capital Securities on the relevant
record dates. The record dates will be the 15th day of the month immediately
preceding the month in which the relevant payment occurs. Holders of the
Exchange Capital Securities as of the applicable record date will be entitled to
receive Distributions payable semi-annually in arrears on May 1 and November 1
of each year, commencing May 1, 1999. Such distributions will accumulate from
the later of the most recent Distribution payment date to which Distributions
have been duly paid or duly provided for with respect to the Exchange Capital
Securities or the Original Capital Securities which were exchanged for such
Exchange Capital Securities, or April 28, 1998, the date of issuance of the
Original Capital Securities. The amount of Distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months and, for
any period of less than a full calendar month, the number of days elapsed in
such month. In the event that any date on which Distributions are payable on the
Capital Securities is not a Business Day (as defined below), payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect to any
such delay), 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, in each case with the same force and effect as if made
on such date (each date on which Distributions are payable in accordance with
the foregoing, a "Distribution Date"). A "Business Day" shall mean any day other
than a Saturday or a Sunday or a day on which banking institutions in the City
of New York are authorized or required by law or executive order to remain
closed.
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 Junior Subordinated Debentures, at any time
or from time to time, for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension Period
shall end on a date other than an Interest Payment Date, or extend beyond the
Stated Maturity Date. Upon any such election, semi-annual Distributions on the
Capital Securities will be deferred by the Trust during such Extension Period.
Distributions to which holders of the Capital Securities are entitled during any
such Extension Period will accumulate additional Distributions thereon at the
rate per annum of 8.17% thereof, compounded semi-annually from the relevant
Distribution Date, but not exceeding the interest rate then accruing on the
Junior 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 such Extension Period to exceed 10 consecutive semi-annual periods, to end
on a date other than an Interest Payment Date or to extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the payment
of all amounts then due on any Interest Payment Date, the Corporation may elect
to begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Corporation must give the Property Trustee, the Administrative Trustees and
the Debenture Trustee notice of its election of any such Extension Period (or an
extension thereof) at least five Business Days prior to the earlier of: (i) the
date the Distributions on the Capital Securities would have been payable except
for the election to begin such Extension Period; and (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or automated quotation system or to holders of such Capital Securities of the
record date or the date such Distributions are payable, but in any event not
less than five Business Days prior to such record date. There is no limitation
on the number of times that the Corporation may elect to begin an Extension
Period. See "Description of Junior Subordinated Debentures--Option to Extend
Interest Payment Date" and "Certain Federal Income Tax Consequences--Interest
Income and Original Issue Discount."
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During any such Extension Period, the Corporation may not: (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock;
(ii) make any payment of principal of or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including any Other
Debentures) that rank PARI PASSU with or junior in right of payment to the
Junior Subordinated Debentures; or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks PARI PASSU with or junior in right of payment to the Junior Subordinated
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common stock of the
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) as a result of the
exchange or conversion of one class or series of the Corporation's capital stock
for another class or series of the Corporation's capital stock, (e) the purchase
of fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged and (f) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's dividend
reinvestment plans). The Corporation has no current intention to exercise its
option to defer payments of interest on the Junior Subordinated Debentures.
The revenue of the Trust available for distribution to holders of the
Capital Securities is limited to payments under the Junior Subordinated
Debentures in which the Trust has invested the proceeds from the issuance and
sale of the Trust Securities. See "Description of Junior Subordinated
Debentures--General." If the Corporation does not make interest payments on the
Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Capital Securities. The payment of
Distributions (if and to the extent the Trust has funds on hand legally
available for the payment of such Distributions) will be guaranteed by the
Corporation on a limited basis as set forth herein under "Description of
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 Junior Subordinated Debentures
(other than following the distribution of the Junior Subordinated Debentures to
the holders of the Trust Securities), the proceeds from such repayment or
prepayment shall be applied by the Property Trustee (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 applicable Redemption Price, which shall be equal to:
(i) in the case of the repayment of the Junior Subordinated Debentures on the
Stated Maturity Date, the Maturity Redemption Price (equal to the principal of,
and accrued and unpaid interest on, the Junior Subordinated Debentures); (ii) in
the case of the optional prepayment of the Junior Subordinated Debentures before
the Initial Optional Redemption Date upon the occurrence and continuation of a
Special Event, the Special Event Redemption Price; and (iii) in the case of the
optional prepayment of the Junior Subordinated Debentures on or after the
Initial Optional Redemption Date, the Optional Redemption Price. See
"Description of Junior Subordinated Debentures--Optional Prepayment" and
"--Special Event Prepayment." If less than all of the Junior Subordinated
Debentures are to be prepaid on a Redemption Date, then the proceeds of such
prepayment shall be allocated pro rata to the Trust Securities.
"Like Amount" means: (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Junior Subordinated Debentures to be paid in accordance with their
terms; and (ii) with respect to a distribution of Junior Subordinated Debentures
upon the liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the
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Liquidation Amount of the Trust Securities of the holder to whom such Junior
Subordinated Debentures are distributed.
The Corporation will have the option to prepay the Junior Subordinated
Debentures: (i) in whole or in part, on or after the Initial Optional Redemption
Date, at the applicable Optional Prepayment Price; and (ii) in whole but not in
part, at any time prior to the Initial Optional Redemption Date, upon the
occurrence of a Special Event, at the Special Event Prepayment Price, in each
case subject to the receipt of any required regulatory approval. See
"Description of Junior Subordinated Debentures--Optional Prepayment" and
"--Special Event Prepayment."
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
The Corporation 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 Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Trust. Such right is
subject to: (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of Capital
Securities; and (ii) receipt of any required regulatory approval.
The Trust shall automatically dissolve upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Junior Subordinated Debentures to
the holders of the Trust Securities, if the Corporation, as Sponsor, has given
written direction to the Property Trustee to dissolve the Trust (which direction
is optional and, except as described above, wholly within the discretion of the
Corporation, as Sponsor); (iii) redemption of all of the Trust Securities as
described under "--Redemption;" (iv) expiration of the term of the Trust; and
(v) the entry of an order for the dissolution of the Trust by a court of
competent jurisdiction.
If a dissolution occurs as described in clause (i), (ii), (iv), or (v)
above, the Trust shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of the Trust as provided by applicable law, to the
holders of the Trust Securities a Like Amount of the Junior Subordinated
Debentures, unless such distribution is determined by the Property Trustee not
to be practicable, in which event such holders will be entitled to receive out
of the assets of the Trust legally available for distribution to holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the aggregate of the Liquidation Amount plus accumulated
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Trust has insufficient assets on hand legally available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Trust Securities shall be paid on a pro rata basis,
except that if a Debenture Event of Default has occurred and is continuing, the
Capital Securities shall have a priority over the Common Securities. See
"--Subordination of Common Securities."
If the Corporation elects not to prepay the Junior Subordinated Debentures
prior to maturity in accordance with their terms and either elects not to or is
unable to liquidate the Trust and distribute the Junior Subordinated Debentures
to holders of the Trust Securities, the Trust Securities will remain outstanding
until the repayment of the Junior Subordinated Debentures on the Stated Maturity
Date.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities: (i) the Trust
Securities will no longer be deemed to be outstanding; (ii) DTC or its nominee
will receive, in respect of each registered global certificate, if any,
representing Trust Securities and held by it, a registered global certificate or
certificates representing the Junior Subordinated Debentures to be delivered
upon such distribution; and (iii) any certificates representing Trust Securities
not held by DTC or its nominee will be deemed to represent Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their agent for
cancellation, whereupon the
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Corporation will issue to such holder, and the Debenture Trustee will
authenticate, a certificate representing such Junior Subordinated Debentures.
There can be no assurance as to the market prices for the Capital Securities
or the Junior Subordinated Debentures that may be distributed in exchange for
the Trust Securities if a dissolution and liquidation of the Trust were to
occur. Accordingly, the Capital Securities that an investor may purchase, or the
Junior Subordinated Debentures that the investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the investor
paid to purchase the Capital Securities offered hereby.
REDEMPTION PROCEDURES
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Junior Subordinated Debentures. Any redemption of Trust
Securities shall be made and the applicable Redemption Price shall be payable on
the Redemption Date only to the extent that the Trust has funds legally
available for the payment of such applicable Redemption Price. See also
"--Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are legally available, with respect to the Capital Securities
held by DTC or its nominees, the Property Trustee will deposit or cause the
Paying Agent (as defined herein) to deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price. See "--Form, Denomination,
Book-Entry Procedures and Transfer." With respect to the Capital Securities held
in certificated form, the Property Trustee, to the extent funds are legally
available, will irrevocably deposit with the paying agent for the Capital
Securities funds sufficient to pay the applicable Redemption Price and will give
such paying agent irrevocable instructions and authority to pay the applicable
Redemption Price to the holders thereof upon surrender of their certificates
evidencing the Capital Securities. See "--Payment and Paying Agency."
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date shall be payable to the holders of such Capital Securities on
the relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit, all rights of the holders of the Capital Securities called
for redemption will cease, except the right of the holders of such Capital
Securities to receive the applicable Redemption Price, but without interest on
such Redemption Price, and such Capital Securities will cease to be outstanding.
In the event that any Redemption Date of Capital Securities is not a Business
Day, then the applicable Redemption Price payable on such date will be paid on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such next
succeeding Business Day falls in the next calendar year, such payment shall be
made on the immediately preceding Business Day. In the event that payment of the
applicable Redemption Price is improperly withheld or refused and not paid
either by the Trust or by the Corporation pursuant to the Guarantee as described
under "Description of Guarantee": (i) Distributions on Capital Securities will
continue to accumulate at the then applicable rate, from the Redemption Date
originally established by the Trust to the date such applicable Redemption Price
is actually paid; and (ii) the actual payment date will be the Redemption Date
for purposes of calculating the applicable Redemption Price.
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, or in the repayment of the Junior 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, United States
federal securities laws), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding Capital Securities by tender, in the
open market or by private agreement.
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SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Trust
Securities, as applicable, shall be made PRO RATA based on the Liquidation
Amount of the Trust Securities; PROVIDED, HOWEVER, that if on any Distribution
Date or Redemption Date a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution on, or applicable Redemption Price
of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of the Common Securities, shall be
made unless payment in full in cash of all accumulated and unpaid Distributions
on all of the outstanding Capital Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the applicable
Redemption Price the full amount of such Redemption Price, shall have been made
or provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or Redemption
Price of, the Capital Securities then due and payable.
In the case of any Event of Default, the Corporation as holder of the Common
Securities will be deemed to have waived any right to act with respect to such
Event of Default until the effect of such Event of Default shall have been
cured, waived or otherwise eliminated. Until any such Event of Default has been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of the Capital Securities and not on behalf of the
Corporation as holder of the Common Securities, and only the holders of the
Capital Securities will have the right to direct the Property Trustee to act on
their behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of a Debenture Event of Default constitutes an "Event of
Default" under the Trust Agreement. See "Description of Junior Subordinated
Debentures--Debenture Events of Default."
Within 10 Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Sponsor, unless such Event of
Default shall have been cured or waived. The Corporation, as Sponsor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as described under
"--Liquidation of the Trust and Distribution of Junior Subordinated Debentures"
and "--Subordination of Common Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any Person
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resulting from any merger, conversion or consolidation to which such Issuer
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Issuer Trustee, shall be the successor of
such Issuer Trustee under the Trust Agreement, provided such Person shall be
otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate or be replaced
by, or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any corporation or other Person, except as
described below or as otherwise described under "--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures." The Trust may, at the request
of the Corporation, as Sponsor, with the consent of the Administrative Trustees
but without the consent of the holders of the Capital Securities, merge with or
into, consolidate, amalgamate or be replaced by or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to a trust
organized as such under the laws of any State; provided, that: (i) such
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Trust Securities or (b) substitutes for the Trust
Securities other securities having substantially the same terms as the Trust
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Trust Securities rank in priority with respect to distributions
and payments upon liquidation, redemption and otherwise; (ii) the Corporation
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee with respect to the Junior Subordinated
Debentures; (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Trust Securities are then
listed or quoted, if any; (iv) if the Capital Securities (including any
Successor Securities) are rated by any nationally recognized statistical rating
organization prior to such transaction, such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) or, if the Junior
Subordinated Debentures are so rated, the Junior Subordinated Debentures, to be
downgraded by any such nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
holders of the Trust Securities (including any Successor Securities) in any
material respect; (vi) such successor entity has a purpose identical to that of
the Trust; (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Corporation has received an opinion from
independent counsel to the Trust experienced in such matters to the effect that
(a) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
holders of the Trust Securities (including any Successor Securities) in any
material respect (other than any dilution of such holders' interests in the new
entity), and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"); and
(viii) the Corporation or any permitted successor or assignee owns all of the
common securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee and the Common Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of holders of 100% in
Liquidation Amount of the Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Trust or the successor entity not to be
classified as a grantor trust for United States federal income tax purposes. In
addition, the Property Trustee will be required pursuant to the Indenture to
exchange, as part of the Exchange Offer, the Junior Subordinated Debentures for
the Exchange Debentures, which will have terms substantially identical to the
Junior Subordinated Debentures. See "Exchange Offer; Registration Rights."
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VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "--Mergers, Consolidations, Amalgamations
or Replacements of the Trust" and "Description of Guarantee--Amendments and
Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Capital Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the Corporation, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities: (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement, which shall not be inconsistent
with the other provisions of the Trust Agreement; (ii) to modify, eliminate or
add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any Trust Securities
are outstanding or to ensure that the Trust will not be required to register as
an "investment company" under the Investment Company Act; or (iii) to modify,
eliminate or add any provisions of the Trust Agreement to such extent as shall
be necessary to enable the Trust or the Corporation to conduct an Exchange Offer
in the manner contemplated by the Registration Rights Agreement; PROVIDED,
HOWEVER, that in the case of clauses (i) and (iii) such action shall not
adversely affect in any material respect the interests of the holders of the
Trust Securities. Any amendments of the Trust Agreement pursuant to the
foregoing shall become effective when notice thereof is given to the holders of
the Trust Securities. The Trust Agreement may be amended by the Issuer Trustees
and the Corporation: (i) with the consent of holders representing a majority
(based upon Liquidation Amount) of the outstanding Trust Securities; and (ii)
upon receipt by the Issuer Trustees of an opinion of counsel experienced in such
matters to the effect that such amendment or the exercise of any power granted
to the Issuer Trustees in accordance with such amendment will not affect the
Trust's status as a grantor trust for United States federal income tax purposes
or the Trust's exemption from status as an "investment company" under the
Investment Company Act, provided that, without the consent of each holder of
Trust Securities, the Trust Agreement may not be amended to: (i) change the
amount or timing of any Distribution on the Trust Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of the Trust Securities as of a specified date; or (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not: (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
execute any trust or power conferred on the Debenture Trustee with respect to
the Junior Subordinated Debentures; (ii) waive certain past defaults under the
Indenture; (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Junior Subordinated
Debentures; or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in Liquidation Amount of all outstanding Capital Securities;
PROVIDED, HOWEVER, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each holder of the Capital Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Capital Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States federal
income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any
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meeting at which holders of Capital Securities are entitled to vote to be given
to each holder of record of Capital Securities in the manner set forth in the
Trust Agreement.
No vote or consent of the holders of Capital Securities will be required for
the Trust to redeem and cancel the Capital Securities in accordance with the
Trust Agreement.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustee, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
Exchange Capital Securities may be represented by one or more Capital
Securities in registered, global form (collectively, the "Global Capital
Securities"). The Global Capital Securities will be deposited upon issuance with
the Property Trustee as custodian for DTC, in New York, New York, and registered
in the name of DTC or its nominee, in each case for credit to an account of a
direct or indirect participant in DTC as described below.
In the event that Exchange Capital Securities are issued in certificated
form, the Exchange Capital Securities will be in blocks having a Liquidation
Amount of not less than $100,000 (100 Capital Securities), or any integral
multiple of $1,000 Liquidation Amount (one Capital Security) in excess thereof,
and may be transferred or exchanged in such blocks in the manner described
herein.
Except as set forth below, the Global Capital Securities may be transferred,
in whole and not in part, only to another nominee of DTC or to a successor of
DTC or its nominee. Beneficial interests in the Global Capital Securities may
not be exchanged for Capital Securities in certificated form except in the
limited circumstances described below. See "--Exchange of Book Entry Capital
Securities for Certified Capital Securities."
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 Initial Purchasers), 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 has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants designated by the Initial
Purchasers with portions of the Liquidation Amount of the Global Capital
Securities and (ii) ownership of such interests in the Global Capital Securities
will be shown on, and the transfer of ownership thereof will be effected only
through, records maintained by DTC (with respect to the
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Participants) or by the Participants and the Indirect Participants (with respect
to other owners of beneficial interests in the Global Capital Securities).
Investors in the Global Capital Securities may hold their interests therein
directly through DTC if they are Participants, 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 Capital Securities for Certificated Capital Securities" and
"--Exchange of Certificated Capital Securities for Book-Entry Capital
Securities."
Except as described below, owners of interests in the Global Capital
Securities will not have Capital Securities registered in their name, will not
receive physical delivery of Capital Securities in certificated form and will
not be considered the registered owners or holders thereof under the Trust
Agreement for any purpose.
Payments in respect of the Global Capital Security registered in the name of
DTC, or its nominee, will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms of
the Trust Agreement, the Property Trustee will treat the persons in whose names
the Capital Securities, including the Global Capital Securities, are registered
as the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, neither the Property Trustee nor
any agent thereof has or will have any responsibility or liability for: (i) any
aspect of DTC's records or any Participant's or Indirect Participant's records
relating to or payments made on account of beneficial ownership interests in the
Global Capital Securities, or for maintaining, supervising or reviewing any of
DTC's records or any Participant's or Indirect Participant's records relating to
the beneficial ownership interests in the Global Capital Securities; or (ii) any
other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised the Trust and the
Corporation that its current practice, upon receipt of any payment in respect of
securities such as the Capital Securities, is to credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in Liquidation Amount of beneficial
interests in the relevant security as shown on the records of DTC unless DTC has
reason to believe it will not receive payment on such payment date. Payments by
the Participants and the Indirect Participants to the beneficial owners of
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 in
identifying the beneficial owners of the Capital Securities, and the Trust or
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.
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 Capital Securities (including, without
limitation, the presentation of Capital Securities for exchange as described
below) only at the direction of one or more Participants to whose account with
DTC
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interests in the Global Capital Securities are credited and only in respect of
such portion of the Liquidation Amount of the Capital Securities as to which
such Participant or Participants has or have given such direction. However, if
there is an Event of Default under the Trust Agreement, DTC reserves the right
to exchange the Global Capital Securities for legended Capital Securities in
certificated form and to distribute such 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 interest 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 for the
performance by DTC or its Participants or Indirect Participants of its
obligations under the rules and procedures governing its operations.
EXCHANGE OF BOOK-ENTRY CAPITAL SECURITIES FOR CERTIFICATED CAPITAL SECURITIES
A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if: (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary within 90 days
or (y) has ceased to be a clearing agency registered under the Exchange Act and
the Trust thereupon fails to appoint a successor Depositary within 90 days; (ii)
the Corporation in its sole discretion elects to cause the issuance of the
Capital Securities in certificated form; or (iii) there shall have occurred and
be continuing an Event of Default or any event which after notice or lapse of
time or both would be an Event of Default under the Trust Agreement. In
addition, beneficial interests in a Global Capital Security may be exchanged by
or on behalf of DTC for certificated 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 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) and will bear the restrictive legend referred to in
"Notice to Investors," unless the Property Trustee determines otherwise in
compliance with applicable law.
EXCHANGE OF CERTIFICATED CAPITAL SECURITIES FOR BOOK-ENTRY CAPITAL SECURITIES
Certificated Capital Securities, which will be issued in certificated form,
may not be exchanged for beneficial interests in any Global Capital Security,
unless such exchange occurs in connection with a transfer of such Other Capital
Securities and the transferor first delivers to the Property Trustee a written
certificate (in the form provided in the Trust Agreement) to the effect that
such transfer will comply with the appropriate transfer restrictions applicable
to such Capital Securities.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities held in global form shall be
made to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates, or in respect of the Capital
Securities that are not held by the Depositary, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address shall
appear on the register. The paying agent (the "Paying Agent") shall initially be
the Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the 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
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Paying Agent, the Administrative Trustees shall appoint a successor (which shall
be a bank or trust company acceptable to the Administrative Trustees and the
Corporation) to act as Paying Agent.
RESTRICTIONS ON TRANSFER
The Capital Securities will be issued, and may be transferred, only in
blocks having a Liquidation Amount of not less than $100,000 (100 Capital
Securities) and multiples of $1,000 in excess thereof. Any attempted sale,
transfer or other disposition of Capital Securities in a block having a
Liquidation Amount of less than $100,000 shall be deemed to be void and of no
legal effect whatsoever. Any such purported transferee shall be deemed not to be
the holder of such Capital Securities for any purpose, including but not limited
to the receipt of Distributions on such Capital Securities, and such purported
transferee shall be deemed to have no interest whatsoever in such Capital
Securities.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Capital Securities.
Registration of transfers of the Capital Securities will be effected without
charge by or on behalf of the Trust, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Trust will not be required to register or cause to be registered
the transfer of the Capital Securities after they have been called for
redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of an
Event of Default, will undertake to perform only such duties as are specifically
set forth in the Trust Agreement and, during the existence of an Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any holder of Trust
Securities, unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no Event of Default
has occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the Trust
Agreement or is unsure of the application of any provision of the Trust
Agreement, and the matter is not one on which holders of the Capital Securities
or the Common Securities are entitled under the Trust Agreement to vote, then
the Property Trustee shall take such action as is directed by the Corporation
and, if not so directed, shall take such action as it deems advisable and in the
best interests of the holders of the Trust Securities and will have no
liability, except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that: (i) the Trust will not
be deemed to be an "investment company" required to be registered under the
Investment Company Act; (ii) the Trust will be classified as a grantor trust for
United States federal income tax purposes; and (iii) the Junior Subordinated
Debentures will be treated as indebtedness of the Corporation for United States
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 (i) holders of the Trust Securities have
no preemptive or similar rights to subscribe for any additional Trust Securities
and (ii) 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 JUNIOR SUBORDINATED DEBENTURES
The Original Junior Subordinated Debentures were issued and the Exchange
Junior Subordinated Debentures are to be issued under an Indenture, as
supplemented from time to time (as so supplemented, the "Indenture"), between
the Corporation and The Bank of New York, as trustee (the "Debenture Trustee").
The Indenture will be qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). The Indenture will incorporate certain
provisions of the Trust Indenture Act, and will be subject to and governed by
the Trust Indenture Act. This summary of certain terms and provisions of the
Junior Subordinated Debentures and the Indenture does not purport to be
complete, and where reference is made to particular provisions of the Indenture,
such provisions, including the definitions of certain terms, some of which are
not otherwise defined herein, are qualified in their entirety by reference to
all of the provisions of the Indenture and those terms made a part of the
Indenture by the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Original Capital Securities, the Trust
invested the proceeds thereof, together with the consideration paid by the
Corporation for the Common Securities, in Original Junior Subordinated
Debentures issued by the Corporation. Pursuant to the Exchange Offer, the
Corporation will exchange the Exchange Junior Subordinated Debentures in an
amount corresponding to the Original Junior Subordinated debentures accepted for
exchange, for a like amount of Original Junior Subordinated Debentures as soon
as practicable after the date hereof. Holders of Exchange Junior Subordinated
Degentures as of the appliable record date will be entitled to receive
Distributions payable semi-annually in arrears on May 1 and November 1 of each
year, commencing May 1, 1999. Such Distributions will accumulate from the later
of the most recent Distribution payment date to which Distributions have been
duly paid or duly provided for with respect to the Exchange Junior Subordinated
Debentures or the Original Junior Subordinated Debentures which were exchanged
for such Exchange Junior Subordinated Debentures, or from April, 1998, the date
of original issuance of the Original Junior Subordinated Debentures. The record
dates will be the 15th day of the month immediately preceding the month in which
the relevant payment occurs. It is anticipated that, until the liquidation, if
any, of the Trust, the Junior Subordinated Debentures will be held in the name
of the Property Trustee in trust for the benefit of the holders of the Trust
Securities. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and, for any period of less
than a full calendar month, the number of days elapsed in such month. In the
event that any date on which interest is payable on the Junior Subordinated
Debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), except that if such
next succeeding Business Day falls in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. Accrued interest
that is not paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at the rate per
annum of 8.17% thereof, compounded semi-annually. The term "interest," as used
herein, shall include semi-annual interest payments, interest on semi-annual
interest payments not paid on the applicable Interest Payment Date and
Additional Sums (as defined below), as applicable.
The Junior Subordinated Debentures will be issued in denominations of
$100,000 and multiples of $1,000 in excess thereof. The Junior Subordinated
Debentures will mature on May 1, 2028 (the "Stated Maturity Date").
The Exchange Junior Subordinated Debentures will rank PARI PASSU with the
Original Junior Subordinated Debentures and all Other Debentures, 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."
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<PAGE>
The Corporation is a savings and loan holding company regulated by the OTS
and almost all of the operating assets of the Corporation are owned by the
Corporation's subsidiaries. The Corporation is a legal entity separate and
distinct from its subsidiaries. Holders of Junior Subordinated Debentures should
look only to the Corporation for payments on the Junior Subordinated Debentures.
The principal sources of the Corporation's income are dividends, interest and
fees from its subsidiaries. The Corporation relies primarily on dividends from
the Bank to meet its obligations for payment of principal and interest on its
outstanding debt obligations and corporate expenses. There are regulatory
limitations, discussed in more detail below, on the payment of dividends
directly or indirectly to the Corporation from the Bank. In addition to
restrictions on the payment of dividends, the Bank is subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, the Corporation and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from the Bank unless the
loans are secured by various types of collateral. 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.
OTS regulations impose limitations upon all capital distributions by a
savings institution, such as cash dividends. Such regulations establish three
tiers of institutions, which are based primarily on an institution's capital
level. An institution that exceeds all fully phased-in regulatory capital
requirements before and after a proposed capital distribution ("Tier 1
Institution") and has not been advised by the OTS that it is in need of more
than normal supervision, could, after prior notice to, but without the approval
of the OTS, make capital distributions during a calendar year equal to the
greater of: (i) 100% of its net earnings to date during the calendar year plus
the amount that would reduce by one-half its "surplus capital ratio" (the excess
capital over its fully phased-in capital requirements) at the beginning of the
calendar year; or (ii) 75% of its net earnings for the previous four quarters.
Any additional capital distributions would require prior OTS approval. In the
event the Bank's capital fell below its capital requirements or the OTS notified
it that it was in need of more than normal supervision, the Bank's ability to
make capital distributions could be restricted. In addition, the OTS could
prohibit a proposed capital distribution by any institution, which would
otherwise be permitted by the regulation, if the OTS determines that such
distribution would constitute an unsafe or unsound practice. During the fiscal
year ended June 30, 1998, the Bank paid $ million in dividends to the
Corporation, which reflected the total amount of dividends the Bank was
permitted to pay as of June 30, 1998 under existing supervisory practices. The
OTS has proposed amendment to its capital distribution regulations. If adopted
as proposed, a savings association subsidiary of a savings and loan holding
company, such as the Bank, will continue to have to file a notice with the OTS
with respect to each capital distribution that it proposes to make, unless the
specific capital distribution requires an application. Under the proposed
amendments, an application would be required if the total amount of all capital
distributions (including the proposed capital distribution) for the applicable
calendar year exceeds net income for that year to date plus the retained net
income for the preceding two years. If this proposed rule had been in effect at
June 30, 1998 , the Bank could have paid dividends of $ million without
obtaining prior regulatory approval. 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.
Under the FDIA, insured depository institutions such as the Bank are
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.
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In addition to limitations on dividends, the Bank is limited in the amount
of loans and other extensions of credit that may be extended to the Corporation,
and any such loans or extensions of credit are subject to collateral security
requirements. Generally, up to 10% of the Bank's regulatory capital, surplus,
undivided profits, allowance for loan losses and contingency reserves may be
loaned to the Corporation. There are other restrictions applicable to the
transactions between the Bank and the Corporation. As of June 30, 1998, this
limitation was approximately $ .
Because the Corporation is a holding company, the right of the Corporation
to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Capital Securities to benefit indirectly from such distribution),
is subject to the prior claims of creditors of that subsidiary (including
depositors, in the case of the Bank), except to the extent the Corporation may
itself be recognized as a creditor of that subsidiary. Accordingly, the Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries At June 30, 1998 the
subsidiaries of the Corporation had total liabilities, excluding liabilities
owed to the Corporation, of $ , including the subsidiaries' deposit
liabilities, and all liabilities of any future subsidiaries of the Corporation.
The Indenture does not limit the incurrence or issuance of other secured or
unsecured debt of the Corporation or any subsidiary, including Senior
Indebtedness. See "--Subordination."
FORM, REGISTRATION AND TRANSFER
If the Junior Subordinated Debentures are distributed to the holders of the
Trust Securities, the Junior Subordinated Debentures may be represented by one
or more global certificates registered in the name of Cede & Corporation., as
the nominee of DTC. The depositary arrangements for such Junior Subordinated
Debentures are expected to be substantially similar to those in effect for the
Capital Securities. For a description of DTC and the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other notices and other matters, see "Description of Capital Securities--Form,
Denomination, Book-Entry Procedures and Transfer."
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and interest on the Junior
Subordinated Debentures will be made at the office of the Debenture Trustee in
the City of New York or at the office of such Paying Agent or Paying Agents as
the Corporation may designate from time to time, except that at the option of
the Corporation payment of any interest may be made, except in the case of
Junior Subordinated Debentures in global form: (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
register for Junior Subordinated Debentures; or (ii) by transfer to an account
maintained by the Person entitled thereto as specified in such register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Junior Subordinated Debenture will
be made to the Person in whose name such Junior Subordinated Debenture is
registered at the close of business on the Record Date for such interest, except
in the case of defaulted interest. The Corporation may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent; however
the Corporation will at all times be required to maintain a Paying Agent in each
place of payment for the Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Corporation, be repaid
to the Corporation and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment thereof.
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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 Junior Subordinated Debentures, at any time and from time to
time, for a period not exceeding 10 consecutive semi-annual periods with respect
to each Extension Period, provided that no Extension Period shall end on a date
other than an Interest Payment Date or extend beyond the Stated Maturity Date.
At the end of such Extension Period, the Corporation must pay all interest then
accrued and unpaid (together with interest thereon at the annual rate of 8.17%,
compounded semi-annually, to the extent permitted by applicable law). During an
Extension Period, interest will continue to accrue and, if the Junior
Subordinated Debentures have been distributed to holders of the Trust
Securities, holders of Junior Subordinated Debentures (or holders of the Trust
Securities while Trust Securities are outstanding) will be required to accrue
such deferred interest income for United States federal income tax purposes
prior to the receipt of cash attributable to such income. See "Certain Federal
Income Tax Consequences--Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation may not: (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock;
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including any Other
Debentures) that rank PARI PASSU with or junior in right of payment to the
Junior Subordinated Debentures; or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including any Other Guarantees) if such guarantee
ranks PARI PASSU with or junior in right of payment to the Junior Subordinated
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common stock of the
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock, (e) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged and (f) purchases of common stock 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 Junior
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 Period to exceed 10 consecutive semi-annual periods, end on
a date other than an Interest Payment Date or extend beyond the Stated Maturity
Date. Upon the termination of any such Extension Period and the payment of all
amounts then due, 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: (i) the date the
Distributions on the Trust Securities would have been payable except for the
election to begin or extend such Extension Period; or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or to holders of Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date. The Debenture Trustee shall give notice of the
Corporation's election to begin or extend a new Extension Period to the holders
of the Capital Securities. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period.
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OPTIONAL PREPAYMENT
The Junior Subordinated Debentures will be prepayable, in whole or in part,
at the option of the Corporation on or after the Initial Optional Redemption
Date, subject to the Corporation having received any required regulatory
approval, at a price (the "Optional Prepayment Price") equal to the percentage
of the outstanding principal amount of the Junior Subordinated Debentures
specified below, plus, in each case, accrued and unpaid interest thereon to the
date of prepayment if prepaid during the 12-month period beginning May 1 of the
years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---------------------------------------------------------------------------------- -----------
<S> <C>
2008.............................................................................. 104.085%
2009.............................................................................. 103.677%
2010.............................................................................. 103.268%
2011.............................................................................. 102.860%
2012.............................................................................. 102.451%
2013.............................................................................. 102.043%
2014.............................................................................. 101.634%
2015.............................................................................. 101.226%
2016.............................................................................. 100.817%
2017.............................................................................. 100.409%
2018 and thereafter............................................................... 100.000%
</TABLE>
SPECIAL EVENT PREPAYMENT
Prior to the Initial Optional Redemption Date, 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 Junior Subordinated
Debentures, in whole but not in part, at any time within 60 days of the
occurrence of such Special Event, at a prepayment price (the "Special Event
Prepayment Price") equal to the Make-Whole Amount. The "Make-Whole Amount" shall
be an amount equal to the greater of (x) 100% of the principal amount of the
Junior Subordinated Debentures or (y) the sum, as determined by a Quotation
Agent, of the present values of the remaining scheduled payments of principal
and interest on the Junior Subordinated Debentures from the prepayment date to
the Stated Maturity Date, discounted to the prepayment date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate, plus, in the case of each of clauses (x) and (y),
accrued and unpaid interest thereon, to the date of prepayment. If, following
the occurrence of a Special Event, the Corporation exercises its option to
prepay the Junior Subordinated Debentures, then the proceeds of that prepayment
must be applied to redeem a Like Amount of Trust Securities at the Special Event
Redemption Price. See "Description of Capital Securities--Redemption."
A "Special Event" means a Tax Event or a Regulatory Capital Event, as the
case may be.
A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of original
issuance of the Trust 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 Junior Subordinated Debentures; (ii) interest payable by the Corporation
on the Junior Subordinated Debentures is not, or within 90 days of the date of
such opinion will not be, deductible by the Corporation, in whole or in part,
for United States federal income tax purposes; or
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(iii) the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a DE MINIMIS amount of other taxes, duties or other
governmental charges.
A "Regulatory Capital Event" means 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 (i) 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 (ii) 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 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), applied as if the Corporation (or its successors) were a bank
holding company for purposes of the capital adequacy guidelines of the Federal
Reserve Board (or any successor regulatory authority with jurisdiction over bank
holding companies), or any capital adequacy guidelines as then in effect and
applicable to the Corporation; PROVIDED, HOWEVER, that the distribution of the
Junior Subordinated Debentures in connection with the liquidation of the Trust
by the Corporation shall not in and of itself constitute a Regulatory Capital
Event, unless such liquidation shall have occurred in connection with a Tax
Event.
"Adjusted Treasury Rate" means, with respect to a prepayment date, the rate
per annum equal to (i) the yield, under the heading which represents the average
for the immediately prior week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Remaining Life, as defined below (if no
maturity is within three months before or three months after the maturity
corresponding to the Remaining Life, yields for the two published maturities
most closely corresponding to the Remaining Life shall be determined, and the
Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month), or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity to the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date, in each case calculated on the third Business Day
preceding the prepayment date, plus in each case (a) 2.15% if such prepayment
occurs on or prior to April 28, 1999 and (b) 1.60% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life of the Junior Subordinated Debentures that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after the Remaining Life, the
two most closely corresponding United States Treasury securities, as selected by
the Quotation Agent, shall be used as the Comparable Treasury Issue, and the
Treasury Rate shall be interpolated or extrapolated on a straight-line basis,
rounding to the nearest month, using such securities.
"Comparable Treasury Price" means, with respect to a prepayment date: (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities"; or (ii) if such release (or any successor release) is
not published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such prepayment date,
after excluding the highest and lowest
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such Reference Treasury Dealer Quotations, or (B) if the Debenture Trustee
obtains fewer than three such Reference Treasury Dealer Quotations, the average
of all such Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Corporation. "Reference Treasury Dealer" means a nationally recognized U.S.
Government securities dealer in New York City selected by the Corporation.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and the prepayment date, the average, as determined by the
Debenture Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such prepayment date.
"Remaining Life" means the term of the Junior Subordinated Debentures from
the prepayment date to the stated Maturity Date.
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 Junior 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 Junior Subordinated Debentures called for
prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debentures such amounts as 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 also covenant that it will not: (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock;
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including any Other
Debentures) that rank PARI PASSU with or junior in right of payment to the
Junior Subordinated Debentures; or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including any Other Guarantees) if such guarantee
ranks PARI PASSU with or junior in right of payment to the Junior Subordinated
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common stock of the
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock, (e) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, and (f) purchases of common stock 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: (A) there shall
have occurred any event of which the Corporation has actual knowledge that (1)
is, or with the giving of notice or the lapse of time, or both, would be, a
Debenture Event of Default and (2) in respect of which the Corporation shall not
have taken reasonable steps to cure; (B) the Corporation shall be in default
with respect to its payment of any obligations under the Guarantee; or (C) the
Corporation shall have given notice of its election to exercise its right to
commence an Extension Period as provided in
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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: (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities, PROVIDED, HOWEVER, that any permitted
successor of the Corporation under the Indenture may succeed to the
Corporation's ownership of such Common Securities; (ii) to use commercially
reasonable efforts to cause the Trust (a) to remain a business trust, except in
connection with the distribution of Junior Subordinated Debentures to the
holders of Trust Securities in liquidation of the Trust, the redemption of all
of the Trust Securities, or certain mergers, consolidations or amalgamations,
each as permitted by the Trust Agreement, and (b) to otherwise continue to be
classified as a grantor trust and not an association taxable as a corporation
for United States federal income tax purposes; (iii) to use commercially
reasonable efforts to cause each holder of Trust Securities to be treated as
owning an undivided beneficial interest in the Junior Subordinated Debentures;
and (iv) to not cause, as sponsor of the Trust, or permit, as holder of the
Common Securities, the dissolution, winding up or termination 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 Junior Subordinated Debentures, amend the Indenture
for specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies or enabling the Corporation and the Trust to conduct
an Exchange Offer as contemplated by the Registration Rights Agreement, provided
that any such action does not materially adversely affect the interest of the
holders of Junior Subordinated Debentures, and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of a majority in aggregate principal amount of Junior
Subordinated Debentures, to modify the Indenture in a manner affecting the
rights of the holders of Junior Subordinated Debentures; provided that no such
modification may, without the consent of the holders of each outstanding Junior
Subordinated Debenture so affected, (i) change the Stated Maturity Date, or
reduce the principal amount of the Junior Subordinated Debentures or reduce the
amount payable on redemption thereof or reduce the rate or extend the time of
payment of interest thereon except pursuant to the Corporation's right under the
Indenture to defer the payment of interest as provided therein (see "--Option to
Extend Interest Payment Date") or make the principal of, or interest or premium
on, the Junior Subordinated Debentures payable in any coin or currency other
than that provided in the Junior Subordinated Debentures, or impair or affect
the right of any holder of Junior Subordinated Debentures to institute suit for
the payment thereof, or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures, the holders of which are required to consent to any
such modification of the Indenture.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debentures constitutes a
"Debenture Event of Default" (whatever the reason for such Debenture Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) failure for 30 days to pay any interest (including Compounded
Interest and Additional Sums, if any), on the Junior Subordinated Debentures
or any Other Debentures when due (subject to the deferral of any due date in
the case of an Extension Period with respect to the Junior Subordinated
Debentures or Other Debentures as the case may be); or
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(ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debentures or any Other Debentures when due whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise; or
(iii) failure to observe or perform 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 Junior
Subordinated Debentures; or
(iv) certain events related to bankruptcy, insolvency or reorganization
of the Corporation.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures have, subject to certain exceptions, the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee. The Debenture Trustee or the holders of not
less than 25% in aggregate outstanding principal amount of the Junior
Subordinated Debentures may declare the principal due and payable immediately
upon a Debenture Event of Default. The holders of a majority in aggregate
outstanding principal amount of the Junior Subordinated Debentures may annul
such declaration and waive the default if the default (other than the
non-payment of the principal of the Junior Subordinated Debentures which has
become due solely by such acceleration) has been cured and a sum sufficient to
pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders of
all the Junior Subordinated Debentures, waive any past default, except a default
in the payment of principal (or premium, if any) or interest (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest (and premium, if any) and principal due otherwise than by acceleration
has been deposited with the Debenture Trustee) or a default in respect of a
covenant or provision which under the Indenture cannot be modified or amended
without the consent of the holder of each outstanding Junior Subordinated
Debenture.
The Indenture requires the annual filing by the Corporation with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the Indenture.
The Indenture provides that the Debenture Trustee may withhold notice of a
Debenture Event of Default from the holders of the Junior Subordinated
Debentures if the Debenture Trustee considers it in the interest of such holders
to do so.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default shall have occurred and be continuing and
shall be attributable to the failure of the Corporation to pay the principal of
(or premium, if any), or interest (including Compounded Interest and Additional
Sums, if any), on the Junior Subordinated Debentures on the due date, a holder
of Capital Securities may institute a Direct Action. The Corporation may not
amend the Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of the holders of all of the Capital
Securities. Notwithstanding any payments made to a holder of Capital Securities
by the Corporation in connection with a Direct Action, the Corporation shall
remain obligated to pay the principal of (or premium, if any) or interest
(including Compounded Interest and Additional Sums, if any), on the Junior
Subordinated Debentures, and the Corporation shall be subrogated to the rights
of the holder of such Capital Securities with respect to payments on the Capital
Securities to the extent of any payments made by the Corporation to such holder
in any Direct Action.
The holders of the Capital Securities will not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the Junior Subordinated Debentures, unless there shall have
been an Event of Default under the Trust Agreement. See "Description of Capital
Securities--Events of Default; Notice."
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CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties as an
entirety or substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease its
properties as an entirety or substantially as an entirety to the Corporation,
unless: (i) in case the Corporation consolidates with or merges into another
Person or conveys or transfers its properties as an entirety or substantially as
an entirety to any Person, the successor Person is organized under the laws of
the United States or any State or the District of Columbia, and such successor
Person expressly assumes the Corporation's obligations under the Indenture with
respect to the Junior Subordinated Debentures; (ii) immediately after giving
effect thereto, no Debenture Event of Default, and no event which, after notice
or lapse of time or both, would become a Debenture Event of Default, shall have
occurred and be continuing; and (iii) certain other conditions as prescribed in
the Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Corporation that may adversely affect holders of the
Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at maturity or called for redemption within one year, and the Corporation
deposits or causes to be deposited with the Debenture Trustee funds, in trust,
for the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation, for the principal (and premium, if any)
and interest (including Compounded Interest and Additional Sums, if any), to the
date of the redemption or to the Stated Maturity Date, as the case may be, then
the Indenture will cease to be of further effect (except as to the Corporation's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Corporation will be deemed to have satisfied and discharged the Indenture.
SUBORDINATION
In the Indenture, the Corporation has covenanted and agreed that any Junior
Subordinated Debentures issued thereunder will be subordinate and junior in
right of payment to all Senior Indebtedness to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, all Senior Indebtedness must be paid
in full before the holders of Junior Subordinated Debentures will be entitled to
receive or retain any payment in respect thereof.
In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of such
Senior Indebtedness before the holders of Junior Subordinated Debentures will be
entitled to receive or retain any payment in respect of the Junior Subordinated
Debentures.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Junior Subordinated Debentures may be made if there shall
have occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to any Senior Indebtedness
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
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"Indebtedness" shall mean: (i) every obligation of the Corporation for money
borrowed; (ii) every obligation of the Corporation evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses; (iii)
every reimbursement obligation of the Corporation with respect to letters of
credit, banker's acceptances or similar facilities issued for the account of the
Corporation; (iv) every obligation of the Corporation issued or assumed as the
deferred purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business); (v)
every capital lease obligation of the Corporation; (vi) all indebtedness of the
Corporation whether incurred on or prior to the date of the Indenture or
thereafter incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts, options
and swaps and similar arrangements; and (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, the Corporation has
guaranteed or is responsible or liable for, directly or indirectly, as obligor
or otherwise.
"Indebtedness Ranking on a Parity with the Junior Subordinated Debentures"
shall mean (i) Indebtedness, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, to the extent such
Indebtedness by its terms ranks equally with and not prior to the Junior
Subordinated Debentures in the right of payment upon the happening of the
dissolution or winding-up or liquidation or reorganization of the Corporation
and (ii) all other debt securities, and guarantees in respect of those debt
securities, issued to any 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 Guarantee. The securing of any
Indebtedness, otherwise constituting Indebtedness Ranking on a Parity with the
Junior Subordinated Debentures, shall not be deemed to prevent such Indebtedness
from constituting Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures.
"Indebtedness Ranking Junior to the Junior 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
Junior Subordinated Debentures (and any other Indebtedness Ranking on a Parity
with the Junior Subordinated Debentures) in right of payment upon the happening
of the dissolution or winding-up or liquidation or reorganization of the
Corporation. The securing of any Indebtedness, otherwise constituting
Indebtedness Ranking Junior to the Junior Subordinated Debentures, shall not be
deemed to prevent such Indebtedness from constituting Indebtedness Ranking
Junior to the Junior Subordinated Debentures.
"Senior Indebtedness" shall mean all Indebtedness, whether outstanding on
the date of execution of the Indenture or thereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures or Indebtedness Ranking Junior to the Junior Subordinated Debentures,
and any deferrals, renewals or extensions of such Senior Indebtedness.
The Corporation is a holding company and almost all of the operating assets
of the Corporation are owned by the Corporation's subsidiaries. The Corporation
relies primarily on dividends from the Bank to meet its obligations for payment
of principal and interest on its outstanding debt obligations and corporate
expenses. The Corporation is a legal entity separate and distinct from its
subsidiaries. Holders of Junior Subordinated Debentures should look only to the
Corporation for payments on the Junior Subordinated Debentures. There are
regulatory limitations on the payment of dividends directly or indirectly to the
Corporation from the Bank. See "--General." In addition, the Bank is subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Corporation and certain other affiliates,
and on investments in stock or other securities thereof. Such restrictions
prevent the Corporation and such other affiliates from borrowing from the Bank
unless the loans are secured by various types of collateral. Further, such
secured loans, other transactions and investments by
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the Bank are generally limited in amount as to the Corporation and as to each of
such other affiliates to 10% of the Bank's capital and surplus and as to the
Corporation and all of such other affiliates to an aggregate of 20% of the
Bank's capital and surplus. Accordingly, the Junior Subordinated Debentures will
be effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries.
Because the Corporation is a holding company, the right of the Corporation
to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Capital Securities to benefit indirectly from such distribution),
is subject to the prior claims of creditors of that subsidiary (including
depositors, in the case of the Bank), except to the extent the Corporation may
itself be recognized as a creditor of that subsidiary. Accordingly, the Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries. At June 30, 1998, the
subsidiaries of the Corporation had total liabilities, excluding liabilities
owed to the Corporation, of $2.2 billion, including the subsidiaries' deposit
liabilities, and all liabilities of any future subsidiaries of the Corporation.
The Indenture does not limit the incurrence or issuance of other secured or
unsecured debt of the Corporation or any subsidiary, including Senior
Indebtedness.
RESTRICTIONS ON TRANSFER
The Original Junior Subordinated Debentures were issued and the Exchange
Junior Subordinated Debentures will be issued and may be transferred only in
blocks having an aggregate principal amount of not less than $100,000 (100
Junior Subordinated Debentures) and multiples of $1,000 in excess thereof. Any
attempted transfer of Junior Subordinated Debentures in a block having an
aggregate principal amount of less than $100,000 shall be deemed to be void and
of no legal effect whatsoever. Any such purported transferee shall be deemed not
to be the holder of such Junior Subordinated Debentures for any purpose,
including but not limited to the receipt of payments on such Junior Subordinated
Debentures, and such purported transferee shall be deemed to have no interest
whatsoever in such Junior Subordinated Debentures.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
Following the Exchange Offer and the qualification of the Indenture under
the Trust Indenture Act, the Debenture Trustee shall have and be subject to all
the duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee
is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Junior Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Debenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties under the Indenture.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of New York.
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DESCRIPTION OF GUARANTEE
The Original Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Original Capital Securities
for the benefit of the holders from time to time of the Original Capital
Securities. The Exchange Guarantee will be executed and delivered by the
Corporation concurrently with the issuance of the Exchange Capital Securities by
the Trust for the benefit of the holders from time to time of the Exchange
Capital Securities. The terms of the Exchange Guarantee are identical in all
material respects to the Original Guarantee. As soon as practicable after the
date hereof, the Exchange Guarantee will be exchanged by the Corporation for the
Original Guarantee for the benefit of the holders from time to time of the
Exchange Capital Securities. The Bank of New York will act as Guarantee Trustee
under the Guarantee. The Guarantee will be qualified under the Trust Indenture
Act. This summary of certain provisions of the Exchange Guarantee and the
Original Guarantee does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of the
Guarantee, including the definitions therein of certain terms, and the Trust
Indenture Act. The Guarantee Trustee will hold the Guarantee for the benefit of
the holders of the Capital Securities.
GENERAL
The Corporation has irrevocably agreed, with respect to the Original
Guarantee, and will irrevocably agree, with respect to the Exchange Guarantee,
to pay in full on a subordinated basis, to the extent set forth herein, the
Guarantee Payments (as defined below) to the holders of the Capital Securities,
as and when due, regardless of any defense, right of set-off or counterclaim
that the Trust may have or assert other than the defense of payment. The
following payments with respect to the Capital Securities, to the extent not
paid by or on behalf of the Trust (the "Guarantee Payments"), will be subject to
the Guarantee: (i) any accumulated and unpaid Distributions required to be paid
on the Capital Securities, to the extent that the Trust has funds on hand
legally available therefor at such time; (ii) the applicable Redemption Price
with respect to the Capital Securities called for redemption, to the extent that
the Trust has funds on hand legally available therefor at such time; and (iii)
upon a voluntary or involuntary dissolution, winding-up or liquidation of the
Trust (other than in connection with the distribution of the Junior Subordinated
Debentures to holders of the Capital Securities or the redemption of all Capital
Securities), the lesser of (a) the Liquidation Distribution, to the extent the
Trust has funds legally available therefor at the time, and (b) the amount of
assets of the Trust remaining available for distribution to holders of Capital
Securities after satisfaction of liabilities to creditors of the Trust as
required by applicable law. The Corporation's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Corporation to the holders of the Capital Securities or by causing the Trust to
pay such amounts to such holders.
The Original Guarantee is an irrevocable guarantee, with respect to the
Original Capital Securities, and the Exchange Guarantee will be an irrevocable
guarantee, with respect to the Exchange Capital Securities, on a subordinated
basis of the Trust's obligations under the Capital Securities, but will apply
only to the extent that the Trust has funds sufficient to make such payments. If
the Corporation does not make interest payments on the Junior Subordinated
Debentures held by the Trust, the Trust will not be able to pay the
Distributions on the Capital Securities and will not have funds legally
available therefor. See "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee."
The Original Guarantee does and the Exchange Guarantee will rank subordinate
and junior in right of payment to all Senior Indebtedness to the extent provided
therein. See "--Status of the Original Guarantee" and "-- Status of Exchange
Guarantee." Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise is subject to the
prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the Guarantee effectively will
be subordinated to all existing and
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future liabilities of the Corporation's subsidiaries, including the
Corporation's subsidiaries' deposit liabilities, and all liabilities of any
future subsidiaries of the Corporation. Claimants should look only to the assets
of the Corporation for payments under the Guarantee. See "Description of the
Junior Subordinated Debentures--General." The Guarantee does not limit the
incurrence or issuance of other secured or unsecured debt of the Corporation,
including Senior Indebtedness, whether under the Indenture, any other indenture
that the Corporation may enter into in the future or otherwise.
The Corporation will, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Indenture, taken together, fully, irrevocably
and unconditionally guarantee all of the Trust's obligations under the Capital
Securities. No single document standing alone, or operating in conjunction with
fewer than all of the other documents, constitutes such guarantee. It is only
the combined operation of these documents that has the effect of providing a
full, irrevocable and unconditional guarantee of the Trust's obligations under
the Capital Securities. See "Relationship Among the Capital Securities, the
Junior Subordinated Debentures and the Guarantee."
STATUS OF THE EXCHANGE GUARANTEE
The Exchange 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 Junior Subordinated Debentures.
See "Description of Junior 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 Exchange
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 Exchange Guarantee. See "Description
of Junior Subordinated Debentures--General." The Exchange 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 Exchange 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 Exchange 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 Exchange Guarantee
without first instituting a legal proceeding against any other person or
entity). The Exchange Guarantee will be held for the benefit of the holders of
the Exchange Capital Securities. The Exchange 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 Exchange Capital Securities
of the Exchange Junior Subordinated Debentures.
STATUS OF ORIGINAL GUARANTEE
If not all the Exchange Capital Securities are exchanged for Original
Capital Securities in the Exchange Offer, the Original Guarantee will not
terminate, but will continue to guarantee the obligations of the Corporation for
the benefit of the holders of the Original Capital Securities. The Original
Guarantee will terminate upon full payment of the applicable Redemption Price of
the Original Capital Securities, upon full payment of the Liquidation Amount
payable upon liquidation of the Trust or upon distribution of Original Junior
Subordinated Debentures to the holders of the Original Capital Securities. The
Original Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time
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any holder of the Original Capital Securities must restore payment of any sums
paid under the Original Capital Securities or the Original Guarantee.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder,
PROVIDED, HOWEVER, that except with respect to a default in payment of any
Guarantee Payment, the Corporation shall have received notice of default and
shall not have cured such default within 60 days after receipt of such notice.
The holders of not less than a majority in Liquidation Amount of the Capital
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of a majority of the Liquidation Amount of such outstanding Capital
Securities. The manner of obtaining any such approval will be as set forth under
"Description of Capital Securities--Voting Rights; Amendment of the Trust
Agreement." All guarantees and agreements contained in the Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Corporation and shall inure to the benefit of the holders of the Capital
Securities then outstanding.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the applicable Redemption Price of all outstanding Capital
Securities, upon full payment of the Liquidation Amount payable upon liquidation
of the Trust or upon distribution of Junior Subordinated Debentures to the
holders of the Capital Securities. The Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any holder of the
Capital Securities must restore payment of any sums paid under the Capital
Securities or the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Corporation in performance of the Guarantee, will undertake to
perform only such duties as are specifically set forth in the Guarantee and, in
case a default with respect to the 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 Guarantee
Trustee will be under no obligation to exercise any of the powers vested in it
by the Guarantee at the request of any holder of the Capital Securities unless
it is offered reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby.
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GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Trust has funds on hand legally available for the payment of
such Distributions) will be irrevocably guaranteed by the Corporation as and to
the extent set forth under "Description of Guarantee." Taken together, the
Corporation's obligations under the Junior Subordinated Debentures, the
Indenture, the Trust Agreement and the Guarantee will provide, in the aggregate,
a full, irrevocable and unconditional guarantee of payments of Distributions and
other amounts due on the Capital Securities. No single document standing alone
or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the Trust's obligations under the Capital Securities. If and to the extent
that the Corporation does not make the required payments on the Junior
Subordinated Debentures, the Trust will not have sufficient funds to make the
related payments, including Distributions, on the Capital Securities. The
Guarantee 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 Capital Securities is to institute a Direct Action. The
obligations of the Corporation under the 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
Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because: (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debentures will be equal to the sum of the Liquidation Amount or
Redemption Price, as applicable, of the Trust Securities; (ii) the interest rate
and interest and other payment dates on the Junior Subordinated Debentures will
match the Distribution rate and Distribution and other payment dates for the
Trust Securities; (iii) the Corporation, as Sponsor, shall pay for all and any
costs, expenses and liabilities of the Trust, except the Trust's obligations to
holders of Trust Securities under such Trust Securities; and (iv) the Trust
Agreement will provide that the Trust is not authorized to engage in any
activity that is not consistent with the limited purposes thereof.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Trust or any
other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Trust Agreement. However, in
the event of payment defaults under, or acceleration of, Senior Indebtedness,
the subordination provisions of the Indenture will provide that no payments may
be made in respect of the Junior Subordinated Debentures until such Senior
Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on Junior Subordinated
Debentures would constitute an Event of Default under the Trust Agreement.
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LIMITED PURPOSE OF THE TRUST
The 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 Junior 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 Capital Security and a holder of a Junior Subordinated
Debenture is that a holder of a Junior Subordinated Debenture will be entitled
to receive from the Corporation the principal amount of (and premium, if any)
and interest on Junior Subordinated Debentures held, while a holder of Capital
Securities is entitled to receive Distributions from the Trust (or, in certain
circumstances, from the Corporation under the Guarantee) if and to the extent
the Trust has funds on hand legally available for the payment of such
Distributions.
RIGHTS UPON DISSOLUTION
Unless the Junior Subordinated Debentures are distributed to holders of the
Trust Securities, upon any voluntary or involuntary dissolution, winding-up or
liquidation of the Trust, after satisfaction of the liabilities of creditors of
the Trust as required by applicable law, the holders of the Trust Securities
will be entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of Capital Securities--Liquidation of the
Trust and Distribution of Junior Subordinated Debentures." Upon any voluntary or
involuntary liquidation or bankruptcy of the Corporation, the Property Trustee,
as holder of the Junior Subordinated Debentures, would be a subordinated
creditor of the Corporation, subordinated in right of payment to all Senior
Indebtedness as set forth in the Indenture, but entitled to receive payment in
full of principal (and premium, if any) and interest, before any stockholders of
the Corporation receive payments or distributions. Since the Corporation will be
the guarantor under the Guarantee and will agree to pay for all costs, expenses
and liabilities of the Trust (other than the Trust's obligations to the holders
of its Trust Securities), the positions of a holder of Capital Securities and a
holder of Junior Subordinated Debentures relative to other creditors and to
stockholders of the Corporation in the event of liquidation or bankruptcy of the
Corporation are expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of certain of the material United States federal
income tax consequences of the purchase, ownership and disposition of Capital
Securities held as capital assets by a holder who purchases such Capital
Securities upon initial issuance. The statements of law and legal conclusions
set forth in the summary regarding the tax consequences to the beneficial owners
of Capital Securities represent the opinion of Muldoon, Murphy & Faucette,
special federal income tax counsel to the Corporation and this Trust ("Special
Tax Counsel"). This summary and the tax opinion of Special Tax Counsel only
address the tax consequences to a person that acquires Capital Securities on
their original issue at their original offering price. The summary does not
address all tax consequences that may be applicable to beneficial owners of the
Capital Securities, nor does it address the tax consequences to special classes
of holders such as banks, thrifts, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
tax-exempt investors, United States Alien Holders (as defined below) engaged in
a U.S. trade or business or persons that will hold the Capital Securities as a
position in a "straddle," as part of a "synthetic security" or "hedge," as part
of a "conversion transaction" or other integrated investment, or as other than a
capital asset. This summary also does not address the tax consequences to
persons that have a functional currency other than the U.S. dollar or the tax
consequences to shareholders, partners or beneficiaries of a holder of Capital
Securities. Further, it does not include any description of any alternative
minimum tax consequences or the tax laws of any state or local government or of
any foreign government that may be applicable to the Capital Securities. This
summary is based on the 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
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retroactive basis. An opinion of Special Tax Counsel is not binding on the
Internal Revenue Service ("IRS") or the courts. No rulings have been or are
expected to be sought from the IRS with respect to any of the transactions
described herein and no assurance can be given that the IRS will not take
contrary positions. Moreover, no assurance can be given that the opinions
expressed herein will not be challenged by the IRS or, if challenged, that such
a challenge would not be successful.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Exchange Capital Securities for Original Capital Securities
should not be a taxable event to holders for United States federal income tax
purposes. The exchange of Exchange Capital Securities for Original Capital
Securities pursuant to the Exchange Offer should not be treated as an "exchange"
for United States federal income tax purposes because the Original Capital
Securities should not be considered to differ materially in kind or extent from
the Exchange Capital Securities and because the exchange will occur by operation
of the terms of the Original Capital Securities. If, however, the exchange of
the Exchange Capital Securities for the Original Capital Securities were treated
as an exchange for United States federal income tax purposes, such exchange
should constitute a recapitalization for federal income tax purposes.
Accordingly, the Exchange Capital Securities should have the same issue price as
the Original Capital Securities, and a holder should have the same adjusted tax
basis and holding period in the Exchange Capital Securities as the holder had in
the Original Capital Securities immediately before the exchange.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
The Corporation intends to take the position that the Junior Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Corporation. The Corporation, the Trust and the holders of
the Capital Securities (by acceptance of a beneficial interest in a Capital
Security) will agree to treat the Junior Subordinated Debentures as indebtedness
of the Corporation for all United States federal income tax purposes. No
assurance can be given, however, that such position will not be challenged by
the IRS or, if challenged, that such a challenge will not be successful. The
remainder of this discussion assumes that the Junior Subordinated Debentures
will be classified as indebtedness of the Corporation for United States federal
income tax purposes.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the 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 such opinion, the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation. Accordingly, for United States federal income tax
purposes, each holder of Capital Securities generally will be considered the
owner of an undivided interest in the Junior Subordinated Debentures, and each
holder will be required to include in its gross income any interest (or OID
accrued) with respect to its allocable share of those Junior Subordinated
Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations") applicable to
debt instruments issued on or after August 13, 1996, a "remote" contingency that
stated interest will not be timely paid will be ignored in determining whether a
debt instrument is issued with OID. The Corporation believes that the likelihood
of its exercising its option to defer payments of interest is "remote" since
exercising that option would, among other things, prevent the Corporation from
declaring dividends on any class of its equity securities. Accordingly, the
Corporation intends to take the position based on the advice of Special Tax
Counsel that the Junior Subordinated Debentures will not be considered to be
issued with OID and,
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accordingly, stated interest on the Junior Subordinated Debentures generally
will be taxable to a holder as ordinary income at the time it is paid or accrued
in accordance with such holder's method of tax accounting.
Under the Regulations, if the Corporation were to exercise its option to
defer payments of interest, the Junior Subordinated Debentures would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the Junior
Subordinated Debentures remain outstanding. In such event, all of a holder's
taxable interest income with respect to the Junior Subordinated Debentures would
thereafter be accounted for on an economic accrual basis regardless of such
holder's method of tax accounting, and actual distributions of stated interest
would not be reported as taxable income. Consequently, a holder of Capital
Securities would be required to include in gross income OID even though the
Corporation would not make actual cash payments during an Extension Period.
Moreover, under the Regulations, if the option to defer the payment of interest
was determined not to be "remote" within the meaning of the Regulations, the
Junior Subordinated Debentures would be treated as having been originally issued
with OID. In such event, all of a holder's taxable interest income with respect
to the Junior Subordinated Debentures would be accounted for on an economic
accrual basis regardless of such holder's method of tax accounting, and actual
distributions of stated interest would not be reported as taxable income. In
each case the amount of OID that will accrue in any month will approximately
equal the amount of interest accruing at the stated interest rate.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation described herein and assert that the
Junior Subordinated Debentures were originally issued with OID.
Because income on the Capital Securities will constitute interest or OID,
corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
The Corporation will have the right at any time to liquidate the Trust and
cause the Junior Subordinated Debentures to be distributed to the holders of the
Trust Securities. Under current law, such a distribution, for United States
federal income tax purposes, would be treated as a nontaxable event to each
holder, and each holder would receive an aggregate tax basis in the Junior
Subordinated Debentures equal to such holder's aggregate tax basis in its
Capital Securities. A holder's holding period in the Junior Subordinated
Debentures so received in liquidation of the Trust would include the period
during which the Capital Securities were held by such holder. A holder will
account for interest in respect of the Junior Subordinated Debentures received
from the Trust in the manner described above under "--Interest Income and
Original Issue Discount," including any accrual of OID (if any) attributed to
the Junior Subordinated Debentures upon any such distribution.
Under certain circumstances described herein (see "Description of Capital
Securities"), the Junior Subordinated Debentures may be redeemed for cash and
the proceeds of such redemption distributed to holders in redemption of their
Capital Securities. Under current law, such a redemption would, for United
States federal income tax purposes, constitute a taxable disposition of the
redeemed Capital Securities, and a holder could recognize gain or loss as if it
sold such redeemed Capital Securities for cash. See "--Sales of Capital
Securities."
SALES OF CAPITAL SECURITIES
A holder that sells Capital Securities (including a redemption of the
Capital Securities by the Corporation for cash) will recognize gain or loss
equal to the difference between its adjusted tax basis in the Capital Securities
and the amount realized on the sale of such Capital Securities (other than with
respect to accrued and unpaid interest which has not yet been included in
income, which will be treated as
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ordinary income). A holder's adjusted tax basis in the Capital Securities
generally will be its initial purchase price increased by OID (if any)
previously includable in such holder's gross income to the date of disposition
and decreased by payments (if any) received on the Capital Securities in respect
of OID. Such gain or loss generally will be a capital gain or loss. Pursuant to
the Taxpayer Relief Act of 1997, net gain on the sale of Capital Securities
constituting a capital asset which are realized by an individual after July 28,
1997, and held for more than 18 months are taxed for federal income tax purposes
at a capital gains tax rate of 20% (or rate of 10% if the individual taxpayer is
in the 15% tax bracket). Effective in 2001, the 20% rate drops to 18% (and the
10% drops to 8%) for capital assets acquired after the year 2000 and held more
than five years; however, the requirement that the capital asset be acquired
after the year 2000 does not apply to the 8% rate. Net gains on the sale of
Capital Securities held by an individual for more than one year, but not more
than 18 months, are taxed for federal income tax purposes at a federal capital
gains tax rate of 28%.
The Capital Securities may trade at a price that does not accurately reflect
the value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder who uses the accrual method of accounting for
tax purposes (and a cash method holder, if the Junior Subordinated Debenture are
deemed to have been issued with OID) who disposes of his Capital Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Junior Subordinated Debentures
through the date of disposition in income as ordinary income (i.e., interest or,
if applicable, OID), and to add such amount to his adjusted tax basis in his pro
rata share of the underlying Junior Subordinated Debentures deemed disposed of.
To the extent the selling price is less than the holder's adjusted tax basis
(which will include all accrued but unpaid interest) a holder will recognize a
capital loss. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax purposes.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes.
A "U.S. Holder" is a holder of Capital Securities who or which is a citizen
or individual resident (or is treated as a citizen or individual resident) of
the United States for federal income tax purposes, a corporation or partnership
(except in the case of a partnership to the extent provided in Regulations)
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate the income of which is includable in its gross
income for federal income tax purposes without regard to its source; or a trust
if, and only if, (i) a court within the United States is able to exercise
primary supervision over the administration of the trust and (ii) one or more
United States trustees have the authority to control all substantial decisions
of the trust.
Under present United States federal income tax laws: (i) payments by the
Trust or any of its paying agents to any holder of a Capital Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that (a) the beneficial owner of the Capital
Security does not actually or constructively own 10 percent or more of the total
combined voting power of all classes of stock of the Corporation entitled to
vote, (b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Corporation through stock ownership,
and (c) either (A) the beneficial owner of the Capital Security certifies to the
Trust or its agent, under penalties of perjury, on the form designated by the
IRS, supplying all the information requested on the form designated by the IRS,
that it is not a United States holder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of business (a "Financial
Institution"), and holds the Capital Security in such capacity, certifies to the
Trust or its agent, under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution between
it and the beneficial owner and furnishes the Trust or its agent with a copy
thereof; and (ii) a United States Alien Holder of a Capital Security will
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not be subject to United States federal withholding tax on any gain realized
upon the sale or other disposition of a Capital Security. Final Treasury
Regulations (the "Withholding Regulations") provide alternative methods for
satisfying the certification requirements described in clause (i)(c) above. The
Withholding Regulations are to be effective for certain payments made to United
States Alien Holders after December 31, 1999.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Capital Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Capital Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
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ERISA CONSIDERATIONS
Each of the Corporation (the obligor with respect to the Junior Subordinated
Debentures held by the Trust), and its affiliates and the Property Trustee may
be considered a "party in interest" (within the meaning of ERISA) or a
"disqualified person" (within the meaning of Section 4975 of the Code) with
respect to many Plans that are subject to ERISA and certain employee
benefit-related provisions of the Code. The purchase and/or holding of Capital
Securities by a Plan that is subject to the fiduciary responsibility provisions
of ERISA or the prohibited transaction provisions of Section 4975 of the Code
(including individual retirement arrangements and other plans described in
Section 4975(e)(1) of the Code) and with respect to which the Corporation, the
Property Trustee or any affiliate is a service provider (or otherwise is a party
in interest or a disqualified person) may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such Capital
Securities are acquired pursuant to and in accordance with an applicable
exemption, such as Prohibited Transaction Class Exemption ("PTCE") 84-14 (an
exemption for certain transactions determined by an independent qualified
professional asset manager), PTCE 91-38 (an exemption for certain transactions
involving banks' collective investment funds), PTCE 90-1 (an exemption for
certain transactions involving insurance company pooled separate accounts), PTCE
95-60 (an exemption for transactions involving certain insurance company general
accounts) or PTCE 96-23 (an exemption for certain transactions determined by an
in-house asset manager). In addition, a Plan fiduciary considering the purchase
of Capital Securities should be aware that the assets of the Trust may be
considered "plan assets" for ERISA purposes. In such event, any persons
exercising discretion with respect to the Junior Subordinated Debentures may
become fiduciary parties in interest or disqualified persons with respect to
investing Plans. Accordingly, each investing Plan, by purchasing the Capital
Securities, will be deemed to have directed the Trust to invest in the Junior
Subordinated Debentures and to have consented to the appointment of the Property
Trustee. In this regard, it should be noted that, in an Event of Default, the
Corporation may not remove the Property Trustee without the approval of a
majority of the holders of the Capital Securities.
A Plan fiduciary should consider whether the purchase of Capital Securities
could result in a delegation of fiduciary authority to the Property Trustee,
and, if so, whether such a delegation of authority is consistent with the terms
of the Plan's governing instrument or any investment management agreement with
the Plan. In making such determination, a Plan fiduciary should note that the
Property Trustee is a U.S. bank qualified to be an investment manager (within
the meaning of Section 3(38) of ERISA). Further, prior to an Event of Default
with respect to the Junior Subordinated Debentures, the Property Trustee will
have only limited custodial and ministerial authority with respect to Trust
assets.
THE SALE OF INVESTMENTS TO PLANS IS IN NO RESPECT A REPRESENTATION BY THE
TRUST, THE CORPORATION, THE PROPERTY TRUSTEE, THE INITIAL PURCHASERS OR ANY
OTHER PERSON ASSOCIATED WITH THE SALE OF THE CAPITAL SECURITIES THAT SUCH
SECURITIES MEET ALL RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY
PLANS GENERALLY OR ANY PARTICULAR PLAN, OR THAT SUCH SECURITIES ARE OTHERWISE
APPROPRIATE FOR PLANS GENERALLY OR ANY PARTICULAR PLAN. ANY PURCHASER PROPOSING
TO ACQUIRE CAPITAL SECURITIES WITH ASSETS OF ANY PLAN SHOULD CONSULT WITH ITS
COUNSEL.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by Participating Broker-Dealers during the period referred to below in
connection with resales of Exchange Capital Securities received in exchange for
Original Capital Securities if such Original Capital Securities were acquired by
such Participating Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities. The Corporation and the
Trust have agreed that this
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Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such Exchange
Capital Securities for a period ending 90 days after the Expiration Date
(subject to extension under certain limited circumstances described herein) or,
if earlier, when all such Exchange Capital Securities have been disposed of by
such Participating Broker-Dealer. However, a Participating Broker-Dealer who
intends to use this Prospectus in connection with the resale of Exchange Capital
Securities received in exchange for Original Capital Securities pursuant to the
Exchange Offer must notify the Corporation or the Trust, or cause the
Corporation or the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the space
provided for that purpose in the Letter of Transmittal or may be delivered to
the Exchange Agent at one of the addresses set forth herein under "The Exchange
Offer--Exchange Agent." See "The Exchange Offer--Resales of Exchange Capital
Securities."
The Corporation or the Trust will not receive any cash proceeds from the
issuance of the Exchange Capital Securities offered hereby. Exchange Capital
Securities received by broker-dealers for their own accounts in connection with
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Capital Securities.
Any broker-dealer that resells Exchange Capital Securities that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Capital
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of Exchange Capital Securities
and any commissions or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date, the Trust and the
Corporation will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Trust and the Corporation have
agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Capital Securities) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Capital Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters and certain matters relating to United States federal
income tax considerations will be passed upon for the Corporation by Muldoon,
Murphy & Faucette. Certain matters of Delaware law relating to the validity of
the Capital Securities will be passed upon on behalf of the Trust by Richards,
Layton & Finger, P.A., special Delaware counsel to the Trust and the
Corporation.
EXPERTS
The consolidated financial statements of Reliance Bancorp, Inc. and
subsidiary as of June 30, 1997 and 1996, and for each of the years in the
three-year period ended June 30, 1997 incorporated by reference in the
Corporation's Annual Report on Form 10-K for the year ended June 30, 1997, have
been incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said form as experts in accounting and
auditing.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION, THE TRUST
OR BY THE INITIAL PURCHASERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION OR THE TRUST SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 9
Incorporation of Certain Documents by Reference........................... 9
Summary................................................................... 11
Risk Factors.............................................................. 17
Reliance Capital Trust I.................................................. 23
Reliance Bancorp, Inc..................................................... 23
Recent Developments....................................................... 25
Use of Proceeds........................................................... 25
Ratios of Earnings to Combined Fixed Charges.............................. 25
Accounting Treatment...................................................... 25
Capitalization............................................................ 26
Selected Consolidated Financial and Other Data of the Corporation......... 27
The Exchange Offer........................................................ 29
Description of Exchange Securities; Comparison to Original Securities..... 38
Description of Capital Securities......................................... 39
Description of Junior Subordinated Debentures............................. 50
Description of Guarantee.................................................. 60
Relationship Among the Capital Securities, the Junior Subordinated
Debentures and the Guarantee............................................ 64
Certain Federal Income Tax Consequences................................... 65
ERISA Considerations...................................................... 69
Plan of Distribution...................................................... 69
Legal Matters............................................................. 70
Independent Accountants................................................... 70
</TABLE>
RELIANCE CAPITAL TRUST I
OFFER TO EXCHANGE ITS 8.17% CAPITAL SECURITIES, SERIES B (LIQUIDATION AMOUNT
$1,000 PER CAPITAL SECURITY) WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 8.17% CAPITAL SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED
HEREIN, BY
RELIANCE BANCORP, INC.
---------------------
PROSPECTUS
---------------------
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with the General Corporation Law of the State of Delaware
(being Chapter 1 of Title 8 of the Delaware Code), Articles 10 and 11 of the
registrant's Certificate of Incorporation provide as follows:
TENTH:
A. Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a Director or an Officer of the
Corporation or is or was serving at the request of the Corporation as a
Director, Officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a Director, Officer,
employee or agent, or in any other capacity while serving as a Director,
Officer, employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than such law permitted the
Corporation to provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered by
such indemnitee in connection therewith; provided, however, that, except as
provided in Section C hereof with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
B. The right to indemnification conferred in Section A of this Article TENTH
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition (hereinafter
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a Director or Officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, services to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section or otherwise. The rights to indemnification and to the advancement of
expenses conferred in Sections A and B of this Article TENTH shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a
Director, Officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Article TENTH is not paid in full
by the Corporation within sixty days after a written claim has been received by
the Corporation, except in the case of a claim for an advancement of expenses,
in which case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, or in a
suit brought by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, the indemnitee shall be entitled to be paid also
the expenses of prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to
II-1
<PAGE>
enforce a right to indemnification hereunder (but not in a suit brought by the
indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) in any suit by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking the Corporation shall be
entitled to recover such expenses upon a final adjudication that, the indemnitee
has not met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article TENTH or otherwise shall be on the Corporation.
D. The rights to indemnification and to the advancement of expenses
conferred in this Article TENTH shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, the Corporation's
Certificate of Incorporation, Bylaws, agreement, vote of stockholders or
Disinterested Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect itself
and any Director, Officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
F. The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent of
the provisions of this Article TENTH with respect to the indemnification and
advancement of expenses of Directors and Officers of the Corporation.
ELEVENTH:
A Director of this Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability: (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) under Section 174 of the Delaware General Corporation
Law; or (iv) for any transaction from which the Director derived an improper
personal benefit. If the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting the personal
liability of Directors, then the liability of a Director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders of
the Corporation shall not adversely affect any right or protection of a Director
of the Corporation existing at the time of such repeal or modification.
II-2
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------------------
<C> <S>
4.1 Indenture of the Corporation relating to the Junior Subordinated Debentures
4.2 Form of Certificate of Exchange Junior Subordinated Debenture
4.3 Certificate of Trust of Reliance Capital Trust I
4.4 Declaration of Trust of Reliance Capital Trust I
4.5 Amended and Restated Declaration of Trust of Reliance Capital Trust I
4.6 Form of Exchange Capital Security Certificate for Reliance Capital Trust I
4.7 Form of Exchange Guarantee of the Corporation relating to the Exchange Capital Securities
4.8 Registration Rights Agreement
4.9 Liquidated Damages Agreement
5.1 Opinion and consent of Muldoon, Murphy & Faucette as to validity of the Exchange Junior Subordinated
Debentures and the Exchange Guarantee to be issued by the Corporation
5.2 Opinion and consent of Richards, Layton & Finger, P.A. as to the validity of the Exchange Capital
Securities to be issued by Reliance Capital Trust I
8.0 Opinion of Muldoon, Murphy & Faucette as to certain federal income tax matters
12.1 Computation of ratio of earnings to fixed charges (excluding interest on deposits)
12.2 Computation of ratio of earnings to fixed charges (including interest on deposits)
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Muldoon, Murphy & Faucette (included in Exhibit 5.1)
23.3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
24.0 Power of Attorney of certain officers and directors of the Corporation (located on the signature page
hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as Property Trustee under the
Declaration of Trust of Reliance Capital Trust I
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as Guarantee Trustee under the
Exchange Guarantee
25.3 Form T-1 Statement of Eligibility of The Bank of New York to act as Debenture Trustee under the
Indenture
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
</TABLE>
- ------------------------
II-3
<PAGE>
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Each of the undersigned Registrants hereby also undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement;
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereto) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1) (i) and (1) (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by a Registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) to deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Act of 1934, where interim financial information
to be presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
undersigned Registrant pursuant to the provisions, or otherwise, each Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by each
II-4
<PAGE>
undersigned Registrant of expenses incurred or paid by a director, officer of
controlling person of each Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, each Registrant will, unless
in the opinion of its counsel the matter has been settled by the controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Each of the undersigned Registrants hereby undertakes to respond to requests
for information that is incorporated by reference into the Prospectus pursuant
to Item 4, 10(b), 11 or 13 of this Form within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
Each of the undersigned Registrants hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired or involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Reliance
Bancorp, Inc. certifies that it has reasonable grounds that it meets all of the
requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Garden City, State of New York on the 24th day of
September, 1998.
RELIANCE BANCORP, INC.
BY: /S/ RAYMOND A. NIELSEN
------------------------------------------
Raymond A. Nielsen
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each of the persons whose signature
appears below hereby appoints Raymond A. Nielsen, Gerald M. Sauvigne and Paul D.
Hagan, and each of them as his or her attorney-in-fact to sign in his or her
name and behalf, in any and all capacities stated below and to file with the
Securities and Exchange Commission any and all amendments, including
post-effective amendments, to this Registration Statement on Form S-4, making
such changes in the Registration Statement as appropriate, and generally to do
all such things in their behalf in their capacities as directors and/or officers
to enable Reliance Capital Trust I to comply with the provisions of the
Securities Act of 1933, and all requirements of the Securities and Exchange
Commission.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------------------------ --------------------------------- ----------------------
<C> <S> <C>
/s/ RAYMOND A. NIELSEN President, Chief Executive
------------------------------------------- Officer and Director (principal September 24, 1998
Raymond A. Nielsen executive officer)
Senior Vice President and Chief
/s/ PAUL D. HAGAN Financial Officer (principal
------------------------------------------- financial and accounting September 24, 1998
Paul D. Hagan officer)
/s/ RAYMOND L. NIELSEN
------------------------------------------- Chairman of the Board September 24, 1998
Raymond L. Nielsen
/s/ DONALD LAPASTA
------------------------------------------- Director September 24, 1998
Donald LaPasta
/s/ J. WILLIAM NEWBY
------------------------------------------- Director September 24, 1998
J. William Newby
/s/ PETER F. NEUMANN
------------------------------------------- Director September 24, 1998
Peter F. Neumann
/s/ DOUGLAS G. LAPASTA
------------------------------------------- Director September 24, 1998
Douglas G. LaPasta
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------------------------ --------------------------------- ----------------------
<C> <S> <C>
/s/ THOMAS G. DAVIS, JR.
------------------------------------------- Director September 24, 1998
Thomas G. Davis, Jr.
------------------------------------------- Director
Conrad J. Gunther, Jr.
</TABLE>
II-7
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Reliance Capital
Trust I certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Garden City, State of New York, on the day of
, 1998.
RELIANCE CAPITAL TRUST I
BY: /S/ RAYMOND A. NIELSEN
------------------------------------------
Raymond A. Nielsen
ADMINISTRATIVE TRUSTEE
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each of the Administrative Trustees of
Reliance Capital Trust I whose signature appears below hereby appoints Raymond
A. Nielsen, Gerald M. Sauvigne and Paul D. Hagan, and each of them as his or her
attorney-in-fact to sign in his name and behalf, in any and all capacities
stated below and to file with the Securities and Exchange Commission any and all
amendments, including post-effective amendments, to this Registration Statement
on Form S-4, making such changes in the Registration Statement as appropriate,
and generally to do all such things in their behalf in their capacities as
administrative trustees to enable Reliance Capital Trust I to comply with the
provisions of the Securities Act of 1933, and all requirements of the Securities
and Exchange Commission.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------------------------ --------------------------------- ----------------------
<C> <S> <C>
/s/ RAYMOND A. NIELSEN
------------------------------------------- Administrative Trustee , 1998
Raymond A. Nielsen
/s/ GERALD M. SAUVIGNE
------------------------------------------- Administrative Trustee , 1998
Gerald M. Sauvigne
/s/ PAUL D. HAGAN
------------------------------------------- Administrative Trustee , 1998
Paul D. Hagan
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------------------
<C> <S>
4.1 Indenture of the Corporation relating to the Junior Subordinated Debentures
4.2 Form of Certificate of Exchange Junior Subordinated Debenture
4.3 Certificate of Trust of Reliance Capital Trust I
4.4 Declaration of Trust of Reliance Capital Trust I
4.5 Amended and Restated Declaration of Trust of Reliance Capital Trust I
4.6 Form of Exchange Capital Security Certificate for Reliance Capital Trust I
4.7 Form of Exchange Guarantee of the Corporation relating to the Exchange Capital Securities
4.8 Registration Rights Agreement
4.9 Liquidated Damages Agreement
5.1 Opinion and consent of Muldoon, Murphy & Faucette as to validity of the Exchange Junior Subordinated
Debentures and the Exchange Guarantee to be issued by the Corporation
5.2 Opinion and consent of Richards, Layton & Finger, P.A. as to the validity of the Exchange Capital
Securities to be issued by Reliance Capital Trust I
8.0 Opinion of Muldoon, Murphy & Faucette as to certain federal income tax matters
12.1 Computation of ratio of earnings to fixed charges (excluding interest on deposits)
12.2 Computation of ratio of earnings to fixed charges (including interest on deposits)
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Muldoon, Murphy & Faucette (included in Exhibit 5.1)
23.3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
24.0 Power of Attorney of certain officers and directors of the Corporation (located on the signature page
hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as Property Trustee under the
Declaration of Trust of Reliance Capital Trust I
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as Guarantee Trustee under the
Exchange Guarantee
25.3 Form T-1 Statement of Eligibility of The Bank of New York to act as Debenture Trustee under the
Indenture
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
</TABLE>
- ------------------------
ve
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
RELIANCE BANCORP, INC.
-----------------------------------------------------
-----------------------------------------------------
INDENTURE
Dated as of April 28, 1998
-----------------------------------------------------
THE BANK OF NEW YORK
as Debenture Trustee
-----------------------------------------------------
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
- --------------------------------------------------------------------------------
<PAGE>
Tie Sheet of provisions of Trust Indenture Act of 1939 with Indenture
dated as of April 28, 1998, between Reliance Bancorp, Inc. and The Bank of New
York, as Debenture Trustee:
<TABLE>
<CAPTION>
ACT SECTION INDENTURE SECTION
- ----------- -----------------
<S> <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
</TABLE>
- ----------
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS.......................................................................................................1
SECTION 1.01 Definitions.........................................................................................1
SECTION 1.02 Business Day Certificate...........................................................................10
ARTICLE II
SECURITIES.......................................................................................................11
SECTION 2.01 Forms Generally....................................................................................11
SECTION 2.02 Execution and Authentication.......................................................................11
SECTION 2.03 Form and Payment...................................................................................11
SECTION 2.04 Legends............................................................................................12
SECTION 2.05 Global Security....................................................................................12
SECTION 2.06 Interest...........................................................................................13
SECTION 2.07 Transfer and Exchange..............................................................................14
SECTION 2.08 Replacement Securities.............................................................................16
SECTION 2.09 Temporary Securities...............................................................................16
SECTION 2.10 Cancellation.......................................................................................17
SECTION 2.11 Defaulted Interest.................................................................................17
SECTION 2.12 CUSIP Numbers......................................................................................18
ARTICLE III
PARTICULAR COVENANTS OF THE CORPORATION..........................................................................18
SECTION 3.01 Payment of Principal, Premium and Interest.........................................................18
SECTION 3.02 Offices for Notices and Payments, etc..............................................................18
SECTION 3.03 Appointments to Fill Vacancies in Debenture Trustee's Office.......................................19
SECTION 3.04 Provision as to Paying Agent.......................................................................19
SECTION 3.05 Certificate to Debenture Trustee...................................................................20
SECTION 3.06 Compliance with Consolidation Provisions...........................................................20
SECTION 3.07 Limitation on Dividends............................................................................20
SECTION 3.08 Covenants as to Reliance Capital Trust.............................................................21
SECTION 3.09 Payment of Expenses................................................................................21
SECTION 3.10 Payment Upon Resignation or Removal................................................................22
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
CORPORATION AND THE DEBENTURE TRUSTEE............................................................................22
SECTION 4.01 Securityholders' Lists.............................................................................22
SECTION 4.02 Preservation and Disclosure of Lists...............................................................23
SECTION 4.03 Reports by the Corporation.........................................................................24
SECTION 4.04 Reports by the Debenture Trustee...................................................................25
ARTICLE V
REMEDIES OF THE DEBENTURE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT..............................................................................25
SECTION 5.01 Events of Default..................................................................................25
SECTION 5.02 Payment of Securities on Default; Suit Therefor....................................................27
SECTION 5.03 Application of Moneys Collected by Debenture Trustee...............................................29
SECTION 5.04 Proceedings by Securityholders.....................................................................29
SECTION 5.05 Proceedings by Debenture Trustee...................................................................30
SECTION 5.06 Remedies Cumulative and Continuing.................................................................30
SECTION 5.07 Direction of Proceedings and Waiver of Defaults by Majority of
Securityholders....................................................................................31
SECTION 5.08 Notice of Defaults.................................................................................31
SECTION 5.09 Undertaking to Pay Costs...........................................................................32
ARTICLE VI
CONCERNING THE DEBENTURE TRUSTEE.................................................................................32
SECTION 6.01 Duties and Responsibilities of Debenture Trustee...................................................32
SECTION 6.02 Reliance on Documents, Opinions, etc...............................................................34
SECTION 6.03 No Responsibility for Recitals, etc................................................................35
SECTION 6.04 Debenture Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Securities.............................................................35
SECTION 6.05 Moneys to be Held in Trust.........................................................................36
SECTION 6.06 Compensation and Expenses of Debenture Trustee.....................................................36
SECTION 6.07 Officers' Certificate as Evidence..................................................................37
SECTION 6.08 Conflicting Interest of Debenture Trustee..........................................................37
SECTION 6.09 Eligibility of Debenture Trustee...................................................................37
SECTION 6.10 Resignation or Removal of Debenture Trustee........................................................37
SECTION 6.11 Acceptance by Successor Debenture Trustee..........................................................39
SECTION 6.12 Succession by Merger, etc..........................................................................39
SECTION 6.13 Limitation on Rights of Debenture Trustee as a Creditor............................................40
SECTION 6.14 Authenticating Agents..............................................................................40
</TABLE>
ii
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ARTICLE VII
CONCERNING THE SECURITYHOLDERS...................................................................................41
SECTION 7.01 Action by Securityholders..........................................................................41
SECTION 7.02 Proof of Execution by Securityholders..............................................................42
SECTION 7.03 Who Are Deemed Absolute Owners.....................................................................42
SECTION 7.04 Securities Owned by Corporation Deemed Not Outstanding.............................................42
SECTION 7.05 Revocation of Consents; Future Holders Bound.......................................................43
ARTICLE VIII
SECURITYHOLDERS' MEETINGS........................................................................................43
SECTION 8.01 Purposes of Meetings...............................................................................43
SECTION 8.02 Call of Meetings by Debenture Trustee..............................................................43
SECTION 8.03 Call of Meetings by Corporation or Securityholders.................................................44
SECTION 8.04 Qualifications for Voting..........................................................................44
SECTION 8.05 Regulations........................................................................................44
SECTION 8.06 Voting.............................................................................................45
ARTICLE IX
AMENDMENTS.......................................................................................................45
SECTION 9.01 Without Consent of Securityholders.................................................................45
SECTION 9.02 With Consent of Securityholders....................................................................47
SECTION 9.03 Compliance with Trust Indenture Act; Effect of Supplemental Indentures.............................47
SECTION 9.04 Notation on Securities.............................................................................48
SECTION 9.05 Evidence of Compliance of Supplemental Indenture to be Furnished to
Debenture Trustee..................................................................................48
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE................................................................48
SECTION 10.01 Corporation May Consolidate, etc., on Certain Terms...............................................48
SECTION 10.02 Successor Corporation to be Substituted for Corporation...........................................49
SECTION 10.03 Opinion of Counsel to be Given Debenture Trustee..................................................49
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE..........................................................................50
SECTION 11.01 Discharge of Indenture............................................................................50
SECTION 11.02 Deposited Moneys and U.S. Government Obligations to be Held in
Trust by Debenture Trustee........................................................................50
SECTION 11.03 Paying Agent to Repay Moneys Held.................................................................51
SECTION 11.04 Return of Unclaimed Moneys........................................................................51
SECTION 11.05 Defeasance Upon Deposit of Moneys or U.S. Government Obligations..................................51
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ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS...........................................................................................52
SECTION 12.01 Indenture and Securities Solely Corporate Obligations.............................................52
ARTICLE XIII
MISCELLANEOUS PROVISIONS.........................................................................................53
SECTION 13.01 Successors........................................................................................53
SECTION 13.02 Official Acts by Successor Corporation............................................................53
SECTION 13.03 Surrender of Corporation Powers...................................................................53
SECTION 13.04 Addresses for Notices, etc........................................................................53
SECTION 13.05 Governing Law.....................................................................................54
SECTION 13.06 Evidence of Compliance with Conditions Precedent..................................................54
SECTION 13.07 Business Days.....................................................................................54
SECTION 13.08 Trust Indenture Act to Control....................................................................54
SECTION 13.09 Table of Contents, Headings, etc..................................................................55
SECTION 13.10 Execution in Counterparts.........................................................................55
SECTION 13.11 Separability......................................................................................55
SECTION 13.12 Assignment........................................................................................55
SECTION 13.13 Acknowledgment of Rights..........................................................................55
ARTICLE XIV
PREPAYMENT OF SECURITIES; MANDATORY AND
OPTIONAL SINKING FUND............................................................................................56
SECTION 14.01 Special Event Prepayment..........................................................................56
SECTION 14.02 Optional Prepayment by Corporation................................................................56
SECTION 14.03 No Sinking Fund...................................................................................57
SECTION 14.04 Notice of Prepayment; Selection of Securities.....................................................57
SECTION 14.05 Payment of Securities Called for Prepayment.......................................................58
ARTICLE XV
SUBORDINATION OF SECURITIES......................................................................................59
SECTION 15.01 Agreement to Subordinate..........................................................................59
SECTION 15.02 Default on Senior Indebtedness....................................................................59
SECTION 15.03 Liquidation; Dissolution; Bankruptcy..............................................................60
SECTION 15.04 Subrogation.......................................................................................61
SECTION 15.05 Debenture Trustee to Effectuate Subordination.....................................................62
SECTION 15.06 Notice by the Corporation.........................................................................62
SECTION 15.07 Rights of the Debenture Trustee; Holders of Senior Indebtedness...................................63
SECTION 15.08 Subordination May Not Be Impaired.................................................................63
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ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD.............................................................................64
SECTION 16.01 Extension of Interest Payment Period..............................................................64
SECTION 16.02 Notice of Extension...............................................................................65
TESTIMONIUM
SIGNATURES
EXHIBIT A
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THIS INDENTURE, dated as of April 28, 1998, between Reliance Bancorp,
Inc., a Delaware corporation (hereinafter sometimes called the "Corporation"),
and The Bank of New York, a New York banking corporation, as debenture trustee
(hereinafter sometimes called the "Debenture Trustee").
W I T N E S S E T H :
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 1
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) Initial Capital
Securities; (vi) Exchange Capital Securities; (vii) Direct Action; (viii)
Initial Capital Securities Guarantee; (ix) Exchange Capital Securities
Guarantee; (x) Distributions; and (xi) Initial Purchasers. 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).
"Adjusted Treasury Rate" means, with respect to any prepayment date
pursuant to Section 14.01, the rate per annum equal to (i) the yield, under the
heading which represents the average for the immediately prior week, appearing
in the most recently published statistical release designated "H.15 (519)" or
any successor publication which is published weekly by the Federal Reserve and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Remaining Life (if no maturity is within
three months before or three months after the maturity corresponding to the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined, and the Adjusted
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding the
<PAGE>
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date, in each case calculated on the third Business Day
preceding the prepayment date, plus in each case (a) 2.15% if such prepayment
date occurs on or prior to April 28, 1999 and (b) 1.60% in all other cases.
"Affiliate" shall have the meaning given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"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-Entity 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 New York, New York 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 "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. References to "Capital
Securities" shall include collectively any Initial Capital Securities and
Exchange Capital Securities.
"Capital Securities Guarantee" shall mean any guarantee agreement that
the Corporation may enter into with The Bank of New York or other Persons that
operates directly or indirectly for the benefit of holders of Capital Securities
and shall include the Initial Capital Securities Guarantee and the Exchange
Capital Securities Guarantee with respect to the Initial Capital Securities and
the Exchange Capital Securities, respectively.
"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
2
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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" and rank PARI
PASSU with Capital 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 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 $.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.
"Comparable Treasury Issue" shall mean the United States Treasury
security selected by the Quotation Agent as having a maturity comparable to
the Remaining Life of the Securities that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life of the Securities, provided that if no United States Treasury security
has a maturity which is within a period from three months before to three
months after the Remaining Life, the two most closely corresponding United
States Treasury securities shall be used as the Comparable Treasury Issue,
and the Adjusted Treasury Rate shall be interpolated or extrapolated on a
straight-line basis, rounding to the nearest month, using such securities.
"Comparable Treasury Price" shall mean, with respect to any
prepayment date pursuant to Section 14.01, (i) the average of three Reference
Treasury Dealer Quotations for such prepayment date, after excluding the
highest and lowest Reference Treasury Dealer Quotations, or (ii) if the
Debenture Trustee obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Compounded Interest" shall have the meaning set forth in Section
16.01.
"Corporation" shall mean Reliance Bancorp, Inc., a Delaware
corporation, and, subject to the provisions of Article X, shall 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.
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"Compounded Interest" shall have the meaning set forth in Section
16.01.
"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 first paragraph hereof, and, subject to the provisions of
Article VI hereof, shall also include its successors and assigns as Debenture
Trustee hereunder.
"Declaration" shall mean the Amended and Restated Declaration of
Trust of the Trust, dated as of April 28, 1998, 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 same 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.
"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, another
clearing agency, or any successor registered as a clearing agency under 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 the liquidation 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.
"Exchange Offer" shall mean the offer that may be made pursuant to
the Registration Rights Agreement (i) by the Corporation to exchange the
Exchange Securities for the Initial Securities and to execute the Exchange
Capital Securities Guarantee in respect of the Exchange Capital Securities
and (ii) by the Trust to exchange the Exchange Capital Securities for the
Initial Capital Securities.
"Exchange Securities" shall mean the Corporation's 8.17% Junior
Subordinated Deferrable Interest Debentures due May 1, 2028, Series B, as
authenticated and issued under this Indenture.
4
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"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 the Indenture, which shall be registered in the name of the Depositary or
its nominee.
"Holding Company Capital Rules" shall mean the holding company level
capital adequacy guidelines of the Federal Reserve or similar guidelines.
"Indebtedness" shall mean (i) every obligation of the Corporation for
money borrowed; (ii) every obligation of the Corporation evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses; (iii)
every reimbursement obligation of the Corporation with respect to letters of
credit, banker's acceptances or similar facilities issued for the account of the
Corporation; (iv) every obligation of the Corporation issued or assumed as the
deferred purchase price of property or services (but excluding trade accounts
payable or accrued liabilities and accrued, unpaid interest to depositors
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 or winding-up or liquidation or
reorganization of the Corporation, and (ii) all other debt securities, and
guarantees in respect of those debt securities, issued to any 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
5
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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 May 1, 2008.
"Initial Securities" shall mean the Corporation's 8.17% Junior
Subordinated Deferrable Interest Debentures due May 1, 2028, Series A, as
authenticated and issued under this Indenture.
"Interest Payment Date" shall have the meaning set forth in Section
2.06(a).
"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 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.
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement and the Liquidated Damages Agreement.
"Liquidated Damages Agreement" shall mean the Liquidated Damages
Agreement, dated as of April 23, 1998, by and among the Corporation, the Trust
and the Initial Purchasers named therein, as such agreement may be amended,
modified or supplemented from time to time.
"Make Whole Amount" shall mean an amount equal to the greater of (x)
100% of the principal amount of Securities to be prepaid or (y) the sum, as
determined by a Quotation Agent, of the present values of the remaining
scheduled payments of principal and interest on such Securities, discounted to
the prepayment date on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Adjusted Treasury Rate, plus, in the case of
each of clauses (x) and (y), accrued and unpaid interest thereon, including
Compounded Interest and Additional Sums, if any, to the date of such prepayment.
"Maturity Date" shall mean May 1, 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.
6
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"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.
"Optional Prepayment Price" shall have the meaning set forth in Section
14.02(a).
"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 to
trusts other than the Trust to be established by the Corporation (if any), 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 cancelled 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 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.
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"Prepayment Price" shall mean the Special Event Prepayment Price or the
Optional Prepayment Price, as the context requires.
"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.
"Purchase Agreement" shall mean the Purchase Agreement, dated April 23,
1998, by and among the Corporation, the Trust and the Initial Purchaser named
therein.
"Quotation Agent" shall mean the Reference Treasury Dealer appointed by
the Corporation.
"Reference Treasury Dealer" shall mean a nationally recognized U.S.
Government securities dealer in New York, New York selected by the Corporation.
"Reference Treasury Dealer Quotations" shall mean, with respect to each
Reference Treasury Dealer and any prepayment date pursuant to Section 14.01, the
average, as determined by the Debenture Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Debenture Trustee by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such prepayment date.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of April 23, 1998, by and among the Corporation, the Trust
and the Initial Purchasers named therein, as such agreement may be amended,
modified or supplemented from time to time.
"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 April 28, 1998, 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) applied as if the
Debenture Issuer (or its successors) were a bank holding company for purposes of
capital adequacy guidelines of the Federal Reserve Board (or any successor
regulatory authority with jurisdiction over bank holding companies), or any
capital adequacy guidelines as then in effect and applicable to the Debenture
Issuer; 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 unless such liquidation shall have
occurred in connection with a Tax Event.
"Reliance Capital Trust" or the "Trust" shall mean Reliance 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.
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"Remaining Life" shall mean the term of the Securities from any
prepayment date pursuant to Section 14.01 to the Maturity Date.
"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 his or her knowledge of and familiarity with the
particular subject.
"Restricted Security" shall mean Securities that bear or are required
to bear the legends relating to transfer restrictions under the Securities Act
set forth in Exhibit A hereto.
"Rule 144A" shall mean Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Securities" shall mean, collectively, the Initial Securities and the
Exchange Securities.
"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 hereof.
"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 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 a Regulatory Capital Event or a Tax Event,
as the context requires.
"Special Event Prepayment Price" shall mean, with respect to any
prepayment of the Securities following a Special Event, an amount in cash equal
to the Make Whole Amount.
"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 or similar entity, at least a majority of whose outstanding partnership
or similar interests shall at the time be owned by such Person or by one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries and
(iii) any limited partnership of which such Person or any of its Subsidiaries is
a general partner. 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
9
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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 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 April 28, 1998, 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 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 Securities" shall mean, collectively, the Capital Securities and
the Common Securities.
"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 from 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 thereafter, within 15 days prior to
the end of each calendar year while this Indenture remains in effect (with
respect to the 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 New York, New York are then authorized or
obligated by law or executive order to remain closed.
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ARTICLE 2
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 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, $51,547,000 aggregate principal amount
of the Securities, except as provided in Sections 2.07, 2.08, 2.09 and 14.05.
The series of Securities to be initially issued hereunder shall be the Initial
Securities.
SECTION 2.03 FORM AND PAYMENT.
Except as provided in Section 2.05, the Securities shall be issued in
fully registered certificated form without interest coupons. Principal of and
premium, if any, 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 premium, if any, and
interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, 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 LEGENDS
(a) Except as permitted by subsection (b) of this Section 2.04 or as
otherwise determined by the Corporation in accordance with applicable law,
each Security shall bear the applicable legends
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relating to restrictions on transfer pursuant to the Securities Act and any
other applicable securities laws in substantially the form set forth on
Exhibit A hereto.
(b) In the event of an Exchange Offer, the Corporation shall issue and
the Debenture Trustee, upon Corporation Order, shall authenticate Exchange
Securities in exchange for Initial Securities accepted for exchange in the
Exchange Offer, which Exchange Securities shall not bear the legends
required by subsection (a) above, in each case unless the holder of such
Initial Securities is either (A) a broker-dealer who purchased such Initial
Securities directly from the Corporation for resale pursuant to Rule 144A or
any other available exemption under the Securities Act, (B) a Person
participating in the distribution of the Initial Securities or (C) a Person
who is an Affiliate of the Corporation or the Trust.
SECTION 2.05 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 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
cancelled, 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 cancelled.
(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
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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 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 cancelled 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 2.06 INTEREST.
(a) Each Security will bear interest at the rate of 8.17% 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 April 28, 1998, until the principal thereof becomes due and
payable, and at the Coupon Rate on any overdue principal (and premium, if
any) and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest, compounded
semi-annually, payable (subject to the provisions of Article XVI)
semi-annually in arrears on May 1 and November 1 of each year, commencing
November 1, 1998 (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 the 15th day of the month immediately preceding the month in which
the relevant Interest Payment Date falls.
(b) Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months.
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(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 2.07 TRANSFER AND EXCHANGE.
(a) Transfer Restrictions.
(i) The Initial Securities, and those Exchange Securities with
respect to which any Person described in Section 2.04(b)(A), (B) or (C)
is the beneficial owner, 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
restrictions and 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.
(ii) The Securities will be issued and may be transferred only in
blocks having an aggregate principal amount of not less than $100,000
and in multiples of $1,000 in excess thereof. Any attempted transfer of
the Securities in a block having an aggregate principal amount of less
than $100,000 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.
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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 premium, if any, and interest on such
Securities, and none of the Debenture Trustee, the Corporation and any agents of
the Debenture Trustee or the Corporation shall be affected by notice to the
contrary.
(c) Exchange of Initial Securities for Exchange Securities. The Initial
Securities may be exchanged for Exchange Securities pursuant to the terms of
the Exchange Offer. The Debenture Trustee shall make the exchange as
follows:
The Corporation shall present the Debenture Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the Exchange Securities, the transactions
contemplated by the Exchange Offer have been consummated; and
(B) the principal amount of Initial Securities properly tendered
in the Exchange Offer that are represented by a Global
Security, the principal amount of Initial Securities properly
tendered in the Exchange Offer that are represented by
Definitive Securities, the name of each holder of such
Definitive Securities, the principal amount properly tendered
in the Exchange Offer by each such holder and the name and
address to which Definitive Securities for Exchange Securities
shall be registered and sent for each such holder.
The Debenture Trustee, upon receipt of (i) such Officers' Certificate,
(ii) an Opinion of Counsel (x) to the effect that the Exchange Securities have
been registered under Section 5 of the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (y) with respect to the matters set
forth in Section 3(q) of the Registration Rights Agreement and (iii) a
Corporation Order, shall authenticate (A) a Global Security representing
Exchange Securities in aggregate principal amount equal to the aggregate
principal amount of Initial Securities represented by a Global Security
indicated in such Officers' Certificate as having been properly tendered and (B)
Definitive Securities representing Exchange Securities registered in the names
of, and in the principal amounts indicated in, such Officers' Certificate.
If the principal amount of the Global Security for the Exchange
Securities is less than the principal amount of the Global Security for the
Initial Securities, the Debenture Trustee shall make an endorsement on such
Global Security for Initial Securities indicating a reduction in the principal
amount represented thereby.
The Debenture Trustee shall deliver such Definitive Securities
representing Exchange Securities to the holders thereof as indicated in such
Officers' Certificate.
SECTION 2.08 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
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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.
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 2.09 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. 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 2.10 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 cancelled 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 2.11 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
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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) 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 2.12 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.
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ARTICLE 3
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 3.01 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
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 premium, if any, 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), Liquidated Damages, if any, on the dates and in the manner
required under the Registration Rights Agreement or the Liquidated Damages
Agreement 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 New York, New York 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 New York, New York 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 New York, New York
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
Corpo ration of its obligation to maintain any such office or agency in New
York, New York 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.
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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 provision
of this Section 3.04,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, 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 and premium or interest (including
Additional Sums and Compounded Interest, if any) and Liquidated
Damages, 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 and premium, if any, 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,
premium 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 and premium, if any, 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 held in
trust for such Securities by the Debenture Trustee or any paying agent
hereunder, as required by this Section 3.04, 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 in each year, 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 and the
nature thereof.
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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.
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), if at such time (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 such 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.
SECTION 3.08 COVENANTS AS TO RELIANCE CAPITAL TRUST.
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)
to otherwise continue to be classified as a grantor trust and
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not an association taxable as a corporation 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 termination of
the Trust, except as provided in the Declaration.
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, including commissions to the Initial Purchasers
payable pursuant to the Purchase Agreement, fees and expenses in connection
with any Exchange Offer, filing of a shelf registration statement or other
action to be taken pursuant to the Registration Rights Agreement and
Liquidated Damages Agreement 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
offering, sale and issuance of the Trust Securities (including commissions
to the Initial Purchasers 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 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,
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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 the date of such termination, removal or resignation.
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS BY THE
CORPORATION AND THE DEBENTURE TRUSTEE
SECTION 4.01 SECURITYHOLDERS' LISTS.
The Corporation covenants and agrees that it will furnish or cause to
be furnished to the Debenture Trustee:
(a) on a semi-annual 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
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(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 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
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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.
(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).
(e) So long as is required for an offer or sale of the Securities to
qualify for an exemption under Rule 144A under the Securities Act, the
Corporation shall, upon request, provide the information re quired by clause
(d)(4) thereunder to each Securityholder and to each beneficial owner and
prospective purchaser of Securities identified by each Securityholder of
Restricted Securities, unless such information is furnished to the
Commission pursuant to Section 13 or l5 (d) of the Exchange Act.
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 each May 1, following the date of this Indenture, commencing May
1, 1999, deliver to Securityholders a brief report, dated as of 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 5
REMEDIES OF THE DEBENTURE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
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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):
(a) default in the payment of any interest (including Compounded
Interest and Additional Sums, if any) or Liquidated Damages, 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 (or premium, if any, on)
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, 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.
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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.
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 Corpo ration 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) and Liquidated Damages, if any, on all the
Securities and the principal of and premium, if any, on any and all Securities
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, 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 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) and Liquidated Damages, 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 or premium, if any, on 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 and premium, if any, or
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interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, or both, as the case may be, with interest upon the
overdue principal and premium, if any, 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) and
Liquidated Damages, 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 the reasonable 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 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 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.
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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.
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 premium, if any) and interest (including
Compounded Interest and Additional Sums, if any) and Liquidated Damages, 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 premium, if any) 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
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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 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
premium, if any) and interest on (including Compounded Interest and Additional
Sums, if any) and Liquidated Damages, 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.
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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 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 premium, if any) or interest on (including Compounded
Interest and Additional Sums, if any) or Liquidated Damages, if any, on 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 premium, 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
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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.
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 premium, if any) or interest (including
Compounded Interest or Additional Sums, if any) or Liquidated Damages, 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 premium, if any) or
interest (including Compounded Interest and Additional Sums, if any) or
Liquidated Damages, if any, on any Security against the Corporation on or
after the same shall have become due and payable.
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ARTICLE 6
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 known to 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 known
to 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 known to
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 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 (which, other than in the case of Sections
5.01(a) and 5.01(b) hereof, is known to the
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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 man would exercise or use under the
circumstances in the conduct of his 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, Liquidated Damages
or Additional Sums) or 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 Trustee and the Authenticating Agent shall not be
accountable for the use or application by the
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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 OR 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 in the premises. 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 or collected by the Debenture
Trustee as such, except funds held in trust for the benefit of the holders of
particular Securities.
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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 10 million U.S. dollars ($10,000,000) 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.
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.
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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.
(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
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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.
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.
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In case at the time such successor to the Debenture Trustee shall
succeed to the trusts created by this Indenture any Securities shall have been
authenticated but not delivered, 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 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.
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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 7
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.
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,
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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 Section 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 premium, if any, 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.
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 which 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
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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 8
SECURITYHOLDERS' MEETINGS
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 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 New York, New York as the
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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
Securities 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 Milwaukee, Wisconsin 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
Security holders 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.
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 $1,000
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
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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. The holders of
the Initial Securities and the Exchange Securities shall vote for all purposes
as a single class.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE 9
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
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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 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.
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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 or premium
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 affecting 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 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
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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.
ARTICLE 10
CONSOLIDATION, MERGER, SALE, CONVEYANCE 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 premium, if any) 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
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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 CORPORATION TO BE SUBSTITUTED FOR CORPORATION.
In case of any such consolidation, merger, sale, conveyance, 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 premium, if any) 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 Reliance
Bancorp, Inc., 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 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 11
SATISFACTION AND DISCHARGE OF INDENTURE
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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 cancelled, or (b) all
the Securities not theretofore cancelled 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 cancelled or delivered to the Debenture Trustee
for cancellation, including principal (and premium, if any) and interest
(including Compounded Interest and Additional Sums, if any) and Liquidated
Damages, 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 premium, if any) or interest (including Compounded
Interest and Additional Sums, if any) or Liquidated Damages, 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.
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,
premium, if any, 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.
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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 premium, if any) or interest
(including Compounded Interest and Additional Sums, if any) or Liquidated
Damages, 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 premium, if any) or interest (including Compounded Interest and Additional
Sums, if any) or Liquidated Damages, 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:
(1) 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 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 and premium, if any, on
the outstanding Securities on the dates such installments of
principal, interest or premium are due;
(2) 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;
(3) no Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit;
and
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(4) 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
Corpora tion, shall execute proper instruments acknowledging the same), except
(A) the rights of holders of Securities to receive, from the trust fund
described in clause (1) above, payment of the principal of and the interest and
premium, if any, on the Securities when such payments are due; (B) the
Corporation's obligations with respect to the Securities under Sections 2.07,
2.08, 5.02 and 11.04; and (C) 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.
ARTICLE 12
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 premium, if any, or
interest (including Compounded Interest and Additional Sums, if any) or
Liquidated Damages, 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
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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 13
MISCELLANEOUS PROVISIONS
SECTION 13.01 SUCCESSORS.
All the covenants, stipulations, promises and agreements in this
Indenture contained by the Corporation shall bind its successors and assigns
whether so expressed or not.
SECTION 13.02 OFFICIAL ACTS BY SUCCESSOR CORPORATION.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
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, and thereupon such
power so surrendered shall terminate both as to the Corporation, as the case may
be, and as to any successor Person.
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 the
Corporation at 585 Stewart Avenue, Garden City, New York 11530-4701, Attention:
Administrative Trustee. 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 The Bank of New York, 101 Barclay Street - 21 West, New York, New York
10286, Attention: Corporate Trust Department (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.
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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.
SECTION 13.07 BUSINESS DAYS.
In any case where the date of payment of principal of (or premium, if
any) or interest on the Securities is not a Business Day, the payment of such
principal of (or premium, if any) or interest on the Securities will not be made
on such date but will be made on the next succeeding 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.
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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.
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 premium, if any) 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 premium, if any) 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.
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ARTICLE 14
PREPAYMENT OF SECURITIES; MANDATORY AND
OPTIONAL SINKING FUND
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 Special Event Prepayment Price.
Following a Special Event, the Corporation shall take such action as is
necessary to promptly determine the Special Event Prepayment Price, including,
without limitation, the appointment of a Quotation Agent. The Special Event
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 Special Event Prepayment Price by 10:00 a.m., New York
City time, on the date such Special Event 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 prices set forth below plus, in
each case, accrued and unpaid interest thereon (including Compounded Interest
and Additional Sums, if any) and Liquidated Damages, if any, to the applicable
date of prepayment (the "Optional Prepayment Price") if prepaid during the
12-month period beginning May 1 of the years indicated below.
<TABLE>
<CAPTION>
Percentage
Year of Principal
---- ------------
<S> <C>
2008 104.085%
2009 103.677%
2010 103.268%
2011 102.860%
2012 102.451%
2013 102.043%
2014 101.634%
2015 101.226%
2016 100.817%
2017 100.409%
2018 and thereafter 100.000%
</TABLE>
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
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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 $100,000 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 $100,000 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 $1,000 or integral multiples
thereof shall be prepaid. The Optional 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 Optional
Prepayment Price by 10:00 a.m., New York City time, on the date such Optional
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 Optional Prepayment Prices 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 that 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
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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 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 appropriate Prepayment Price, together with
interest accrued thereon to the date fixed for prepayment.
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 applicable Prepayment Price, together with interest
accrued thereon to the date fixed for prepayment (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, together with interest
accrued thereon to said date) interest (including Compounded Interest and
Additional Sums, if any) and Liquidated Damages, 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, together with
interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, accrued thereon to the date fixed for prepayment
(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.
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ARTICLE 15
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, premium, if any,
and interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, on all Securities issued hereunder shall, to the
extent and in the manner hereinafter set forth, be subordinated and junior in
right of payment to all Senior Indebtedness, whether outstanding at the date of
this Indenture or thereafter incurred.
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, then, in either case, no
payment shall be made by the Corporation with respect to the principal
(including prepayment payments) of (or premium, if any) or interest on the
Securities (including Compounded Interest and Additional Sums (if any) and
Liquidated Damages, 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 premium, if any) or interest on the
Securities (including Compounded Interest and Additional Sums (if any) and
Liquidated Damages, 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 such Senior Indebtedness (including any amounts due upon
acceleration).
In the event that, notwithstanding the foregoing, any payment shall be
received by the Debenture Trustee 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 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 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 amounts then due and owing on such Senior
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Indebtedness, and only the 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 such Senior
Indebtedness, before any payment is made by the Corporation on account of the
principal of (or premium, if any) or interest on the Securities (including Com
pounded Interest and Additional Sums (if any) and Liquidated Damages, 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 or winding-up or liquidation
or reorganization, any payment by the Corporation, or 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 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 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 before 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 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 Senior Indebtedness remaining unpaid to the
extent necessary to pay all 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
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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 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 premium, if any) 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 premium, if any) and interest (including Compounded Interest
and Additional Sums, if any) and Liquidated Damages, 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 the 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.
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
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Securityholders shall be entitled to conclusively rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Debenture
Trustee or to the Securityholders, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other in debtedness of the Corporation, as the case may be, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XV.
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.
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. Notwith
standing 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 premium, if any) or
interest (including Compounded Interest and Additional Sums, if any) and
liquidated Damages, 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
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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 and the Securityholders shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorgani zation, 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 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.
62
<PAGE>
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.
ARTICLE 16
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 10 consecutive
semiannual periods, including the first such semi-annual 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 Coupon Rate compounded semi-annually for each
semi-annual 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 10 consecutive semi-annual periods, including the first such semiannual
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.
63
<PAGE>
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, or (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.
(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 selection of such Extended Interest Payment Period
at least 10 Business Days before the earlier of (i) the next succeeding Interest
Payment Date, or (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 semi-annual 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 10
semi-annual periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.
The Bank of New York hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
64
<PAGE>
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.
RELIANCE BANCORP, INC.
By: /s/ Raymond A. Nielsen
--------------------------
Name: Raymond A. Nielsen
Title: President/Chief Executive Officer
THE BANK OF NEW YORK,
as Debenture Trusee
By: /s/ Iliana Acevedo
--------------------------
Name: Iliana Acevedo
Title: Assistant Treasurer
65
<PAGE>
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.]
[THIS 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 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 SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS 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 RELIANCE BANCORP, INC.
(THE "CORPORATION") OR ANY "AFFILIATE" OF THE CORPORATION WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE CORPORATION, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
A-1
<PAGE>
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF 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 THE
CORPORATION, AND (ii) PURSUANT TO CLAUSE (D) TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEREE TO THE CORPORATION. SUCH HOLDER FURTHER AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTAN TIALLY TO THE EFFECT OF THIS LEGEND.]
THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. ANY ATTEMPTED
TRANSFER OF SECURITIES IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS
THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE
DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF, PREMIUM (IF ANY) OR INTEREST ON
SUCH SECURITIES, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH SECURITIES.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF
ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER
OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY
ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT A PLAN OR PLAN ASSET
ENTITY OR (ii) THE ACQUISITION AND HOLDING OF THIS SECURITY BY IT IS NOT
PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR IS
EXEMPT FROM ANY SUCH PROHIBITION.
A-2
<PAGE>
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO BE BOUND
BY THE REGISTRATION RIGHTS AGREEMENT, DATED AS OF APRIL 23, 1998, BY AND AMONG
THE TRUST, THE DEBENTURE TRUSTEE AND THE INITIAL PURCHASERS NAMED THEREIN, AS
AMENDED FROM TIME TO TIME.
A-3
<PAGE>
RELIANCE BANCORP, INC.
CUSIP No.:
---------------
$-----------------
8.17% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE MAY 1, 2028, Series A
Reliance Bancorp, Inc., a Delaware 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 May 1, 2028 (the "Maturity Date"), unless previously
prepaid, and to pay interest on the outstanding principal amount hereof from
April 28, 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, semi-annually (subject to deferral as set forth herein) in arrears on May 1
and November 1 of each year, commencing November 1, 1998, at the rate of 8.17%
per annum until the principal hereof shall have become due and payable, and on
any overdue principal and premium, if any, and (without duplication and to the
extent that payment of such inter est is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum compounded
semi-annually ("Compounded Interest"). The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which the principal of (or premium,
if any) 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 (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. Pursuant to the Registration Rights
Agreement and the Liquidated Damages Agreement, in certain limited circumstances
the Corporation will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement and the Liquidated Damages Agreement) with respect
to this Security.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest installment, which shall be at the
close of business on the first day of the month in which the relevant Interest
Payment Date falls. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the holders on such regular
record date and may be paid to the Person in whose name this Security (or one or
more 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 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.
A-4
<PAGE>
The principal of (and premium, if any) and interest (including
Compounded Interest and Additional Sums, if any) and Liquidated Damages, if any,
on this Security shall be payable at the office or agency of the 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
Reliance Capital Trust I, the payment of the principal of (and premium, if any)
and interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, on this Security will be made at such place and to
such account as may be designated by 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 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-5
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed and sealed this ___ day of __________________, _____.
RELIANCE BANCORP, INC.
By:
Name:
Title:
Attest:
By:
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the 8.17% Junior Subordinated Deferrable Interest Debenture,
Series A of the Reliance Bancorp, Inc. referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK,
not in its individual capacity but solely as
Debenture Trustee
Dated: By:
Authorized Signatory
A-6
<PAGE>
(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 April 28,
1998 (the "Indenture"), duly executed and delivered between the Corporation and
The Bank of New York, 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 May 1, 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 Special Event Prepayment Price. "Special Event Prepayment Price"
shall mean, with respect to any prepayment of this Security following a Special
Event, an amount in cash equal to the Make Whole Amount. The "Make Whole Amount"
shall mean an amount equal to the greater of (i) 100% of the principal amount to
be prepaid or (ii) the sum, as determined by a Quotation Agent (as defined in
the Indenture), of the present values of remaining scheduled payments of
principal and interest hereon, discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate (as defined in the Indenture), plus, in the case
of each of clauses (i) and (ii), any accrued and unpaid interest (including
Compounded Interest and Additional Sums, if any) and Liquidated Damages, 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 prices set forth
below plus, in each case, accrued and unpaid interest (including Additional Sums
and Compounded Interest, if any) and Liquidated Damages, if any, thereon to the
applicable date of prepayment (the "Optional Prepayment Price"), if prepaid
during the 12-month period beginning May 1, of the years indicated below.
<TABLE>
<CAPTION>
Percentage
Year of Principal
---- ------------
<S> <C>
2008 104.085%
2009 103.677%
2010 103.268%
2011 102.860%
2012 102.451%
2013 102.043%
2014 101.634%
2015 101.226%
2016 100.817%
2017 100.409%
2018 and thereafter 100.000%
</TABLE>
A-7
<PAGE>
The Optional Prepayment Price or the Special Event Prepayment Price, as
the case requires, 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 applicable 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 $100,000 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 $100,000 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 $1,000 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.
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 or premium
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
A-8
<PAGE>
of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Securities or a
default in respect of any covenant or provision under which the Indenture cannot
be modified or amended without the consent of each holder of Securities then
outstanding. Any such consent or waiver by the holder of this Security (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future holders and owners of this Security and of any
Security issued in exchange herefor or in place hereof (whether by registration
of transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest (including Compounded Interest and Additional Sums, if any)
and Liquidated Damages, if any, on this Security at the time and place and at
the rate and in the money herein prescribed.
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 10 consecutive semi-annual periods,
including the first such semi-annual 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 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 10 consecutive semi-annual periods, including the first
semi-annual period during such Extended Interest Payment Period, (ii) shall not
end on any date other than an Interest Payment Date, and (iii) shall not extend
beyond the Maturity Date of the Securities. Upon the termination of any such
Extended Interest Payment Period and the payment of all accrued and unpaid
interest and any additional amounts then due, the 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 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
in shares of, or options, warrants or rights to subscribe for or purchase shares
of, Common Stock of the Corporation, (b) any
A-9
<PAGE>
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), if at such time (1) there shall have
occurred any event of which the Corporation has actual knowledge that (a) is, or
with the giving of notice or the lapse of time, or both, would constitute, an
Event of Default and (b) in respect of which the Corporation shall not have
taken reasonable steps to cure, (2) if such Securities are held by the Property
Trustee of Reliance 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.
Subject to (i) the Corporation having received any required regulatory
approvals and (ii) the Administrative Trustees of Reliance 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 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 $100,000 and multiples of $1,000 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 New York, New York 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 premium, if any,
and (subject to the Indenture) interest due hereon and for all other purposes,
and neither the Corporation nor the Debenture Trustee nor any
A-10
<PAGE>
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
premium, if any, or interest (including Compounded Interest and Additional Sums,
if any) or Liquidated Damages, 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-11
<PAGE>
EXHIBIT 4.2
8.17% JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURE, SERIES B
(FACE OF SECURITY)
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>
THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. ANY ATTEMPTED
TRANSFER OF SECURITIES IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS
THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE
DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF, PREMIUM (IF ANY) OR INTEREST ON
SUCH SECURITIES, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH SECURITIES.
A-2
<PAGE>
RELIANCE BANCORP, INC.
CUSIP No.:
-----------------
$-----------------
8.17% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE MAY 1, 2028, Series B
Reliance Bancorp, Inc., a Delaware 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 May 1, 2028 (the "Maturity Date"), unless
previously prepaid, and to pay interest on the outstanding principal amount
hereof from April 28, 1998, the date of original issuance of the Series A
Debenture or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided
for, semi-annually (subject to deferral as set forth herein) in arrears on
May 1 and November 1 with respect to this Series B Debenture or the Series A
Debenture exchanged for this Series B Debenture of each year, commencing May
1, 1999, at the rate of 8.17% per annum until the principal hereof shall have
become due and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at
the same rate per annum compounded semi-annually ("Compounded Interest"). The
amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any
date on which the principal of (or premium, if any) 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 (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 at the
close of business on the first day of the month in which the relevant Interest
Payment Date falls. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the holders on such regular
record date and may be paid to the Person in whose name this Security (or one or
more 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 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.
A-3
<PAGE>
The principal of (and premium, if any) 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
Reliance Capital Trust I, the payment of the principal of (and premium, if
any) and interest (including Compounded Interest and Additional Sums, if any)
and Liquidated Damages, if any, on this Security will be made at such place
and to such account as may be designated by 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 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-4
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed and sealed this ___ day of __________________, _____.
RELIANCE BANCORP, INC.
By:
----------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Attest:
By:
---------------------------------------
Name:
------------------------------
Title:
-----------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the 8.17% Junior Subordinated Deferrable Interest Debenture,
Series B of the Reliance Bancorp, Inc. referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK,
not in its individual capacity but solely as Debenture
Trustee
Dated: By:
--------------- ---------------------------------------
Authorized Signatory
A-5
<PAGE>
(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 April 28, 1998 (the
"Indenture"), duly executed and delivered between the Corporation and The Bank
of New York, 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 May 1, 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 Special Event Prepayment Price. "Special Event Prepayment
Price" shall mean, with respect to any prepayment of this Security following
a Special Event, an amount in cash equal to the Make Whole Amount. The "Make
Whole Amount" shall mean an amount equal to the greater of (i) 100% of the
principal amount to be prepaid or (ii) the sum, as determined by a Quotation
Agent (as defined in the Indenture), of the present values of remaining
scheduled payments of principal and interest hereon, discounted to the
prepayment date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined in the
Indenture), plus, in the case of each of clauses (i) and (ii), 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 prices set forth below plus,
in each case, accrued and unpaid interest (including Additional Sums and
Compounded Interest, if any) and Liquidated Damages, if any, thereon to the
applicable date of prepayment (the "Optional Prepayment Price"), if prepaid
during the 12-month period beginning May 1, of the years indicated below.
<TABLE>
<CAPTION>
Percentage
Year of Principal
---- ------------
<S> <C>
2008 104.085%
2009 103.677%
2010 103.268%
2011 102.860%
2012 102.451%
2013 102.043%
2014 101.634%
2015 101.226%
2016 100.817%
2017 100.409%
2018 and thereafter 100.000%
</TABLE>
A-6
<PAGE>
The Optional Prepayment Price or the Special Event Prepayment Price, as
the case requires, 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 applicable 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 $100,000 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 $100,000 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 $1,000 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.
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 or premium
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
A-7
<PAGE>
amount of the Securities at the time outstanding affected thereby, on
behalf of all of the holders of the Securities, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture, and its consequences, except a default in the payment
of the principal of or premium, if any, or interest on any of the Securities or
a default in respect of any covenant or provision under which the Indenture
cannot be modified or amended without the consent of each holder of Securities
then outstanding. Any such consent or waiver by the holder of this Security
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future holders and owners of this Security and of
any Security issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Corporation, which is absolute and unconditional, to pay the principal of
(and premium, if any) 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 10 consecutive semi-annual periods,
including the first such semi-annual 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 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 10 consecutive semi-annual periods, including the first
semi-annual period during such Extended Interest Payment Period, (ii) shall not
end on any date other than an Interest Payment Date, and (iii) shall not extend
beyond the Maturity Date of the Securities. Upon the termination of any such
Extended Interest Payment Period and the payment of all accrued and unpaid
interest and any additional amounts then due, the 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 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
<PAGE>
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 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 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), if at such time (1) there shall have
occurred any event of which the Corporation has actual knowledge that (a) is, or
with the giving of notice or the lapse of time, or both, would constitute, an
Event of Default and (b) in respect of which the Corporation shall not have
taken reasonable steps to cure, (2) if such Securities are held by the Property
Trustee of Reliance 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.
Subject to (i) the Corporation having received any required regulatory
approvals and (ii) the Administrative Trustees of Reliance 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 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 $100,000 and multiples of $1,000 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 New York, New York 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
A-9
<PAGE>
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 premium, if any,
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
premium, if any, 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-10
<PAGE>
EXHIBIT 4.3
Certificate of Trust
of
Reliance Capital Trust I
THIS CERTIFICATE OF TRUST of Reliance Capital Trust I (the "Trust"),
dated as of April 20, 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. Section 3801, et. seq.).
(a) Name. The name of the business trust being formed hereby is
Reliance Capital Trust I.
(b) Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
(c) Effective Date. This Certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK
not in its individual capacity but solely as trustee
By: /s/ Iliana Acevedo
------------------------------
Name: Iliana Acevedo
Title: Assistant Treasurer
THE BANK OF NEW YORK (DELAWARE)
not in its individual capacity but solely as trustee
By: /s/ Mary Jane Morrissey
------------------------------
Name: Mary Jane Morrissey
Title: Authorized Signatory
/s/ Raymond A. Nielsen
------------------------------
Name: Raymond A. Nielsen
not in his individual capacity but solely as trustee
/s/ Gerald M. Sauvigne
------------------------------
Name: Gerald M. Sauvigne
not in his individual capacity but solely as trustee
/s/ Paul D. Hagan
------------------------------
Name: Paul D. Hagan
not in his individual capacity but solely as trustee
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<PAGE>
EXHIBIT 4.4
Declaration of Trust
of
Reliance Capital Trust I
THIS DECLARATION OF TRUST, dated as of April 20, 1998 (this
"Declaration"), is by and among Reliance Bancorp, Inc., a Delaware
corporation, as sponsor (the "Sponsor"), and The Bank of New York, a New York
banking corporation, as trustee, The Bank of New York (Delaware), a Delaware
banking corporation, as trustee, and Raymond A. Nielsen, Gerald M. Sauvigne
and Paul D. Hagan, each as trustees (collectively, the "Trustees"). The
Sponsor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "Reliance Capital Trust
I" (the "Trust"), in which name the Trustees or the Sponsor, to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. Such amount shall constitute the initial trust estate.
It is the intention of the parties hereto that the Trust created hereby
constitute a business trust under Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C.Section 3801, et seq. (the "Business Trust Act"), and that
this document constitute the governing instrument of the Trust. The Trustees
are hereby authorized and directed to execute and file a certificate of trust
with the Delaware Secretary of State in such form as the Trustees may approve.
3. The Sponsor and the Trustees will enter into an amended and
restated Declaration, satisfactory to each such party and having
substantially the terms described in the Offering Memorandum (as defined
below), to provide for the contemplated operation of the Trust created hereby
and the issuance of the Capital Securities and Common Securities referred to
therein. Prior to the execution and delivery of such amended and restated
Declaration, the Trustees shall not have any duty or obligation hereunder or
with respect to the trust estate, except as otherwise required by applicable
law or as may be necessary to obtain prior to such execution and delivery any
licenses, consents or approvals required by applicable law or otherwise.
Notwithstanding the foregoing, the Trustees may take all actions deemed
proper as are necessary to effect the transactions contemplated herein.
4. The Sponsor, as the sponsor of the Trust, is hereby authorized (i)
to prepare and distribute one or more offering memoranda on behalf of the
Trust, including any necessary or desirable amendments thereto (including any
exhibits contained therein or forming a part thereof), relating to the
Capital Securities and Common Securities of the Trust and certain other
securities (each an "Offering Memorandum"); (ii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers
and documents as the Sponsor, on behalf of the Trust, may deem necessary or
desirable to register the Capital Securities under, or obtain for the Capital
Securities an exemption from, the securities or "Blue Sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or
desirable; (iii) to execute, deliver and perform on behalf of the Trust such
underwriting or purchase agreements with one or more underwriters, purchasers
or agents relating to the offering of the Capital Securities as the Sponsor,
on behalf of the Trust, may deem necessary or desirable; (iv) to execute and
deliver letters or documents to, or instruments for filing with, a depository
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<PAGE>
relating to the Capital Securities and Common Securities of the Trust; and
(v) to execute on behalf of the Trust any and all documents, papers and
instruments as may be desirable in connection with any of the foregoing. If
any filing referred to in clauses (ii) and (iv) above is required by law or
by the rules and regulations of any applicable governmental agency,
self-regulatory organization or other person or organization to be executed
on behalf of the Trust by the Trustees, the Trustees, in their capacities as
trustees of the Trust, are hereby authorized to join in any such filing and
to execute on behalf of the Trust any and all of the foregoing, it being
understood that the Trustees, in their capacities as trustees of the Trust,
shall not be required to join in any such filing or execute on behalf of the
Trust any such document unless required by law or by the rules and
regulations of any applicable governmental agency, self-regulatory
organization or other person or organization.
5. This Declaration may be executed in one or more counterparts.
6. The number of trustees of the Trust initially shall be five and
thereafter the number of trustees of the Trust shall be such number as shall
be fixed from time to time by a written instrument signed by the Sponsor
which may increase or decrease the number of trustees of the Trust; provided,
however, that to the extent required by the Business Trust Act, one trustee
of the Trust shall either be a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware. Subject to the foregoing, the
Sponsor is entitled to appoint or remove without cause any trustee of the
Trust at any time. Any trustee of the Trust may resign upon 30 days prior
notice to the Sponsor.
7. This Declaration shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without regard to conflict of laws
principles).
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration to
be duly executed as of the day and year first above written.
RELIANCE BANCORP, INC.,
as Sponsor
By: /s/ Raymond A. Nielsen
----------------------------------
Name: Raymond A. Nielsen
Title: President/Chief Executive Officer
THE BANK OF NEW YORK,
not in its individual capacity
but solely as trustee of the Trust
By: /s/ Iliana Acevedo
-----------------------------------
Name : Iliana Acevedo
Title: Assistant Treasurer
THE BANK OF NEW YORK (DELAWARE)
not in its individual capacity
but solely as trustee
/s/ Mary Jane Morrissey
-----------------------------------
Name: Mary Jane Morrissey
Title: Authorized Signatory
/s/ Raymond A. Nielsen
-----------------------------------
Name: Raymond A. Nielsen
not in his individual capacity but solely as
trustee
/s/ Gerald M. Sauvigne
-----------------------------------
Name: Gerald M. Sauvigne
not in his individual capacity but solely as
trustee
/s/ Paul D. Hagan
-----------------------------------
Name: Paul D. Hagan
not in his individual capacity but solely as
trustee
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<PAGE>
EXHIBIT 4.5
AMENDED AND RESTATED DECLARATION
OF TRUST
OF
RELIANCE CAPITAL TRUST I
Dated as of April 28, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions...................................................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.............................................................10
SECTION 2.2 Lists of Holders of Securities...............................................................10
SECTION 2.3 Reports by the Property Trustee..............................................................11
SECTION 2.4 Periodic Reports to Property Trustee.........................................................11
SECTION 2.5 Evidence of Compliance with Conditions Precedent.............................................11
SECTION 2.6 Events of Default; Waiver....................................................................11
SECTION 2.7 Default; Notice..............................................................................13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.........................................................................................14
SECTION 3.2 Office.......................................................................................14
SECTION 3.3 Purpose......................................................................................14
SECTION 3.4 Authority....................................................................................14
SECTION 3.5 Title to Property of the Trust...............................................................14
SECTION 3.6 Powers and Duties of the Administrative Trustees.............................................15
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.........................................18
SECTION 3.8 Powers and Duties of the Property Trustee....................................................19
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee..................................21
SECTION 3.10 Certain Rights of Property Trustee...........................................................23
SECTION 3.11 Delaware Trustee.............................................................................25
SECTION 3.12 Execution of Documents.......................................................................25
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.......................................25
SECTION 3.14 Duration of Trust............................................................................25
SECTION 3.15 Mergers......................................................................................26
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities......................................................28
SECTION 4.2 Responsibilities of the Sponsor..............................................................28
SECTION 4.3 Right to Proceed.............................................................................28
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 4.4 Right to Dissolve Trust......................................................................29
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee................................................29
SECTION 5.2 Delaware Trustee.............................................................................30
SECTION 5.3 Property Trustee; Eligibility................................................................30
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally............................................................................31
SECTION 5.5 Administrative Trustees......................................................................31
SECTION 5.6 Appointment, Removal and Resignation of Trustees.............................................32
SECTION 5.7 Vacancies among Trustees.....................................................................34
SECTION 5.8 Effect of Vacancies..........................................................................34
SECTION 5.9 Meetings.....................................................................................34
SECTION 5.10 Delegation of Power..........................................................................34
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business..................................35
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions................................................................................35
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities......................................................35
SECTION 7.2 Execution and Authentication.................................................................36
SECTION 7.3 Form and Dating..............................................................................37
SECTION 7.4 Registrar, Paying Agent and Exchange Agent...................................................38
SECTION 7.5 Paving Agent to Hold Money in Trust..........................................................39
SECTION 7.6 Replacement Securities.......................................................................39
SECTION 7.7 Outstanding Capital Securities...............................................................39
SECTION 7.8 Capital Securities in Treasury...............................................................40
SECTION 7.9 Temporary Securities.........................................................................40
SECTION 7.10 Cancellation.................................................................................41
SECTION 7.11 CUSIP Numbers................................................................................41
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.........................................................................41
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.......................................................................42
SECTION 9.2 Transfer Procedures and Restrictions.........................................................43
SECTION 9.3 Deemed Security Holders......................................................................53
SECTION 9.4 Book-Entry Interests.........................................................................53
SECTION 9.5 Notices to Clearing Agency...................................................................54
SECTION 9.6 Appointment of Successor Clearing Agency.....................................................54
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability....................................................................................54
SECTION 10.2 Exculpation..................................................................................54
SECTION 10.3 Fiduciary Duty...............................................................................55
SECTION 10.4 Indemnification..............................................................................56
SECTION 10.5 Outside Businesses...........................................................................59
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year..................................................................................59
SECTION 11.2 Certain Accounting Matters...................................................................59
SECTION 11.3 Banking......................................................................................60
SECTION 11.4 Withholding..................................................................................60
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments...................................................................................60
SECTION 12.2 Meetings of the Holders; Action by Written Consent...........................................62
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee...........................................64
SECTION 13.2 Representations and Warranties of Delaware Trustee...........................................64
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement; Liquidated Damages............................................65
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices......................................................................................66
SECTION 15.2 Governing Law................................................................................67
SECTION 15.3 Intention of the Parties.....................................................................67
SECTION 15.4 Headings.....................................................................................67
SECTION 15.5 Successors and Assigns.......................................................................67
SECTION 15.6 Partial Enforceability.......................................................................68
SECTION 15.7 Counterparts.................................................................................68
ANNEX I
TERMS OF CAPITAL AND COMMON SECURITIES.................................................................I-1
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE..................................................................A1-1
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE...................................................................A2-1
</TABLE>
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<PAGE>
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
</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.
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<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
RELIANCE CAPITAL TRUST I
Dated as of April 28, 1998
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of April 28, 1998, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued pursuant
to this Declaration;
WHEREAS, certain of the Trustees and the Sponsor established
Reliance Capital Trust I (the "Trust"), a trust created under the Delaware
Business Trust Act pursuant to a Declaration of Trust dated as of April 20, 1998
(the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on April 20, 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
in certain Debentures of the Debenture Issuer (each as hereinafter defined), and
engaging in only those activities necessary, advisable or incidental thereto;
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
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:
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<PAGE>
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.
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<PAGE>
"Business Day" means any day other than a Saturday or a
Sunday or a day on which banking institutions in New York, New York 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).
"Capital Security Certificate" has the meaning set forth
in Section 9.4.
"Capital Securities" means, collectively, the Series A
Capital Securities and the Series B Capital Securities.
"Capital Securities Guarantee" means, collectively, the
Series A Capital Securities Guarantee and the Series B Capital Securities
Guarantee.
"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 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 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 Time" means the "Closing Time" as defined in the
Purchase 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 Time, of Reliance Bancorp, Inc., in
respect of the Common Securities.
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<PAGE>
"Common Securities Subscription Agreement" means the
Common Securities Subscription Agreement, dated as of the Closing Time, between
the Trust and Reliance Bancorp, Inc., relating to the Common Securities.
"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 101 Barclay Street - 21 West, New
York, New York 10286.
"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 Reliance Bancorp, Inc., a
Delaware corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Subscription Agreement" means the Debenture
Subscription Agreement, dated as of the Closing Time, between the Debenture
Issuer and the Trust in respect of the Series Debentures.
"Debenture Trustee" means The Bank of New York, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means, collectively, the Series A Debentures
and the Series B Debentures.
"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.
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<PAGE>
"Event of Default" in respect of the Securities means an
Event of Default (as defined in the Indenture) that has occurred and is
continuing in respect of the Debentures.
"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 7.4.
"Exchange Offer" means the offer that may be made pursuant
to the Registration Rights Agreement (i) by the Trust to exchange Series B
Capital Securities for Series A Capital Securities and (ii) by the Debenture
Issuer to exchange Series B Debentures for Series A Debentures and to execute
the Series B Capital Securities Guarantee in respect of the Series B Capital
Securities.
"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).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Capital Security" has the meaning set forth in
Section 7.3(a).
"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
Time, 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.
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<PAGE>
"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.
"Liquidated Damages Agreement" means the Liquidated
Damages Agreement, dated as of April 23, 1998, by and among the Debenture
Issuer, the Trust and the Initial Purchaser named therein, as amended from time
to time.
"List of Holders" has the meaning set forth in Section
2.2(a).
"Majority in Liquidation Amount " means, with respect to
the Trust Securities, except as provided in the terms of the 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 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.
"Offering Memorandum" has the meaning set forth in Section
3.6(b)(i).
"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, 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 covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel,
who may be an employee of the Sponsor, and who shall be acceptable to the
Property Trustee.
"Participants" has the meaning specified in Section
7.3(b).
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"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, 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).
"Purchase Agreement" means the Purchase Agreement, dated
April 23, 1998, by and among the Trust, the Debenture Issuer and the Initial
Purchaser named therein.
"QIBs" shall mean qualified institutional buyers as
defined in Rule 144A.
"Quorum" means a majority of the Administrative Trustees
or, if there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of April 23, 1998, by and among the Trust, the
Debenture Issuer and the Initial Purchasers named therein, as amended from time
to time.
"Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Regulator 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.
"Restricted Definitive Capital Securities" has the meaning
set forth in Section 7.3(c).
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<PAGE>
"Restricted Capital Security" means a Capital Security
required by Section 9.2 to contain a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning set forth
in Section 9.2(i).
"Rule 3a-5" means Rule 3a-5 under the Investment Company
Act, or any successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as
such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as
such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Securities" or "Trust Securities" means the Common
Securities and the 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 Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in
Section 7.1(a).
"Series A Capital Securities Guarantee" means the Series A
Capital Securities Guarantee Agreement, dated as of the Closing Time, by
Reliance Bancorp, Inc., in respect of the Series A Capital Securities.
"Series A Debentures" means the 8.17% Junior Subordinated
Deferrable Interest Debentures due May 1, 2028, Series A, of the Debenture
Issuer issued pursuant to the Indenture.
"Series B Capital Securities" has the meaning specified in
Section 7.1(a).
"Series B Capital Securities Guarantee" means the Series B
Capital Securities Guarantee Agreement to be entered into in connection with the
Exchange Offer by Reliance Bancorp, Inc., in respect of the Series B Capital
Securities.
"Series B Debentures" means the 8.17% Junior Subordinated
Deferrable Interest Debentures due May 1, 2028, Series B, of the Debenture
Issuer to be issued pursuant to the Indenture in connection with the Exchange
Offer.
"Special Event" has the meaning set forth in Section 4(c)
of Annex I hereto.
"Special Event Redemption Price" has the meaning set forth
in Section 4(c) of Annex I hereto.
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"Sponsor" means Reliance Bancorp, Inc., a Delaware
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 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 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, 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.
"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.
"Trust Property" means (a) the 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.
"Unrestricted Global Capital Security" has the meaning set
forth in Section 9.2(b).
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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 which
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) within 14 days after each record
date for payment of 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 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 May 1 of each year, commencing May 1,
1999, the Property Trustee shall provide to the Holders of the 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.
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SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee 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
Capital Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the 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
(ii) requires the consent or vote of greater than a
majority in aggregate principal amount of the holders of
the 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 Capital
Securities that the relevant Super Majority represents of
the aggregate principal amount of the 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
Default shall cease to exist, and any Event of Default with respect to the
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 Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the 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
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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
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
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 Capital Securities and only the Holders of the 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 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
premium, if any) or interest (including Compounded Interest and Additional Sums
(as such terms are defined in the
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Indenture), if any) or Liquidated Damages (as defined in the Registration Rights
Agreement) on any of the 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,
Additional Sums and Liquidated Damages) 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
Capital Securities, the Administrative Trustees and the Sponsor, unless such
Event of Default shall have been cured or waived. The Sponsor and 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 "Reliance 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
Reliance Bancorp, Inc., 585 Stewart Avenue, Garden City, New York 11530. 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 Securities, (b) use the proceeds from the sale of the
Securities to acquire the 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
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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.
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the
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 shall have the exclusive
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 except
as contemplated in Section 7.1(a), (i) the Trust may issue no more than one
series of 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 Capital Securities and Common Securities at the Closing Time;
(b) in connection with the issue and sale of the Capital
Securities and the consummation of the Exchange Offer, at the direction of the
Sponsor, to:
(i) prepare and execute, if necessary, an offering
memorandum (the "Offering Memorandum") in preliminary and
final form prepared by the Sponsor, in relation to the
offering and sale of Series A Capital Securities to QIBs
in reliance on Rule 144A and to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act), and to execute and file with
the Commission, at such time as determined by the Sponsor,
any Registration Statement, including any amendments
thereto, as contemplated by the Registration Rights
Agreement;
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(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 Capital Securities in any State in which the
Sponsor has determined to qualify or register such Capital
Securities for sale;
(iii) execute and file an application, prepared by
the Sponsor, to permit the 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;
(iv) execute and deliver the Common Securities
Subscription Agreement, the Debenture Subscription
Agreement, letters, documents, or instruments with DTC and
other Clearing Agencies relating to the Capital
Securities; and
(v) 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 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, to acquire the Series A Debentures with the proceeds of
the sale of the Series A Capital Securities and the Common Securities and to
exchange the Series A Debentures for a like principal amount of Series B
Debentures, pursuant to the Exchange Offer; PROVIDED, HOWEVER, that the
Administrative Trustees shall cause legal title to the 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 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 of Capital Securities and Holders of Common Securities as
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;
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(h) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and 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 7.4 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 Holders of any notice received from the Debenture Issuer of its election
to defer payments of interest on the Debentures by extending the interest
payment period under the Indenture;
(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 to be classified
for United States federal income tax purposes as a grantor
trust; and
(iii) cooperating with the Debenture Issuer to
ensure that the Debentures will be treated as indebtedness
of the Debenture Issuer for United States federal income
tax purposes;
(p) to take all action necessary to consummate the
Exchange Offer or otherwise cause the Capital Securities to be registered
pursuant to an effective registration statement in accordance with the
provisions of the Registration Rights Agreement;
(q) 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
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(r) 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.
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. The Trust shall not:
(i) invest any proceeds received by the Trust from
holding the 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 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 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 Debentures shall be due and payable; or
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(viii) consent to any amendment, modification or
termination of the Indenture or the 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 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 Debentures shall vest automatically 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 Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right,
title and interest in the 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
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 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 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 Debentures to Holders upon the
occurrence of certain events.
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(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 and if the Property Trustee shall have failed to take such Legal Action, the
Holders of the Capital Securities may, to the fullest extent permitted by law,
take such Legal Action, to the same extent as if such Holders of Capital
Securities held an aggregate principal amount of Debentures equal to the
aggregate liquidation amount of such Capital Securities, without first
proceeding against 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
premium, if any, or interest (including Compounded Interest and Additional Sums,
if any) or Liquidated Damages, if any, on the Debentures on the date such
principal, premium, if any, or interest (including Compounded Interest and
Additional Sums, if any) or Liquidated Damages, if any, is otherwise payable (or
in the case of redemption, on the redemption date), then a Holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or premium, if any or interest (including
Compounded Interest and Additional Sums, if any) or Liquidated Damages, if any,
on the Debentures having a principal amount equal to the aggregate liquidation
amount of the Capital Securities of such Holder (a "Direct Action") on or after
the respective due date specified in the Debentures. In connection with such
Direct Action, the Holders of the Common Securities will be subrogated to the
rights of such Holder 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 preceding sentences, the Holders of Capital Securities
will not be able to exercise directly any other remedy available to the holders
of the 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 Debentures
under the Indenture and, if an Event of Default actually known to a Responsible
Officer occurs and is continuing, the Property Trustee shall, for the benefit of
Holders, enforce its rights as holder of the 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.
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(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.
(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, 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:
1. 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
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and in the Securities, and no implied covenants or
obligations shall be read into this Declaration
against the Property Trustee; and
2. in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Property Trustee and
conforming to the requirements of this 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 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 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
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(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.
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 here under 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
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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, 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 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 or
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 May 1, 2033.
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
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entirety to any Person, except as described in Section 3.15(b) and (c) and
except with respect to the distribution of 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:
1. expressly assumes all of the obligations of the
Trust under the Securities; or
2. 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
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
Capital Securities are then listed, quoted or included;
(iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause
the Capital Securities (including any Successor
Securities) or the Debentures to be downgraded by any
nationally recognized statistical rating organization that
publishes a rating on the Capital Securities or the
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 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;
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(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:
1. 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);
2. 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
3. following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or
lease, the Trust (or the Successor Entity) will
continue 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 Officer's 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 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.
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
At the Closing Time, 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.
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SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare the Offering Memorandum, in preliminary and
final form, and to prepare for filing by the Trust with the Commission any
Registration Statement, including any amendments thereto, as contemplated by the
Registration Rights Agreement;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Capital Securities and
to do any and all such acts, other than actions which must be taken by 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 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;
(d) 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
(e) to negotiate the terms of, execute, enter into and
deliver the Purchase Agreement, the Registration Rights Agreement and the
Liquidated Damages Agreement relating to the Capital Securities.
SECTION 4.3 RIGHT TO PROCEED.
The Sponsor acknowledges the rights of the Holders of
Capital Securities, in the event that a failure of the Trust to pay
Distributions on the Capital Securities is attributable to the failure of the
Debenture Issuer to pay the principal of or premium (if any) or interest on the
Debentures, to institute a proceeding directly against the Debenture Issuer for
enforcement of its payment obligations in respect of the Debentures.
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 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 Capital Securities to recognize gain or loss for
United States federal income tax purposes and (ii) any required regulatory
approvals.
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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.
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.
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The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
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
10 million U.S. dollars ($10,000,000), 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.
(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. 330(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 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:
The Bank of New York
101 Barclay Street - 21 West
New York, New York 10286
Attention: Corporate Trust Department
Telecopier: (212) 815-5915
Telephone: (212) 815-2588
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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:
Raymond A. Nielsen
Gerald M. Sauvigne
Paul D. Hagan
c/o Reliance Bancorp, Inc.
585 Stewart Avenue
Garden City, New York 11530
Telecopier: (516) 222-1805
Telephone: (516) 222-9300
(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 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.
(b) Unless otherwise required by the applicable law, any
Administrative Trustee acting alone is authorized to execute on behalf of the
Trust any documents which the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6.
(c) An 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 purposes of signing any documents which the
Administrative Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.6.
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
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(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 Capital Securities voting as a class at a
meeting of Holders of the Capital Securities.
(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 this 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.
(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:
1. 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
2. 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 Capital Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property
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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 and
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.
(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.
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, terminate 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
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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 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.
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), premium and/or principal on the Debentures held by the
Property Trustee or Liquidated Damages or any other payments pursuant to
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the Registration Rights Agreement or Liquidated Damages Agreement with respect
to the 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.
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 undivided preferred
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 Administrative Trustees shall on behalf of the Trust issue one
class of capital securities representing undivided preferred beneficial
interests in the Trust having such terms as set forth in Annex I (the "Series B
Capital Securities") in exchange for the Series A Capital Securities accepted
for exchange in the Exchange Offer, which Series B Capital Securities shall not
bear the legends required by Section 9.2(i) unless the Holder of such Series A
Capital Securities is either (A) a broker-dealer who purchased such Series A
Capital Securities directly from the Trust for resale pursuant to Rule 144A or
any other available exemption under the Securities Act, (B) a Person
participating in the distribution of the Series A Capital Securities or (C) a
Person who is an Affiliate of the Sponsor or the Trust. The Trust shall issue no
securities or other interests in the assets of the Trust other than the 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 non-assessable.
(d) Every Person, by virtue of having become a Holder or 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 EXECUTION AND AUTHENTICATION.
(a) The Securities shall be signed on behalf of the Trust
by an Administrative Trustee. In case any Administrative Trustee of the Trust
who shall have signed any of the Securities shall cease to be such
Administrative Trustee before the Securities so signed shall be delivered by the
Trust, such Securities nevertheless may be delivered as though the Person who
signed such Securities had not ceased to be such Administrative Trustee; and any
Securities may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the Administrative Trustees
of the Trust, although at the date of the execution and delivery of this
Declaration any such person was not an Administrative Trustee.
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(b) One Administrative Trustee shall sign the Capital
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by an Administrative Trustee on behalf of the Trust, such signature
shall, in the case of Common Securities, be a manual signature.
A Capital Security shall not be valid until authenticated
by the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration. A Common Security shall be valid upon
execution by an Administrative Trustee without any act of the Property Trustee.
Upon a written order of the Trust signed by one
Administrative Trustee, the Property Trustee shall authenticate the Capital
Securities for original issue. The aggregate number of Capital Securities
outstanding at any time shall not exceed the number set forth in Annex I hereto
except as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Capital Securities. An authenticating
agent may authenticate Capital Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee hereunder with respect to the Sponsor or an
Affiliate.
SECTION 7.3 FORM AND DATING.
The Capital Securities shall be evidenced by one or more
certificates substantially in the form of Exhibit A-1, and the Common Securities
shall be evidenced by one or more certificates substantially in the form of
Exhibit A-2. The Property Trustee's certificate of authentication shall be
substantially in the form set forth in Exhibit A-1. Certificates representing
the Securities may be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to an Administrative Trustee, as
evidenced by the execution thereof. The Securities may have letters, "CUSIP" or
other numbers, notations or other marks of identification or designation and
such legends or endorsements required by law, stock exchange rule, agreements to
which the Trust is subject, if any, or usage, PROVIDED THAT, any such notation,
legend or endorsement is in a form acceptable to the Administrative Trustees,
as evidenced by their execution thereof. The Trust at the direction of the
Sponsor, shall furnish any such legend not contained in Exhibit A-1 to the
Property Trustee in writing. Each Capital Security shall be dated the date of
its authentication. The terms and provisions of the Securities set forth in
Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are part
of the terms of this Declaration and, to the extent applicable, the Property
Trustee and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to such terms and provisions and to be bound thereby.
(a) GLOBAL CAPITAL SECURITY. Capital Securities offered
and sold to QIBs in reliance on Rule 144A, as provided in the Purchase
Agreement, shall be issued in the form of a single permanent global Capital
Security in definitive, fully registered form without distribution coupons with
the appropriate global legends and Restricted Securities Legend set forth in
Exhibit A-1 hereto (the "Global Capital Security"), which shall be deposited on
behalf of the purchasers of the Capital Securities represented thereby with the
Property Trustee, at its New York, New York office, as custodian for the
Clearing Agency, and registered in the name of the Clearing Agency or a nominee
of the Clearing Agency, duly executed by the Trust and authenticated by the
Property
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Trustee as hereinafter provided. The number of Capital Securities represented by
the Global Capital Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the Clearing Agency
or its nominee as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 7.3(b) shall apply
only to the Global Capital Security and such other Capital Securities in global
form as may be authorized by the Trust to be deposited with or on behalf of the
Clearing Agency.
An Administrative Trustee shall execute and the Property
Trustee shall, in accordance with this Section 7.3, authenticate and make
available for delivery initially a single Global Capital Security that (i) shall
be registered in the name of Cede & Co. or other nominee of such Clearing Agency
and (ii) shall be delivered by the Property Trustee to such Clearing Agency or
pursuant to such Clearing Agency's written instructions or, if no such written
instructions are received by the Property Trustee, held by the Property Trustee
as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with respect to the
Global Capital Security held on their behalf by the Clearing Agency or by the
Property Trustee as the custodian of the Clearing Agency or under such Global
Capital Security, and the Clearing Agency may be treated by the Trust, the
Property Trustee and any agent of the Trust or the Property Trustee as the
absolute owner of such Global Capital Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the Property Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Clearing Agency or impair, as between the Clearing Agency and its
Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in the
Global Capital Security.
(c) DEFINITIVE CAPITAL SECURITIES. Except as provided in
Section 7.9 or 9.2(f)(i), owners of beneficial interests in the Global Capital
Security will not be entitled to receive physical delivery of certificated
Capital Securities ("Definitive Capital Securities"). Purchasers of Securities
who are "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) and who are not QIBs will receive Capital Securities
in the form of individual certificates in definitive, fully registered form
without distribution coupons and with the Restricted Securities Legend set forth
in Exhibit A-1 hereto ("Restricted Definitive Capital Securities"); PROVIDED,
HOWEVER, that upon registration of transfer of such Restricted Definitive
Capital Securities to a QIB, such Restricted Definitive Capital Securities will,
unless the Global Capital Security has previously been exchanged, be exchanged
for an interest in the Global Capital Security pursuant to the provisions of
Section 9.2. Restricted Definitive Capital Securities will bear the Restricted
Securities Legend set forth on Exhibit A-1 unless removed in accordance with
this Section 7.3 or Section 9.2.
SECTION 7.4 REGISTRAR, PAYING AGENT AND EXCHANGE AGENT.
The Trust shall maintain in New York, New York (i) an
office or agency where Capital Securities may be presented for registration of
transfer ("Registrar"), (ii) an office or agency where 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 Capital Securities and of their transfer. The Trust may
appoint the Registrar,
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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 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 Capital Securities.
SECTION 7.5 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 7.6 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 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 7.7 OUTSTANDING CAPITAL SECURITIES.
The Capital Securities outstanding at any time are all the
Capital Securities authenticated by the Property Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
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If a Capital Security is replaced, paid or purchased
pursuant to Section 7.6 hereof, it ceases to be outstanding unless the Property
Trustee receives proof satisfactory to it that the replaced, paid or purchased
Capital Security is held by a bona fide purchaser.
If 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 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 7.8 CAPITAL SECURITIES IN TREASURY.
In determining whether the Holders of the required amount
of Securities have concurred in any direction, waiver or consent, 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 7.9 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 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
Capital 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 pursuant to Section 7.3 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 Securities.
(c) Any Global Capital Security that is transferable to
the beneficial owners thereof in the form of Definitive Capital Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in New York, New York 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. Any Definitive Capital Security delivered in exchange for an interest in
the Restricted Global Capital Security shall, except
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as otherwise provided by Sections 7.3 and 9.1, bear the Restricted Securities
Legend set forth in Exhibit A-l hereto.
(d) Subject to the provisions of Section 7.9(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 7.10 CANCELLATION.
The Trust at any time may deliver Capital Securities to
the Property Trustee for cancellation. The Registrar, Paying Agent and Exchange
Agent shall forward to the Property Trustee any Capital Securities surrendered
to them for registration of transfer, redemption, exchange or payment. The
Property Trustee shall promptly cancel all Capital Securities, surrendered for
registration of transfer, redemption, exchange, payment, replacement or
cancellation and shall dispose of cancelled Capital Securities in accordance
with its customary procedures unless the Trust otherwise directs. The Trust may
not issue new Capital Securities to replace Capital Securities that it has paid
or that have been delivered to the Property Trustee for cancellation or that any
Holder has exchanged.
SECTION 7.11 CUSIP NUMBERS.
The Trust in issuing the 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 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 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
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.
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;
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(iii) following the distribution of a Like Amount
of the 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, which opinion may
rely on public or private rulings of the Internal Revenue
Service, to the effect that the Holders of the 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
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
Debentures or at such time as no 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), 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.
(c) The provisions of Section 3.9 and Article X shall
survive the termination 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, 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 accor dance
with this Declaration shall be null and void.
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(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 termination 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 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) to otherwise continue to be classified as
a grantor trust for United States federal income tax purposes.
(d) The Registrar shall provide for the registration of
Capital Securities and of the transfer of Capital Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Registrar may require) in respect of any tax or other governmental charges that
may be imposed in relation to it. Upon surrender for registration of transfer of
any Capital Securities, an Administrative Trustee shall cause one or more new
Capital Securities to be issued in the name of the designated transferee or
transferees. Every Capital Security surrendered for registration of transfer
shall be accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Capital Security surrendered for registration of
transfer shall be delivered to the Registrar and canceled in accordance with
Section 7.10. A transferee of a Capital Security shall be entitled to the rights
and subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Capital Security. By acceptance of a Capital Security or any
interest therein, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 9.2 TRANSFER PROCEDURES AND RESTRICTIONS.
(a) General. Except as otherwise provided in Section
9.2(b), if Capital Securities are issued upon the transfer, exchange or
replacement of Capital Securities bearing the Restricted Securities Legend set
forth in Exhibit A-1 hereto, or if a request is made to remove such Restricted
Securities Legend on Capital Securities, the Capital Securities so issued shall
bear the Restricted Securities Legend, or the Restricted Securities Legend shall
not be removed, as the case may be, unless there is delivered to the Trust and
the Property Trustee such satisfactory evidence, which shall include an Opinion
of Counsel, as may be reasonably required by the Trust and the Property Trustee,
that neither the Restricted Securities Legend nor the restrictions on transfer
set forth therein are required to ensure that transfers thereof are made
pursuant to an exception from the registration requirements of the Securities
Act or, with respect to Restricted Capital Securities, that such Securities are
not "restricted" within the meaning of Rule 144. Upon provision of such satisfac
tory evidence, the Property Trustee, at the written direction of an
Administrative Trustee on behalf of the Trust, shall authenticate and deliver
Capital Securities that do not bear the legend.
(b) Transfers After Effectiveness of a Registration
Statement. After the effectiveness of a Registration Statement with respect to
any Capital Securities, all requirements pertaining to legends on such Capital
Securities will cease to apply (other than the legend requiring that transfers
of Capital Securities be made in blocks having an aggregate liquidation amount
of not less than $100,000), and beneficial interests in the Global Capital
Security without legends will be
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available to transferees of such Capital Securities, upon exchange of the
transferring Holder's Restricted Definitive Capital Security or directions to
transfer such Holder's beneficial interest in the Global Capital Security, as
the case may be. No such transfer or exchange of a Restricted Definitive Capital
Security or of an interest in the Global Capital Security shall be effective
unless the transferor delivers to the Property Trustee a certificate in a form
substantially similar to that attached hereto as the form of "Assignment" in
Exhibit A-1. Except as otherwise provided in Section 9.2(m), after the
effectiveness of a Registration Statement, an Administrative Trustee on behalf
of the Trust shall issue and the Property Trustee, upon a written order of the
Trust signed by one Administrative Trustee, shall authenticate a Global Capital
Security without the Restricted Securities Legend (the "Unrestricted Global
Capital Security") to deposit with the Clearing Agency to evidence transfers of
beneficial interests from the (i) Global Capital Security and (ii) Restricted
Definitive Capital Securities.
(c) Transfer and Exchange of Definitive Capital
Securities. When Definitive Capital Securities are presented to the Registrar or
co-registrar:
(x) to register the transfer of such Definitive Capital
Securities; or
(y) to exchange such Definitive Capital Securities which
became mutilated, destroyed, defaced, stolen or lost, for an equal
number of Definitive Capital Securities, the Registrar or co-registrar
shall register the transfer or make the exchange as requested if its
reasonable requirements for such transaction are met; provided,
however, that the Definitive Capital Securities surrendered for
registration of transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably
satisfactory to the Trust and the Registrar or
co-registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) in the case of Definitive Capital Securities
that are Restricted Definitive Capital Securities:
1. if such Restricted Capital Securities are being
delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, certification(s) from such Holder to that
effect; or
2. if such Restricted Capital Securities are being
transferred: (i) certification(s) in a form
substantially similar to that attached hereto as
the form of "Assignment" in Exhibit A-1, and (ii)
if the Trust or Registrar so requests, evidence
reasonably satisfactory to them as to the
compliance with the restrictions set forth in the
Restricted Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital
Security for a Beneficial Interest in the Global Capital Security. A Definitive
Capital Security may not be exchanged for a beneficial interest in the Global
Capital Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Capital Security, duly
endorsed
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or accompanied by appropriate instruments of transfer, in form satisfactory to
the Property Trustee, together with:
(i) if such Definitive Capital Security is a
Restricted Capital Security, certification(s) in a form
substantially similar to that attached hereto as the form
of "Assignment" in Exhibit A-1; and
(ii) whether or not such Definitive Capital
Security is a Restricted Capital Security, written
instructions directing the Property Trustee to make, or to
direct the Clearing Agency to make, an adjustment on its
books and records with respect to the Global Capital
Security to reflect an increase in the number of the
Capital Securities represented by such Global Capital
Security,
then the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of Capital
Securities represented by the Global Capital Security to be increased
accordingly. If the Global Capital Security is not then outstanding, an
Administrative Trustee on behalf of the Trust shall issue and the Property
Trustee shall authenticate, upon written order of any Administrative Trustee, a
new Global Capital Security representing an appropriate number of Capital
Securities.
(e) Transfer and Exchange of the Global Capital Security.
Subject to Section 9.2(f), the transfer and exchange of Global Capital Security
or beneficial interests therein shall be effected through the Clearing Agency in
accordance with this Declaration (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Clearing Agency therefor.
(f) Transfer of a Beneficial Interest in the Global
Capital Security for a Definitive Capital Security.
(i) Any Person having a beneficial interest in the
Global Capital Security may upon request, but only upon 20
days prior notice to the Property Trustee, and if
accompanied by the information specified below, exchange
such beneficial interest for a Definitive Capital Security
representing the same number of Capital Securities. Upon
receipt by the Property Trustee from the Clearing Agency
or its nominee on behalf of any Person having a beneficial
interest in the Global Capital Security of written
instructions or such other form of instructions as is
customary for the Clearing Agency or the Person designated
by the Clearing Agency as having such a beneficial
interest in a Restricted Capital Security and
certification(s) from the transferor in a form
substantially similar to that attached hereto as the form
of "Assignment" in Exhibit A-1, which may be submitted by
facsimile, then the Property Trustee will cause the
aggregate number of Capital Securities represented by the
Global Capital Security to be reduced on its books and
records and, following such reduction, the Trust will
execute and the Property Trustee will authenticate and
make available for delivery to the transferee a Definitive
Capital Security.
(ii) Definitive Capital Securities issued in
exchange for a beneficial interest in the Global Capital
Security pursuant to this Section 9.2(f) shall be
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registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to
instructions from its Clearing Agency Participants or
indirect participants or otherwise, shall instruct the
Property Trustee in writing-. The Property Trustee shall
deliver such Capital Securities to the Persons in whose
names such Capital Securities are so registered in
accordance with such instructions of the Clearing Agency.
(g) Restrictions on Transfer and Exchange of the Global
Capital Security. Notwithstanding any other provisions of this Declaration
(other than the provisions set forth in subsection (h) of this Section 9.2), the
Global Capital Security may not be transferred as a whole except by the Clearing
Agency to a nominee of the Clearing Agency or another nominee of the Clearing
Agency or by the Clearing Agency or any such nominee to a successor Clearing
Agency or a nominee of such successor Clearing Agency.
(h) Authentication of Definitive Capital Securities. If at
any time:
(i) a Default or an Event of Default has
occurred and is continuing,
(ii) the Trust, in its sole discretion, notifies
the Property Trustee in writing that it elects to cause
the issuance of Definitive Capital Securities under this
Declaration, or
(iii) 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,
then an Administrative Trustee on behalf of the Trust will execute, and the
Property Trustee, upon receipt of a written order of the Trust signed by one
Administrative Trustee requesting the authentication and delivery of Definitive
Capital Securities to the Persons designated by the Trust, will authenticate and
make available for delivery Definitive Capital Securities, equal in number to
the number of Capital Securities represented by the Global Capital Security, in
exchange for such Global Capital Security.
(i) Legend.
(i) Except as permitted by the following paragraph
(ii), each Capital Security Certificate evidencing the
Global Capital Security and each Definitive Capital
Security (and all Capital Securities issued in exchange
therefor or substitution thereof) shall bear a legend (the
"Restricted Securities Legend") in substantially the
following form:
THIS CAPITAL SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY
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STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES
LAW. NEITHER THIS CAPITAL 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 CAPITAL SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS
CAPITAL 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 RELIANCE BANCORP, INC. (THE
"CORPORATION") OR ANY "AFFILIATE" OF THE CORPORATION WAS
THE OWNER OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF
THIS CAPITAL SECURITY) ONLY (A) TO THE CORPORATION, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG
AS THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER
OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF RELIANCE
CAPITAL
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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 (ii) PURSUANT TO CLAUSE (D) TO REQUIRE
THAT THE TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE
TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE
OFFERING MEMORANDUM DATED APRIL 23, 1998. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE
HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT
AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR
OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, (THE "CODE") (EACH A "PLAN"), OR
AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR
HOLD THE CAPITAL SECURITIES OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASE OR HOLDER OF THE CAPITAL SECURITIES
OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS
NOT A PLAN OR PLAN ASSET ENTITY OR (ii) THE ACQUISITION
AND HOLDING OF THIS CAPITAL SECURITY BY IT IS NOT
PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE OR IS EXEMPT FROM ANY SUCH PROHIBITION.
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In all circumstances, each Capital Security Certificate shall bear the following
legend:
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF
NOT LESS THAN $100,000 (100 CAPITAL SECURITIES) AND
MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED
TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED
TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON SUCH
CAPITAL SECURITIES, AND SUCH PURPORTED TRANSFEREE SHALL BE
DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.
(ii) Upon any sale or transfer of a Restricted
Capital Security (including any Restricted Capital
Security represented by the Global Capital Security)
pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144:
1. in the case of any Restricted Capital Security
that is a Definitive Capital Security, the
Registrar shall permit the Holder thereof to
exchange such Restricted Capital Security for a
Definitive Capital Security that does not bear the
Restricted Securities Legend and rescind any
restriction on the transfer of such Restricted
Capital Security; and
2. in the case of any Restricted Capital Security
that is represented by the Global Capital Security,
the Registrar shall permit the Holder of such
Global Capital Security to exchange such Global
Capital Security for another Global Capital
Security that does not bear the Restricted
Securities Legend.
(j) Cancellation or Adjustment of Global Capital Security.
At such time as all beneficial interests in the Global Capital Security have
either been exchanged for Definitive Capital Securities to the extent permitted
by this Declaration or redeemed, repurchased or canceled in accordance with the
terms of this Declaration, such Global Capital Security shall be returned to the
Clearing Agency for cancellation or retained and canceled by the Property
Trustee. At any time prior to such cancellation, if any beneficial interest in
the Global Capital Security is exchanged for Definitive Capital Securities,
Capital Securities represented by such Global Capital Security shall be reduced
and an adjustment shall be made on the books and records of the Property Trustee
and the Clearing Agency or its nominee to reflect such reduction.
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(k) Obligations with Respect to Transfers and Exchanges of
Capital Securities.
(i) To permit registrations of transfers and
exchanges, the Trust shall execute and the Property
Trustee shall authenticate Definitive 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)
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 Capital
Securities for redemption and ending at the close of
business on the day of such mailing or (b) any Capital
Security so selected for redemption in whole or in part,
except the unredeemed portion of any Capital Security
being redeemed in part.
(iv) Prior to the due presentation for registration
of transfer of any 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
Capital Security is registered as the absolute owner of
such Capital Security for the purpose of receiving
Distributions on such 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.
(v) All 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 Capital Securities surrendered upon
such registration of transfer or exchange.
(l) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no
responsibility or obligation to any beneficial owner of
the Global Capital Security, 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 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 Capital Securities.
All notices and communications to be given to the Holders
and all payments to be made to Holders under the 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 beneficial owners in the
Global Capital Security shall be exercised only through
the Clearing Agency subject to
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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 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
Capital Security (including any transfers between or among
Clearing Agency Participants or beneficial owners in the
Global Capital Security) 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.
(m) Exchange of Series A Capital Securities for Series B
Capital Securities. The Series A Capital Securities shall be exchanged for
Series B Capital Securities pursuant to the terms of the Exchange Offer if the
following conditions are satisfied:
The Sponsor shall present the Property Trustee with an
Officers' Certificate certifying the following:
1. upon issuance of the Series B Capital
Securities, the transactions contemplated by the
Exchange Offer have been consummated; and
2. the number of Series A Capital Securities
properly tendered in the Exchange Offer that are
represented by the Global Capital Security and the
number of Series A Capital Securities properly
tendered in the Exchange Offer that are represented
by Definitive Capital Securities, the name of each
Holder of such Definitive Capital Securities, the
liquidation amount of Capital Securities properly
tendered in the Exchange Offer by each such Holder
and the name and address to which Definitive
Capital Securities for Series B Capital Securities
shall be registered and sent for each such Holder.
The Property Trustee, upon receipt of (i) such Officers'
Certificate, (ii) an Opinion of Counsel (x) to the effect that the Series B
Capital Securities and the Series B Capital Securities Guarantee have been
registered under Section 5 of the Securities Act and that this Declaration and
the Series B Capital Securities Guarantee have been qualified under the Trust
Indenture Act and (y) with respect to the matters set forth in Section 3(p) of
the Registration Rights Agreement, shall authenticate (A) the Global Capital
Security, executed and delivered by the Trust to the Property Trustee, for
Series B Capital Securities in aggregate liquidation amount equal to the
aggregate liquidation amount of Series A Capital Securities represented by the
Global Capital Security indicated in such Officers' Certificate as having been
properly tendered and (B) Definitive Capital Securities, executed and delivered
by the Trust to the Property Trustee, representing Series B Capital
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Securities registered in the names and in the liquidation amounts indicated in
such Officers' Certificate.
If, upon consummation of the Exchange Offer, less than all
the outstanding Series A Capital Securities shall have been properly tendered
and not withdrawn, the Property Trustee shall make an endorsement on the Global
Capital Security for Series A Capital Securities indicating the reduction in the
number and aggregate liquidation amount represented thereby as a result of the
Exchange Offer.
The Trust shall deliver such authenticated Definitive
Capital Securities for Series B Capital Securities to the Holders thereof as
indicated in such Officers' Certificate.
(n) Minimum Transfers. Series A Capital Securities and, if
and when issued, Series B Capital Securities may only be transferred in minimum
blocks of $100,000 aggregate liquidation amount. Any attempted transfer of
Series A Capital Securities or Series B Capital Securities in a block having an
aggregate liquidation amount of less than $100,000 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 Series A Capital Securities or Series B Capital
Securities for any purpose, including, but not limited to, the receipt of
Distributions on such Capital Securities, and such purported transferee shall be
deemed to have no interest whatsoever in such Capital Securities.
SECTION 9.3 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 9.4 BOOK-ENTRY INTERESTS.
The Global Capital Security shall initially be registered
on the books and records of the Trust in the name of Cede & Co., the nominee of
the Clearing Agency and no Capital Security Beneficial Owner will receive
physical delivery of a definitive Capital Security certificate (a "Capital
Security Certificate") representing such Capital Security Beneficial Owner's
interests in such Global Capital Security, except as provided in Section 9.2 and
Section 7.9. Unless and until Definitive Capital Securities have been issued to
the Capital Security Beneficial Owners pursuant to Section 9.2 or Section 7.9:
(a) the provisions of this Section 9.4 shall be in full
force and effect;
(b) the Trust and the Trustees shall be entitled to deal
with the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Capital Security and receiving approvals,
votes or consents hereunder) as the sole Holder of the Global Capital Security
and shall have no obligation to the Capital Security Beneficial Owners;
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(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants, and the
Clearing Agency shall receive and transmit payments of Distributions on the
Global Capital Security to such Clearing Agency Participants; provided, however,
that solely for the purposes of determining whether the Holders of the requisite
amount of Capital Securities have voted on any matter provided for in this
Declaration, the Trustees, with respect to the Global Capital Security, may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing Agency
setting forth the Capital Security Beneficial Owners' votes or assigning the
right to vote on any matter to any other Persons either in whole or in part; and
the Clearing Agency will also make book-entry transfers among the Clearing
Agency Participants.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the 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 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 Capital Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such 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.
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(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 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 as sets, 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,
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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
(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
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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 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 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
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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).
(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, claim or expense including taxes (other
than taxes based on the income of such Fiduciary Indemnified Person) 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 Dela ware 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
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herein, to reimburse the Property Trustee and the Delaware Trustee upon its or
their request for all reasonable expenses (including counsel 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.
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 statement 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
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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.
(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 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. 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:
1. 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
2. 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 shall not be required to sign any
such amendment; and
(iii) to the extent the result of such amendment
would be to:
1. cause the Trust to fail to continue to be
classified for purposes of United States federal
income taxation as a grantor trust;
2. reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the
Trust Indenture Act; or
3. 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 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;
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(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;
(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; and
(iii) to modify, eliminate or add any provisions of
the Declaration to such extent as shall be necessary to
enable the Trust or the Sponsor to conduct an Exchange
Offer in the manner contemplated by the Registration
Rights Agreement;
provided, however, that in the case of clauses (i) and (iii) 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 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 Certificates held by the Holders
exercising the right to
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call a meeting and only those Securities specified shall be counted 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 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 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 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.
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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 United States or the State
of New York, as the case may be, 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 New York 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 Wisconsin 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, a
national banking association or a bank or trust company, duly organized, validly
existing and in good standing under the laws of the United States or the State
of Delaware, as the case may be, with corporate power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of,
this Declaration;
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(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
REGISTRATION RIGHTS
SECTION 14.1 REGISTRATION RIGHTS AGREEMENT; LIQUIDATED DAMAGES.
The Holders of the Series A Capital Securities, the Series
A Debentures and the Series A Capital Securities Guarantee are entitled to the
benefits of the Registration Rights Agreement and the Liquidated Damages
Agreement. In certain limited circumstances set forth in the Registration Rights
Agreement and the Liquidated Damages Agreement, the Debenture Issuer shall be
required to pay liquidated damages with respect to the Debentures. Unless
otherwise stated, the term "Distribution," as used in this Declaration, includes
any and all liquidated damages.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 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:
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(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):
Reliance Capital Trust I
c/o Reliance Bancorp, Inc.
585 Stewart Avenue
Garden City, New York 11530
Telecopier: (516) 222-1805
Telephone: (516) 222-9300
Attention: Administrative Trustee
(b) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as Delaware Trustee may give
notice of to the Holders):
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
(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 Holders):
The Bank of New York
101 Barclay Street - 21 West
New York, New York 10286
Telecopier: (212) 815-5915
Telephone: (212) 815-2588
Attention: Corporate Trust Department
(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):
Reliance Capital Trust I
c/o Reliance Bancorp, Inc.
585 Stewart Avenue
Garden City, New York 11530
Telecopier: (516) 222-1805
Telephone: (516) 222-9300
(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
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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 15.2 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 15.3 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.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
SECTION 15.4 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 15.5 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 so expressed.
SECTION 15.6 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 15.7 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.
/s/ Raymond A. Nielsen
--------------------------
Raymond A. Nielsen
as Administrative Trustee
/s/ Gerald M. Sauvigne
--------------------------
Gerald M. Sauvigne
as Administrative Trustee
/s/ Paul D. Hagan
--------------------------
Paul D. Hagan
as Administrative Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Mary Jane Morrissey
--------------------------
Name: Mary Jane Morrissey
Title: Authorized Signatory
THE BANK OF NEW YORK
as Property Trustee
By: /s/ Iliana Acevedo
--------------------------
Name: Iliana Acevedo
Title: Assistant Treasurer
RELIANCE BANCORP, INC.
as Sponsor and Debenture Issuer
By: /s/ Raymond A. Nielsen
--------------------------
Name: Raymond A. Nielsen
Title: President/Chief Executive Officer
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ANNEX I
TERMS OF
8.17% CAPITAL SECURITIES, SERIES A/SERIES B
8.17% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of April 28, 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
Offering Memorandum referred to below in Section 2(c) of this Annex I):
1. Designation and Number.
(a) Capital Securities. 50,000 Series A Capital Securities of
the Trust and 50,000 Series B Capital Securities of the Trust, each series with
an aggregate liquidation amount with respect to the assets of the Trust of fifty
million dollars ($50,000,000), and each with a liquidation amount with respect
to the assets of the Trust of $1,000 per security, are hereby designated for the
purposes of identification only as "8.17% Capital Securities, Series A" and
"8.17% Capital Securities, Series B", respectively (collectively, the "Capital
Securities"). The certificates evidencing the 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 Capital Securities are listed, traded or
quoted.
(b) Common Securities. 1,547 Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
one million five hundred forty-seven thousand dollars ($1,547,000) and a
liquidation amount with respect to the assets of the Trust of $1,000 per
security, are hereby designated for the purposes of identification only as
"8.17% Common Securities" (collectively, 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 payable on each Security will be fixed at a
rate per annum of 8.17% (the "Coupon Rate") of the liquidation amount of $1,000
per Security (the "Liquidation Amount"), such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear additional Distributions
thereon compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). Pursuant to the Registration Rights Agreement, in certain
limited circumstances the Debenture Issuer will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement) with respect to the
Debentures. The term "Distributions," as used herein, includes distributions of
any and all such interest and Liquidated Damages, if any, payable unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the
A-1
<PAGE>
Debentures held by the Property Trustee and to the extent the Property Trustee
has funds legally available therefor.
(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 April 28, 1998 and will be payable
semi-annually in arrears on May 1 and November 1 of each year, commencing
November 1, 1998 (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 Debentures for a period not exceeding
10 consecutive semi-annual periods, including the first such semi-annual period
during such period (each an "Extension Period"), during which Extension Period
no interest shall be due and payable on the Debentures, provided that no
Extension Period shall end on a date other than an Interest Payment Date for the
Debentures or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions 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
Debentures) at the Coupon Rate compounded semi-annually during any such
Extension Period. Prior to the termination of any such Extension Period, the
Debenture Issuer may further defer payments of interest by further extending
such Extension Period, provided that such extension does not cause such
Extension Period, together with all such previous and further extensions within
such Extension Period, to exceed 10 consecutive semi-annual periods, including
the first semi-annual period during such Extension Period, end on a date other
than an Interest Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. 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 on the 15th day of the month immediately preceding the month
in which the relevant Distribution Date occurs, which Distribution Dates
correspond to the Interest Payment Dates for the 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 under the
heading "Description of Capital Securities -- Form, Denomination, Book-Entry
Procedures and Transfer" in the Offering Memorandum dated April 23, 1998 of the
Debenture Issuer and the Trust relating to the Securities and the 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 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), with the same force and effect as if made on such date.
A-2
<PAGE>
(d) 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 Administrative Trustees as expeditiously as the
Administrative 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 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 $1,000 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 Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such 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 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 (i) in the case of the repayment of the Debentures on the
Maturity Date, the Maturity Redemption Price (as defined below), (ii) in the
case of the optional prepayment of the Debentures prior to the Initial Optional
Redemption Date and upon the occurrence and continuation of a Special Event, the
Special Event Redemption Price (as defined below) and (iii) in the case of the
optional prepayment of the Debentures on or after the Initial Optional
Redemption Date, the Optional Redemption Price (as defined below). The Maturity
Redemption Price, the Special Event Redemption Price and the Optional Redemption
Price are referred to collectively as the "Redemption Price". Holders will be
given not less than 30 nor more than 60 days prior written notice of such
redemption.
(b) (i) The "Maturity Redemption Price," with respect to a
redemption of Securities, shall mean an amount equal to the principal of and
accrued and unpaid interest on the Debentures as of the Maturity Date thereof.
A-3
<PAGE>
(ii) 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 Debentures thereafter will be subject to optional redemption,
in whole, but not in part, on or after the Initial Optional Redemption Date.
The Debenture Issuer shall have the right (subject to the
conditions in the Indenture) to elect to redeem the Debentures, in whole or in
part, at any time on or after May 1, 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 Optional Redemption Price on a Pro
Rata basis. "Optional Redemption Price" shall mean a price equal to the
percentage of the liquidation amount of Securities to be redeemed plus
accumulated and unpaid Distributions thereon, if any, to the date of such
redemption if redeemed during the 12-month period beginning of May 1, the years
indicated below:
<TABLE>
<CAPTION>
Percentage of
Year Principal
---- ---------
<S> <C>
2008 104.085%
2009 103.677%
2010 103.268%
2011 102.860%
2012 102.451%
2013 102.043%
2014 101.634%
2015 101.226%
2016 100.817%
2017 100.409%
2018 and thereafter 100.000%
</TABLE>
(c) If at any time a Tax Event or a Regulatory Capital 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 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 Special
Event Redemption Price on a Pro Rata basis.
"Make-Whole Amount" shall mean an amount equal to the greater
of (x) 100% of the principal of Debentures or (y) the sum, as determined by a
Quotation Agent (as defined in the
A-4
<PAGE>
Indenture), of the present values of the remaining scheduled payments of
principal and interest on the Debentures, discounted to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate (as defined in the Indenture), plus, in the case
of each of clauses (x) and (y), accrued and unpaid interest thereon, if any, to
the date of redemption.
A "Tax Event" shall occur upon receipt by the Debenture Issuer
and the Trust of an opinion of counsel experienced in such matters to the effect
that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws or any regulations thereunder of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after April 28,
1998, 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 Debentures, (ii)
the interest payable by the Debenture Issuer on the 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.
"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 April 28,
1998, 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) applied as if the
Debenture Issuer (or its successors) were a bank holding company for purposes of
capital adequacy guidelines of the Federal Reserve Board (or any successor
regulatory authority with jurisdiction over bank holding companies), or any
capital adequacy guidelines as then in effect and applicable to the Debenture
Issuer; PROVIDED, HOWEVER, that the distribution of the Debentures in connection
with the liquidation of the Trust by the Debenture Issuer shall not in and of
itself constitute a Regulatory Capital Event unless such liquidation shall have
occurred in connection with a Tax Event.
"Special Event Redemption Price" shall mean, with respect to
any redemption of Securities following a Special Event, an amount in cash equal
to the Make-Whole Amount.
(d) On and from the date fixed by the Administrative 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 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
A-5
<PAGE>
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 semi-annual 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
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 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
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 (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 with respect to Holders that would
be required to hold less than 100 but more than zero Securities as a
result of such redemption, the Trust shall redeem Securities of each
such Holder so that after such redemption such Holder shall hold either
100 Securities or such Holder no longer holds any Securities, and shall
use such method (including, without limitation, by lot) as the Trust
shall deem fair and appropriate; PROVIDED, FURTHER, 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. In
respect of 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
Debentures by 10:00 a.m., New York City time, on the Maturity Date or
the date of
A-6
<PAGE>
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 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 on the close of business on a regular record date in respect of
a Distribution Date occurring on or prior to such Redemption Date.
Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of (i) any
Securities beginning on 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 in respect of any such delay). If payment
of the Redemption Price in respect of 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) in respect of Capital
Securities issued in book-entry form, the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee), (B) in
respect of Capital Securities issued in certificated form, to the
Holders thereof, and (C) in respect of 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.
A-7
<PAGE>
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 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 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 Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
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 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 Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will continue to be classified as a
grantor trust 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 premium, if any, or interest on the
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 premium, if any, or interest on a Like Amount
of Debentures (a "Direct Action") on or after the respective due date
specified in the Debentures. In connection with such Direct Action, the
Common Securities Holder will be subrogated to the rights of such Holder 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 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 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.
A-8
<PAGE>
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 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 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 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 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 Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
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 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 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 to be classified as a grantor
trust 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 premium, if any, or interest on the 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 premium, if any, or interest
A-9
<PAGE>
on a Like Amount of Debentures on or after the respective due date specified in
the Debentures. In connection with such Direct Action, the rights of the Common
Securities Holder will be subordinated to the rights of such Holder 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 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 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 Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration.
--------------------------
In addition to the requirements set out 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, (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 or (iii) to modify, eliminate or add any provisions of the
Declaration to such extent as shall be necessary to enable the Trust or the
Sponsor to conduct an Exchange Offer in the manner contemplated by the
Registration Rights Agreement; provided, however, that in each case (other than
an amendment pursuant to clause (ii) 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 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
A-10
<PAGE>
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 the
relevant 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
Securities held by the relevant 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 the relevant 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 other payments
to which they are entitled at such time.
10. Acceptance of Capital Securities Guarantee, Common Securities
Guarantee. Indenture and 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 Debentures, as
applicable, including the subordination provisions therein.
11. No Preemptive Rights.
The issuance of Capital Securities and the issuance of Common
Securities is not 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.
A-11
<PAGE>
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.]
[THIS CAPITAL 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 CAPITAL
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 CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL 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 RELIANCE
BANCORP, INC. (THE "CORPORATION") OR ANY "AFFILIATE" OF THE CORPORATION WAS THE
OWNER OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY)
ONLY (A) TO THE CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
A-1
<PAGE>
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF
RELIANCE 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 (ii) PURSUANT TO CLAUSE (D) TO REQUIRE THAT
THE TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY
IN THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM DATED APRIL 23, 1998. SUCH
HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.]
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF
ANY PLAN MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,
95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASE OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL BE
DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i)
IT IS NOT A PLAN OR PLAN ASSET ENTITY OR (ii) THE ACQUISITION AND HOLDING OF
THIS CAPITAL SECURITY BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE OR IS EXEMPT FROM ANY SUCH PROHIBITION.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL
SECURITIES) AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF
CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR
ANY
A-2
<PAGE>
PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON SUCH
CAPITAL SECURITIES, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
BE BOUND BY THE REGISTRATION RIGHTS AGREEMENT DATED AS OF APRIL 23, 1998, BY AND
AMONG THE TRUST, THE DEBENTURE TRUSTEE AND THE INITIAL PURCHASERS NAMED THEREIN,
AS AMENDED FROM TIME TO TIME.
A-3
<PAGE>
Certificate Number: Aggregate Liquidation
Amount: $
CUSIP Number:
Certificate Evidencing Capital Securities
of
Reliance Capital Trust I
8.17% Capital Securities, Series A
(liquidation amount $1,000 per Capital Security)
Reliance Capital Trust I, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby
certifies that ________________ (the "Holder") is the registered owner of
[$_________ in aggregate liquidation amount of Capital Securities of the Trust]
[the aggregate liquidation amount of Capital Securities of the Trust specified
in Schedule A hereto] (1) representing undivided preferred beneficial
interests in the assets of the Trust designated the 8.17% Capital Securities,
Series A (liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Capital Securities represented hereby are issued
and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust, dated as of April 28, 1998, as
the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Capital Securities as set forth in Annex I to
the Declaration. Capitalized terms used but not defined herein shall have the
meaning given them in the Declaration. The Sponsor will provide a copy of the
Declaration, the Capital Securities Guarantee and the Indenture (including
any supplemental indenture) to a Holder without charge upon written request
to the Trust at its principal place of business.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By acceptance hereof, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of indirect beneficial ownership in the
Debentures.
- --------
(1) Insert in Global Capital Securities only.
A-4
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this _______ day of , .
RELIANCE CAPITAL TRUST I
By:
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 8.17% Capital Securities, Series A of Reliance
Capital Trust I referred to in the within-mentioned Declaration.
Dated: ,
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Property Trustee
By:
Authorized Signatory
A-5
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed
at a rate per annum of 8.17% (the "Coupon Rate") of the liquidation amount of
$1,000 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one semi-annual period will bear interest thereon compounded semi-annually
at the Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions", as used herein, includes such cash distributions and any and
all such interest and Liquidated Damages, if any, payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds legally available therefor.
Distributions on the Capital Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or, if no Distributions have been paid, from April 28, 1998 and will be payable
semi-annually in arrears, on May 1 and November 1 of each year, commencing
November 1, 1998, 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 Debentures for a period not exceeding 10 consecutive calendar
semi-annual periods, including the first such semi-annual period during such
extension period (each an "Extension Period"), PROVIDED THAT no Extension Period
shall end on a date other than an Interest Payment Date for the Debentures or
extend beyond the Maturity Date of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Notwithstanding such deferral,
semi-annual Distributions will continue to accumulate with interest thereon (to
the extent permitted by applicable law, but not at a rate exceeding the rate of
interest then accruing on the Debentures) at the Coupon Rate compounded
semi-annually during any such Extension Period. Prior to the termination of any
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 10 consecutive semi-annual periods, including the
first semi-annual period during such Extension Period, (ii) end on a date other
than an Interest Payment Date for the Debentures or (iii) extend beyond the
Maturity Date of the Debentures. Payments of accumulated Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
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 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, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, the
Debentures to be distributed to the
A-6
<PAGE>
holders of the Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
A-7
<PAGE>
-----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
- -------------------------------------------------------------------------------:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------agent
to transfer this Capital Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date: ------------------------------
Signature: --------------------------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee: ----------------------------------------
- ---------------------------------
Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.
A-8
<PAGE>
[Include the following if the Capital Security bears a Restricted Securities
Legend] -
In connection with any transfer of any of the Capital Securities evidenced by
this Certificate, the undersigned confirms that such Capital Securities are
being:
CHECK ONE BOX BELOW
(1) / / exchanged for the undersigned's own account without
transfer; or
(2) / / transferred pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
(3) / / transferred to an institutional "accredited
investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act
of 1933 that is acquiring the Capital Securities for
its own account, or for the account of such an
institutional "accredited investor," for investment
purposes and not with a view to, or for offer or sale
in connection with, any distribution in violation of
the Securities Act of 1933; or
(4) / / transferred pursuant to another available exemption
from the registration requirements of the Securities
Act of 1933; or
(5) / / transferred pursuant to an effective registration
statement.
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Capital Securities evidenced by this Certificate in the name of any Person
other than the Holder hereof; PROVIDED, HOWEVER, that if box (3) or (4) is
checked, the Registrar may require, prior to registering any such transfer of
the Capital Securities, such legal opinions, certifications and other
information as the Trust has reasonably requested to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act; PROVIDED, FURTHER, that (i) if
box (2) is checked, by acceptance of this Certificate, the transferee shall be
deemed to have certified that it is a "qualified institutional buyer" (as
defined in Rule 144A) acquiring the Capital Securities for its own account or
for the account of another QIB over which it exercises sole investment
discretion and that it is aware that the Holder is relying upon the exemption
from registration afforded by Rule 144A in respect of the Holder's transfer of
Capital Securities to it or (ii) if box (3) is checked, the transferee must also
provide to the Registrar a Transferee Letter of Representation in the form
attached to the Offering Memorandum of the Trust dated April 23, 1998; PROVIDED,
FURTHER, that after the date that a registration statement has been filed and so
long as such Registration Statement continues to be effective, only then may the
Registrar permit transfers for which box (5) has been checked.
----------------------------------
Signature
A-9
<PAGE>
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 RELIANCE 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, (C) SO LONG AS THIS COMMON SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS COMMON SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF RELIANCE 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 (ii)
PURSUANT TO CLAUSE (D) TO REQUIRE THAT TRANSFEROR DELIVER TO THE TRUST A LETTER
FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING
MEMORANDUM DATED APRIL 23, 1998. 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.
A-1
<PAGE>
Certificate Evidencing Common Securities
of
Reliance Capital Trust I
8.17% Common Securities
(liquidation amount $1,000 per Common Security)
Reliance Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Reliance Bancorp, Inc. (the "Holder") is the registered owner of 1,547 common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 8.17% Common Securities (liquidation amount
$1,000 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 Trust of the Trust dated as of April 28, 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 Debentures as indebtedness and the
Common Securities as evidence of indirect beneficial ownership in the
Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this ________________ day of ________________, _____________________.
RELIANCE CAPITAL TRUST I
By:
------------------------------
Name:
Administrative Trustee
A-2
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of 8.17% (the "Coupon Rate") of the liquidation amount of
$1,000 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one semi-annual period will bear interest thereon compounded semi-annually
at the Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions", as used herein, includes such cash distributions and any and
all such interest and Liquidated Damages, if any, payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds 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 April 28, 1998 and will be payable
semi-annually in arrears, on May 1 and November 1 of each year, commencing
November 1, 1998, 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 Debentures for a period not exceeding 10 consecutive calendar
semi-annual periods, including the first such semi-annual period during such
extension period (each an "Extension Period"), provided that no Extension Period
shall end on a date other than an Interest Payment Date for the Debentures or
extend beyond the Maturity Date of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Notwithstanding such deferral,
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded semi-annually
during any such Extension Period. Prior to the termination of any 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 10 consecutive semi-annual periods, including the first
semi-annual period during such Extension Period, (ii) end on a date other than
an Interest Payment Date for the Debentures or (iii) extend beyond the Maturity
Date of the 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 Debentures to be
distributed to the holders of the Securities in liquidation of the Trust or,
simultaneously with any redemption of the 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.
A-3
<PAGE>
Under certain circumstances, the right 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.
A-4
<PAGE>
EXHIBIT 4.6
CAPITAL SECURITY CERTIFICATE, 8.17% CAPITAL SECURITIES, SERIES B
[FACE OF SECURITY]
THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE
MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF THE DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE
CLEARING AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER
OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A
WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE
OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE 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.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL
SECURITIES) AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF
CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR
ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON SUCH
CAPITAL SECURITIES, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
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Certificate Number:_________________ Aggregate Liquidation
Amount: $____________
CUSIP Number:___________
Certificate Evidencing Capital Securities
of
Reliance Capital Trust I
8.17% Capital Securities, Series B
(liquidation amount $1,000 per Capital Security)
Reliance Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of [$_________ in aggregate liquidation
amount of Capital Securities of the Trust representing undivided
preferred beneficial interests in the assets of the Trust designated the
8.17% Capital Securities, Series B (liquidation amount $1,000 per Capital
Security) (the "Capital Securities"). The Capital Securities are transferable
on the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer. The designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities represented hereby
are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust, dated as of April 28,
1998, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Capital Securities as set forth
in Annex I to the Declaration. Capitalized terms used but not defined herein
shall have the meaning given them in the Declaration. The Sponsor will
provide a copy of the Declaration, the Capital Securities Guarantee and the
Indenture (including any supplemental indenture) to a Holder without charge
upon written request to the Trust at its principal place of business.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By acceptance hereof, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of indirect beneficial ownership in the
Debentures.
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<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this _______ day of________________, _____.
RELIANCE CAPITAL TRUST I
By:
--------------------------------
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 8.17% Capital Securities, Series B of Reliance
Capital Trust I referred to in the within-mentioned Declaration.
Dated:____________ ______, _______
THE BANK OF NEW YORK,
not in its individual capacity but solely
as Property Trustee
By:
--------------------------------
Authorized Signatory
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[REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed
at a rate per annum of 8.17% (the "Coupon Rate") of the liquidation amount of
$1,000 per Capital Security, such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee. Distributions in arrears
for more than one semi-annual period will bear interest thereon compounded
semi-annually at the Coupon Rate (to the extent permitted by applicable law).
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
Debentures held by the Property Trustee and to the extent the Property
Trustee has funds legally available therefor.
Distributions on the Capital Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been
paid with respect to this Series B Capital Security or the Series A Capital
Security exchanged for this Series B Capital Security, if no Distributions
have been paid, from April 28, 1998 the date of original issuance of the
Series A Capital Securities and will be payable semi-annually in arrears, on
May 1 and November 1 of each year, commencing May 1, 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 Debentures for a period not exceeding 10 consecutive calendar semi-annual
periods, including the first such semi-annual period during such extension
period (each an "Extension Period"), PROVIDED THAT no Extension Period shall
end on a date other than an Interest Payment Date for the Debentures or
extend beyond the Maturity Date of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Notwithstanding such deferral,
semi-annual Distributions will continue to accumulate with interest thereon
(to the extent permitted by applicable law, but not at a rate exceeding the
rate of interest then accruing on the Debentures) at the Coupon Rate
compounded semi-annually during any such Extension Period. Prior to the
termination of any 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 10 consecutive
semi-annual periods, including the first semi-annual period during such
Extension Period, (ii) end on a date other than an Interest Payment Date for
the Debentures or (iii) extend beyond the Maturity Date of the Debentures.
Payments of accumulated Distributions will be payable to Holders as they
appear on the books and records of the Trust on the 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 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
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may, at the direction of the Sponsor, at any time dissolve the Trust and cause,
after satisfaction of liabilities to creditors of the Trust as provided by
applicable law, the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneously with any redemption of
the Debentures, cause a Like Amount of the Securities to be redeemed by the
Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
:
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- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
:
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
:
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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:
----------------------
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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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EXHIBIT 4.7
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SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
RELIANCE BANCORP, INC.
Dated as of ______________, 1998
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<PAGE>
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.........................................................6
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee....................................6
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee...............................6
SECTION 2.5 Evidence of Compliance with Conditions Precedent.......................................6
SECTION 2.6 Waiver of Events of Default............................................................7
SECTION 2.7 Notice of Events of Default............................................................7
SECTION 2.8 Conflicting Interests..................................................................7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee .........................7
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee.................................9
SECTION 3.3 Not Responsible for Recitals or Issuance of Series B Capital
Securities Guarantee..................................................................11
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility.....................................11
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee.....................................................................12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.............................................................................13
(i)
<PAGE>
Page
SECTION 5.2 Waiver of Notice and Demand...........................................................13
SECTION 5.3 Obligations Not Affected..............................................................13
SECTION 5.4 Rights of Holders.....................................................................14
SECTION 5.5 Guarantee of Payment..................................................................15
SECTION 5.6 Subrogation...........................................................................15
SECTION 5.7 Independent Obligations...............................................................15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions............................................................15
SECTION 6.2 Ranking...............................................................................16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...........................................................................16
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation...........................................................................17
SECTION 8.2 Compensation and Indemnification......................................................17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns................................................................18
SECTION 9.2 Amendments............................................................................18
SECTION 9.3 Notices...............................................................................18
SECTION 9.4 Benefit...............................................................................19
SECTION 9.5 Governing Law.........................................................................19
</TABLE>
(ii)
<PAGE>
CROSS REFERENCE TABLE
<TABLE>
<CAPTION>
Section of Trust
Indenture Act of Section of Guarantee
1939, as amended Agreement
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<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>
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* 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>
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
This SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Series B
Capital Securities Guarantee"), dated as of ______________, 1998, is executed
and delivered by Reliance Bancorp, Inc., a Delaware corporation (the
"Guarantor"), and The Bank of New York, a New York 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 B
Capital Securities (as defined herein) of Reliance 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 April 28, 1998, by and among the trustees of the
Issuer, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer (i) is
issuing on the date hereof 50,000 capital securities, having an aggregate
liquidation amount of $50,000,000, such capital securities being designated the
8.17% Capital Securities, Series B (collectively the "Series B Capital
Securities").
WHEREAS, as incentive for the Holders to exchange the Series A Capital
Securities for the Series B Capital Securities, the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth in this Series
B Capital Securities Guarantee, to pay the Guarantee Payments (as defined below)
to the Holders of the Series B Capital Securities, and the Guarantor agrees to
make certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor has executed and delivered a guarantee agreement
(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
Series A Capital Securities and the Series B Capital Securities to receive
Guarantee Payments under the Series A Capital Securities Guarantee and this
Series B Capital Securities Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Series B Capital Securities, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this Series B
Capital Securities Guarantee for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION
In this Series B Capital Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Series B Capital Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution of
this Series B Capital Securities Guarantee have the same meaning when used in
this Series B Capital Securities Guarantee unless otherwise defined in this
Series B Capital Securities Guarantee,
(c) a term defined anywhere in this Series B Capital Securities
Guarantee has the same meaning throughout;
(d) all references to "the Series B Capital Securities Guarantee" or
"this Series B Capital Securities Guarantee" are to this Series B Capital
Securities Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Series B Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this Series B Capital
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Series B Capital Securities Guarantee, unless otherwise defined in
this Series B Capital Securities Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" shall mean any day other than a Saturday or a Sunday, or
a day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
"Capital Securities Guarantee Trustee" shall mean The Bank of New York,
until a Successor Capital Securities Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Series B Capital
Securities Guarantee and thereafter means each such Successor Capital Securities
Guarantee Trustee.
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"Common Securities" shall mean the securities representing common
undivided beneficial interests in the assets of the Issuer.
"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 101 Barclay Street - 21 West, New York, New York 10286.
"Covered Person" shall mean any Holder or beneficial owner of Series B
Capital Securities.
"Debentures" shall mean the series of subordinated debt securities of
the Guarantor designated the 8.17% Junior Subordinated Deferrable Interest
Debentures due May 1, 2028, Series B, 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 B 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 B 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 B 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 B Capital Securities
called for redemption, and (iii) upon a voluntary or involuntary dissolution,
winding up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Series B Capital
Securities or in connection with the redemption of the Series B 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 B 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 Series B Capital Securities shall be paid in full
the Guarantee Payments to which they are entitled under this Series B Capital
Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Series B Capital Securities; PROVIDED, HOWEVER, that, in
determining whether the holders of the requisite percentage of Series B Capital
Securities have given any request, notice, consent or waiver
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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, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Capital Securities Guarantee Trustee.
"Indenture" shall mean the Indenture, dated as of April 28, 1998,
between Reliance Bancorp, Inc., as issuer of Debentures (the "Debenture
Issuer"), and The Bank of New York, 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 B Capital Securities"
shall mean, except as provided by the Trust Indenture Act, a vote by Holder(s)
of Series B 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 B Capital Securities.
"Officers' Certificate" shall mean, with respect to any person, a
certificate signed by the chairman, a vice chairman, the chief executive
officer, the president, an executive or senior vice president, a vice president,
the treasurer or an assistant treasurer of the Guarantor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Series B Capital Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(c) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" in the Common Securities Guarantee.
"Other Debentures" shall mean all junior subordinated debentures, other
than the Debentures and the Series B Debentures (as defined in the Indenture),
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 B
Capital Securities Guarantee and the Series A Capital Securities Guarantee, to
be issued by the Guarantor with respect
4
<PAGE>
to capital securities (if any) similar to the Series B 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.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of April 23, 1998, by and among the Guarantor, the Issuer
and the Initial Purchasers named therein, as such agreement may be amended,
modified or supplemented from time to time.
"Responsible Officer" shall mean, with respect to the Capital
Securities Guarantee Trustee, any officer within the Corporate Trust Office of
the Capital Securities Guarantee Trustee with direct responsibility for the
administration of this Series B Capital Securities Guarantee and also means,
with respect to a particular corporate trust matter, any other officer of the
Capital Securities Guarantee Trustee to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
"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 and Series B Capital Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION
(a) This Series B Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Series B Capital Securities Guarantee and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Series B Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
5
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SECTION 2.2 LISTS OF HOLDERS OF SECURITIES
(a) The Guarantor shall provide the Capital Securities Guarantee
Trustee (unless the Capital Securities Guarantee Trustee is otherwise the
registrar of the Capital Securities) with a list, in such form as the Capital
Securities Guarantee Trustee may reasonably require, of the names and addresses
of the Holders of the Series B Capital Securities ("List of Holders") as of such
date, (i) within fourteen (14) days after May 1 and November 1 of each year, and
(ii) at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Capital 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 on receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 REPORTS BY THE CAPITAL SECURITIES GUARANTEE TRUSTEE
Within 60 days after May 1 of each year, commencing May 1, 1999, the
Capital Securities Guarantee Trustee shall provide to the Holders of the Series
B 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 TO CAPITAL SECURITIES GUARANTEE
TRUSTEE
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such documents, reports and information as are required by Section 314 (if any)
and the compliance certificate required by Section 314 of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act. 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 B Capital Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers' Certificate.
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SECTION 2.6 WAIVER OF EVENTS OF DEFAULT
The Holders of a Majority in liquidation amount of Series B Capital
Securities may, by vote, on behalf of the Holders of all of the Series B 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 B Capital Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 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 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 B Capital Securities, notices of all such Events of
Default, unless such Events of Default have been cured before the giving of such
notice; PROVIDED, that, except in the case of an Event of Default arising from
the non-payment of any 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 B Capital Securities.
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received written notice, 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 B 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 B Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders of the
Series B Capital Securities, and the Capital Securities Guarantee Trustee shall
not transfer this Series B Capital Securities Guarantee to any Person except a
Holder of Series B Capital Securities exercising his or her rights pursuant to
Section
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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 B Capital
Securities Guarantee for the benefit of the Holders of the Series B Capital
Securities.
(c) The Capital Securities Guarantee 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 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 B Capital Securities
Guarantee, and no implied covenants or obligations shall be read into this
Series B 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 Securities Guarantee
Trustee shall exercise such of the rights and powers vested in it by this Series
B Capital Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Series B Capital Securities Guarantee shall be
construed to relieve the Capital Securities Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default (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 Capital Securities
Guarantee Trustee shall be determined solely by the express provisions
of this Series B Capital Securities Guarantee, and the Capital
Securities Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Series B Capital Securities Guarantee, and no implied
covenants or obligations shall be read into this Series B Capital
Securities Guarantee against the Capital Securities Guarantee Trustee;
and
(B) in the absence of bad faith on the part of the Capital
Securities Guarantee Trustee, the Capital Securities Guarantee Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Capital Securities Guarantee Trustee and
conforming to the
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requirements of this Series B 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 B
Capital Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer 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 action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of a
Majority in liquidation amount of the Series B Capital Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Capital Securities Guarantee Trustee, or
exercising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Series B Capital Securities Guarantee; and
(iv) no provision of this Series B Capital Securities
Guarantee shall require the Capital Securities Guarantee Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of
any of its rights or powers, if the Capital Securities Guarantee
Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the
terms of this Series B Capital Securities Guarantee or indemnity,
reasonably satisfactory to the Capital Securities Guarantee Trustee,
against such risk or liability is not reasonably assured to it.
SECTION 3.2 CERTAIN RIGHTS OF CAPITAL SECURITIES GUARANTEE
TRUSTEE
(a) Subject to the provisions of Section 3.1:
(i) the Capital Securities Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting,
upon any resolution, certificate, statement instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Series B Capital Securities Guarantee may be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this Series B Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall
deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securities
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the
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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 B Capital Securities
Guarantee from any court of competent jurisdiction;
(vi) the Capital Securities Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by
this Series B Capital Securities Guarantee at the request or direction
of any Holder, unless such Holder shall have provided to the Capital
Securities Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Capital Securities Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Capital Securities Guarantee Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Capital Securities Guarantee
Trustee, PROVIDED, HOWEVER, that nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Capital Securities Guarantee
Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Series B Capital
Securities Guarantee;
(vii) the Capital Securities Guarantee Trustee shall 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 B
Capital Securities, and the signature of the Capital Securities
Guarantee Trustee or its agents alone shall be sufficient and effective
to
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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 B Capital Securities Guarantee, both of which shall be
conclusively evidenced by the Capital Securities Guarantee Trustee's or
its agent's taking such action;
(x) whenever in the administration of this Series B Capital
Securities Guarantee the Capital Securities Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder, the Capital
Securities Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Series B Capital
Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions; 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 B Capital Securities Guarantee.
(b) No provision of this Series B Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Capital Securities Guarantee
Trustee shall be construed to be a duty.
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SERIES B
CAPITAL SECURITIES GUARANTEE
The recitals contained in this Series B Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Capital Securities Guarantee Trustee makes no representation as to the validity
or sufficiency of this Series B Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 CAPITAL SECURITIES GUARANTEE TRUSTEE; ELIGIBILITY
(a) There shall at all times be a Capital Securities Guarantee
Trustee that shall
(i) not be an Affiliate of the Guarantor; and
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(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 10 million U.S. dollars ($10,000,000), 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), 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.
(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
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of removal or resignation, the Capital Securities Guarantee Trustee resigning or
being removed may petition any court of competent jurisdiction for appointment
of a Successor Capital Securities Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Capital Securities Guarantee Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Capital Securities Guarantee Trustee.
(f) Upon termination of this Series B Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 GUARANTEE
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND
The Guarantor hereby waives notice of acceptance of this Series B
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 OBLIGATIONS NOT AFFECTED
The obligations, covenants, agreements and duties of the Guarantor
under this Series B Capital Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Series B Capital Securities to be
performed or observed by the Issuer;
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(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Series B Capital Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Series B Capital Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Series B Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Series B
Capital Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred;
(g) 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 B
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee in respect of this Series B Capital Securities Guarantee or
exercising any trust or power conferred upon the Capital Securities Guarantee
Trustee under this Series B Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to enforce this
Series B Capital Securities Guarantee, any Holder of Series B Capital Securities
may institute a legal proceeding directly against the Guarantor to enforce the
Capital Securities Guarantee Trustee's rights under this Series B Capital
Securities Guarantee, without first instituting a legal proceeding against the
Issuer, the Capital Securities Guarantee Trustee or any other person or entity.
The Guarantor waives any right or remedy to require that any action be brought
first against the Issuer or any other person or entity before proceeding
directly against the Guarantor.
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SECTION 5.5 GUARANTEE OF PAYMENT
This Series B Capital Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 SUBROGATION
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Series B Capital Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Series B Capital Securities
Guarantee; PROVIDED, HOWEVER, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
right that it may acquire by way of subrogation or any indemnity, reimbursement
or other agreement, in all cases as a result of payment under this Series B
Capital Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Series B Capital Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 INDEPENDENT OBLIGATIONS
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Series B
Capital Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Series
B Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 LIMITATION OF TRANSACTIONS
So long as any Capital Securities remain outstanding, the Guarantor
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Guarantor's capital stock, (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 B Capital Securities Guarantee and the Series A
Capital Securities Guarantee, (d) as a result of a reclassification of the
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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) if
at such time (l) there shall have occurred any event of which the Guarantor has
actual knowledge that (A) is, or with the giving of notice or the lapse of time,
or both, would be, an Event of Default and (B) in respect of which the Guarantor
shall not have taken reasonable steps to cure, (2) if such Debentures are held
by the Property Trustee, the Guarantor shall be in default with respect to its
payment of any obligations under this Series B Capital Securities Guarantee or
(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.
SECTION 6.2 RANKING
This Series B Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XV of the Indenture shall apply to the obligations of the Guarantor
under this Series B 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 and with the Series A
Capital Securities Guarantee, 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 B Capital Securities Guarantee shall terminate and be of no
further force and effect upon (i) full payment of the Redemption Price of all
Series B Capital Securities, or (ii) dissolution, winding up or termination 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
the Holders of the Trust Securities. Notwithstanding the foregoing, this Series
B Capital Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Series B Capital
Securities must restore payment of any sums paid under the Series B Capital
Securities or under this Series B Capital Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 EXCULPATION
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Series B
Capital Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Series B Capital Securities Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Series B 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, 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 B Capital Securities
Guarantee and shall survive the resignation or removal of the Capital Securities
Guarantee Trustee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS
All guarantees and agreements contained in this Series B 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 B Capital Securities then outstanding.
SECTION 9.2 AMENDMENTS
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Series B Capital Securities Guarantee may only be amended with
the prior approval of the Holders of a Majority in liquidation amount of the
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval. This
Series B 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 B Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Capital Securities Guarantee Trustee and the
Holders of the Series B Capital Securities):
Reliance Capital Trust I
c/o Reliance Bancorp, Inc.
585 Stewart Avenue
Garden City, New York 11530
Attention: Administrative Trustee
Telecopy: (516) 222-1805
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(b) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice of to
the Holders of the Series B Capital Securities):
The Bank of New York
101 Barclay Street - 21 West
New York, New York 10286
Attention: Corporate Trust Department
Telecopy: (212) 815-5915
(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 B Capital
Securities):
Reliance Bancorp, Inc.
585 Stewart Avenue
Garden City, New York 11530
Attention: Administrative Trustee
Telecopy:(516) 222-1805
(d) If given to any Holder of Series B Capital Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 BENEFIT
This Series B Capital Securities Guarantee is solely for the benefit of
the Holders of the Series B Capital Securities and, subject to Section 3.1(a),
is not separately transferable from the Series B Capital Securities.
SECTION 9.5 GOVERNING LAW
THIS SERIES B CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.
This Series B Capital Securities Guarantee is executed as of the day
and year first above written.
RELIANCE BANCORP, INC.,
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<PAGE>
as Guarantor
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Capital Securities Guarantee Trustee
By:
-----------------------------------
Name:
Title:
20
<PAGE>
EXHIBIT 4.8
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of April 23, 1998
by and among
RELIANCE BANCORP, INC.
RELIANCE CAPITAL TRUST I
and
SANDLER O'NEILL & PARTNERS, L.P.
and
KEEFE, BRUYETTE & WOODS, INC.
as Initial Purchasers
- --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of April 23, 1998 among RELIANCE BANCORP, INC., a Delaware
corporation (the "Company"), RELIANCE CAPITAL TRUST I, a business trust formed
under the laws of the state of Delaware (the "Trust"), SANDLER O'NEILL &
PARTNERS, L.P. ("Sandler O'Neill") and KEEFE, BRUYETTE & WOODS, INC. ("Keefe
Bruyette" and, together with Sandler O'Neill, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement
dated April 23, 1998 (the "Purchase Agreement"), among the Company, as issuer of
the 8.17% Junior Subordinated Deferrable Interest Debentures due May 1, 2028
Series A (the "Subordinated Debentures"), the Trust and the Initial Purchasers,
which provides for, among other things, the sale by the Trust to the Initial
Purchasers of 50,000 of the Trust's 8.17% Capital Securities, Series A,
liquidation amount $1,000 per Capital Security (the "Capital Securities"), the
proceeds of which will be used by the Trust, together with the proceeds from the
sale of the Trust's Common Securities to the Company, to purchase Subordinated
Debentures. The Capital Securities, together with the Subordinated Debentures
and the Company's guarantee agreement in respect of the Capital Securities (the
"Capital Securities Guarantee"), are collectively referred to as the
"Securities." In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company and the Trust have agreed to provide to the
Initial Purchasers and their direct and indirect transferees the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Additional Distributions" shall have the meaning set forth in
Section 2(e) hereof.
"Advice" shall have the meaning set forth in the last
paragraph of Section 3 hereof.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act or any successor rule thereunder.
"Applicable Period" shall have the meaning set forth in
Section 3(u) hereof.
"Business Day" means any day other than a Saturday, a Sunday,
or a day on which banking institutions in New York, New York are authorized or
required by law or executive order to remain closed.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble to
this Agreement and also includes the Company's successors and permitted assigns.
<PAGE>
"Declaration" or "Declaration of Trust" shall mean the Amended
and Restated Declaration of Trust of Reliance Capital Trust I, dated as of the
Closing Time, by the trustees named therein and the Company as sponsor.
"Debentures" shall collectively mean the Subordinated
Debentures and the Exchange Debentures.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Trust; PROVIDED, HOWEVER, that such depositary
must have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in
Section 2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"Exchange Offer" shall mean the offer by the Company and the
Trust to the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like amount of Exchange Securities pursuant
to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under
the Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all exhibits
thereto and all documents incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section
2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the
Subordinated Debentures, the 8.17% Junior Subordinated Deferrable Interest
Debentures due May 1, 2028, Series B (the "Exchange Debentures") containing
terms substantially identical to the Subordinated Debentures (except that they
will not contain terms with respect to the transfer restrictions under the
Securities Act (other than requiring minimum transfers thereof to be in blocks
of $100,000 aggregate principal amount) and will not provide for any Liquidated
Damages thereon), (ii) with respect to the Capital Securities, the Trust's 8.17%
Capital Securities, Series B, liquidation amount $1,000 per Capital Security
(the "Exchange Capital Securities") containing terms substantially identical to
the Capital Securities (except they will not contain terms with respect to
transfer restrictions under the Securities Act (other than requiring minimum
transfers thereof to be in blocks of $100,000 aggregate liquidation amount) and
will not provide for any increase in Additional Distributions thereon) and (iii)
with respect to the Capital Securities Guarantee, the Company's guarantee
agreement in respect of the Exchange Capital Securities (the "Exchange Capital
Securities Guarantee") containing terms substantially identical to the Capital
Securities Guarantee.
2
<PAGE>
"Holder" shall mean the Initial Purchasers, for so long as
either owns any Registrable Securities, and each of their respective successors,
assigns and direct and indirect transferees who become registered owners of
Registrable Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the
Subordinated Debentures and the Exchange Debentures, dated as of the Closing
Time, between the Company, as issuer, and The Bank of New York, as trustee, as
the same may be amended from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(o)
hereof.
"Issue Date" shall mean April 28, 1998, the date of original
issuance of the Securities.
"Liquidated Damages" shall have the meaning set forth in
Section 2(e) hereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities and Exchange
Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(u) hereof.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, limited liability corporation, or a
government or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section
2(a) hereof.
"Private Exchange Securities" shall have the meaning set forth
in Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all documents incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(o)
hereof.
3
<PAGE>
"Registrable Securities" shall mean the Securities and, if
issued, the Private Exchange Securities; PROVIDED, HOWEVER, that Securities or
Private Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as the case may
be, shall have been declared effective under the Securities Act and such
Securities or Private Exchange Securities, as the case may be, shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities or
Private Exchange Securities, as the case may be, shall have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the Securities Act or are eligible to be sold without
restriction as contemplated by Rule 144(k), (iii) such Securities or Private
Exchange Securities, as the case may be, shall have ceased to be outstanding or
(iv) with respect to the Securities, such Securities shall have been exchanged
for Exchange Securities upon consummation of the Exchange Offer and are
thereafter freely tradeable by the holder thereof (other than an Affiliate of
the Company).
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC or National Association of Securities
Dealers, Inc. (the "NASD") registration and filing fees, including, if
applicable, the fees and expenses of any "qualified independent underwriter"
(and its counsel) that is required to be retained by any Holder of Registrable
Securities in accordance with the rules and regulations of the NASD, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws (including reasonable fees and disbursements of one counsel for
all underwriters or Holders as a group in connection with blue sky qualification
of any of the Exchange Securities or Registrable Securities) and compliance with
the rules of the NASD, (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing, printing and distributing
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) the fees and disbursements of counsel for the Company
and of the independent certified public accountants of the Company, including
the expenses of any "cold comfort" letters required by or incident to the
performance of and compliance with this Agreement, (vi) the reasonable fees and
expenses of the Trustees and their counsel and any exchange agent or custodian,
and (vii) the reasonable fees and expenses of any special experts retained by
the Company in connection with any Registration Statement.
"Registration Statement" shall mean any registration statement
of the Company and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all documents incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of two years (or
such shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
4
<PAGE>
"Securities" shall have the meaning set forth in the preamble
to this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set
forth in Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company and the Trust pursuant to the provisions
of Section 2(b) hereof which covers all of the Registrable Securities or all of
the Private Exchange Securities, as the case may be, on an appropriate form
under Rule 415 under the Securities Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all documents incorporated by
reference therein.
"TIA" shall have the meaning set forth in Section 3(1) hereof.
"Trustees" shall mean any and all trustees under the
Declaration, the Indenture, the Capital Securities Guarantee or the Exchange
Capital Securities Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. Except as set forth in Section 2(b) below,
the Company and the Trust shall, for the benefit of the Holders, at the
Company's cost, use commercially reasonable efforts to (i) cause to be filed
with the SEC within 150 days after the Issue Date an Exchange Offer Registration
Statement on an appropriate form under the Securities Act relating to the
Exchange Offer, (ii) cause such Exchange Offer Registration Statement to be
declared effective under the Securities Act by the SEC not later than the date
which is 180 days after the Issue Date, and (iii) keep such Exchange Offer
Registration Statement effective for not less than 30 calendar days (or longer
if required by applicable law) after the date notice of the Exchange Offer is
mailed to the Holders. Promptly after the effectiveness of the Exchange Offer
Registration Statement, the Company and the Trust shall commence the Exchange
Offer, it being the objective of such Exchange Offer to enable each Holder
eligible and electing to exchange Registrable Securities for a like principal
amount of Exchange Debentures or a like liquidation amount of Exchange Capital
Securities, together with the Exchange Capital Securities Guarantee, as
applicable (provided that such Holder (w) is not an Affiliate of the Trust or
the Company, (x) is not a broker-dealer tendering Registrable Securities
acquired directly from the Trust or the Company, (y) acquires the Exchange
Securities in the ordinary course of such Holder's business and (z) has no
arrangements or understandings with any Person to participate in the Exchange
Offer for the purpose of distributing the Exchange Securities), to transfer such
Exchange Securities from and after their receipt without any limitations or
restrictions under the Securities Act and under state securities or blue sky
laws
5
<PAGE>
(other than requiring minimum transfers in blocks having an aggregate principal
or liquidation amount, as the case may be, of $100,000).
In connection with the Exchange Offer, the Company and the Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 30 days after the date notice thereof is mailed to the Holders (or
longer if required by applicable law) (such period referred to herein as the
"Exchange Period");
(iii) utilize the services of the Depositary for the Exchange Offer
with respect to Capital Securities represented by a global certificate;
(iv) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York City time, on the last Business Day of the
Exchange Period, by sending to the institution specified in the notice to
Holders, a telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the amount of Securities delivered for exchange and a
statement that such Holder is withdrawing his election to have such Securities
exchanged;
(v) notify each Holder that any Security not tendered by such Holder in
the Exchange Offer will remain outstanding and continue to accrue interest or
accumulate distributions, as the case may be, but will not retain any rights
under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws relating
to the Exchange Offer.
If either Initial Purchaser determines upon advice of its
outside counsel that it is not eligible to participate in the Exchange Offer
with respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial placement, as soon as practicable upon receipt by the
Company and the Trust of a written request from such Initial Purchaser, the
Company and the Trust, as applicable, shall issue and deliver to such Initial
Purchaser in exchange (the "Private Exchange") for the Securities held by such
Initial Purchaser a like liquidation amount of Exchange Capital Securities of
the Trust or, in the event the Trust is liquidated and Subordinated Debentures
are distributed, a like principal amount of the Exchange Debentures of the
Company, together with the Exchange Capital Securities Guarantee, in each case
that are identical (except that such securities may bear a customary legend with
respect to restrictions on transfer pursuant to the Securities Act) to the
Exchange Securities (the "Private Exchange Securities") and which are issued
pursuant to the Indenture or the Declaration (which provides that the Exchange
Securities will not be subject to the transfer restrictions set forth in the
Indenture or the Declaration, as applicable (other than requiring minimum
transfers in blocks having an aggregate principal or liquidation amount, as the
case may be, of $100,000), and that the Exchange Securities, the Private
Exchange Securities and the Securities will vote and consent together on all
matters as one class and that none of the Exchange
6
<PAGE>
Securities, the Private Exchange Securities or the Securities will have the
right to vote or consent as a separate class on any matter). The Private
Exchange Securities shall be of the same series as the Exchange Securities, and
the Company and the Trust will seek to cause the CUSIP Service Bureau to issue
the same CUSIP numbers for the Private Exchange Securities as for the Exchange
Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer
and, if applicable, the Private Exchange, the Company and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof tendered and
not validly withdrawn pursuant to the Exchange Offer or the Private Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee for
cancellation all Securities or portions thereof so accepted for exchange by the
Company and the Trust; and
(iii) issue, and cause the applicable Trustee under the Indenture or
the Declaration, as applicable, to promptly authenticate and deliver to each
Holder, new Exchange Securities or Private Exchange Securities, as applicable,
equal in principal amount to the principal amount of the Subordinated Debentures
or equal in liquidation amount to the liquidation amount of the Capital
Securities as are surrendered by such Holder, and will execute, and cause the
applicable Trustee to execute, the Exchange Capital Securities Guarantee.
Distributions on each Exchange Capital Security and interest
or distributions on each Exchange Debenture and Private Exchange Security issued
pursuant to the Exchange Offer and in the Private Exchange will accumulate or
accrue from the last date on which a distribution or interest was paid on the
Capital Security or the Subordinated Debenture surrendered in exchange therefor
or, if no distribution or interest has been paid on such Capital Security or
Subordinated Debenture, from the Issue Date. To the extent not prohibited by any
law or applicable interpretation of the staff of the SEC, the Company and the
Trust shall use commercially reasonable efforts to complete the Exchange Offer
as provided above, and shall comply with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions
other than the conditions referred to in Section 2(b)(i) and (ii) below and
those conditions that are customary in similar exchange offers. Each Holder of
Registrable Securities who wishes to exchange such Registrable Securities for
Exchange Securities in the Exchange Offer will be required to make certain
customary representations in connection therewith, including, in the case of any
Holder of Capital Securities, representations that (i) it is not an Affiliate of
the Trust or the Company, (ii) it is not a broker-dealer tendering Registrable
Securities acquired directly from the Trust or Company, (iii) the Exchange
Securities to be received by it were acquired in the ordinary course of its
business and (iv) at the time of the Exchange Offer, it has no arrangements or
understandings with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Capital Securities. The Company
and the Trust shall inform the Initial Purchasers, after consultation with the
applicable Trustees, of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders in order to facilitate the tender of Registrable Securities
in the Exchange Offer.
7
<PAGE>
Upon consummation of the Exchange Offer in accordance with
this Section 2(a), the provisions of this Agreement shall continue to apply,
MUTATIS MUTANDIS, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company and the Trust shall have no further obligation
to register the Registrable Securities (other than Private Exchange Securities)
held by any Holder pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the Company or
the Trust reasonably determine, after conferring with counsel (which may be
in-house counsel), that the Exchange Offer Registration provided in Section 2(a)
above is not available under applicable law and regulations and currently
prevailing interpretations of the staff of the SEC, (ii) the Company shall
determine in good faith that there is a reasonable likelihood that, or a
material uncertainty exists as to whether, consummation of the Exchange Offer
would result in (x) the Trust becoming subject to federal income tax with
respect to income received or accrued on the Debentures, (y) the interest
payable by the Company on the Debentures not being deductible by the Company for
United States federal income tax purposes or (z) the Trust becoming subject to
more than a DE MINIMIS amount of other taxes, duties or governmental charges,
(iii) the Exchange Offer Registration Statement is not declared effective within
180 days of the Issue Date or (iv) upon the request of either Initial Purchaser
with respect to any Registrable Securities held by it, if such Initial Purchaser
is not permitted, in the reasonable opinion of Thacher Proffitt & Wood, pursuant
to applicable law or applicable interpretations of the staff of the SEC, to
participate in the Exchange Offer and thereby receive securities that are freely
tradeable without restriction under the Securities Act and applicable blue sky
or state securities laws (any of the events specified in (i), (ii), (iii) or
(iv) being a "Shelf Registration Event," and the date of occurrence thereof, the
"Shelf Registration Event Date"), then in addition to or in lieu of conducting
the Exchange Offer contemplated by Section 2(a), as the case may be, the Company
and the Trust shall, at their cost, use commercially reasonable efforts to cause
to be filed as promptly as practicable after such Shelf Registration Event Date,
as the case may be, and, in any event, within 45 days after such Shelf
Registration Event Date (provided that in no event shall such filing date be
required to be earlier than 75 days after the Issue Date), a Shelf Registration
Statement providing for the sale by the Holders of all of the Registrable
Securities, and shall use commercially reasonable efforts to have such Shelf
Registration Statement declared effective by the SEC as soon as practicable. No
Holder of Registrable Securities shall be entitled to include any of its
Registrable Securities in any Shelf Registration pursuant to this Agreement
unless and until such Holder agrees in writing to be bound by all of the
provisions of this Agreement applicable to such Holder and furnishes to the
Company and the Trust in writing, within 15 days after receipt of a request
therefor, such information as the Company and the Trust may, after conferring
with counsel with regard to information relating to Holders that would be
required by the SEC to be included in such Shelf Registration Statement or
Prospectus included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Company and
the Trust all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
The Company and the Trust agree to use commercially reasonable
efforts to keep the Shelf Registration Statement continuously effective and
usable for resales for (a) the Rule 144(k)
8
<PAGE>
Period in the case of a Shelf Registration Statement filed pursuant to Section
2(b)(i), (ii) or (iii) or (b) 270 days in the case of a Shelf Registration
Statement filed pursuant to Section 2(b)(iv) (subject in each case to extension
pursuant to the last paragraph of Section 3 hereof), or for such shorter period
which will terminate when all of the Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or cease to be Registrable Securities (the "Effectiveness Period").
The Company and the Trust shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration. The Company and the Trust
will, in the event a Shelf Registration Statement is declared effective, provide
to each Holder a reasonable number of copies of the Prospectus which is a part
of the Shelf Registration Statement, notify each such Holder when the Shelf
Registration has become effective and take certain other actions as are required
to permit certain unrestricted resales of the Registrable Securities. The
Company and the Trust further agree, if necessary, to supplement or amend the
Shelf Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registrations, and the Company and the Trust
agree to furnish to the Holders of Registrable Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) Expenses. The Company, as issuer of the Subordinated
Debentures, shall pay all Registration Expenses in connection with any
Registration Statement filed pursuant to Section 2(a) and/or 2(b) hereof and
will reimburse the Initial Purchasers for the fees and disbursements of Thacher
Proffitt & Wood, counsel for the Initial Purchasers, incurred in connection with
the Exchange Offer and, if applicable, the Private Exchange, and either Thacher
Proffitt & Wood or any other single counsel designated in writing by the
Majority Holders to act as counsel for the Holders of the Registrable Securities
in connection with a Shelf Registration Statement, which other counsel shall be
reasonably satisfactory to the Company. Except as provided herein, each Holder
shall pay all expenses of its counsel, underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; PROVIDED, HOWEVER,
that if, after it has been declared effective, the offering of Registrable
Securities pursuant to such Exchange Offer Registration Statement or Shelf
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Exchange Offer Registration Statement or Shelf Registration Statement will be
deemed not to have been effective during the period of such interference, until
the offering of Registrable Securities pursuant to such Registration Statement
may legally resume. The Company and the Trust will be deemed not to have used
commercially reasonable efforts to cause the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, to become, or
to remain, effective during the requisite period if either of them voluntarily
takes any action that would result in any such Registration Statement not being
declared effective or that would result in the Holders of Registrable Securities
covered thereby not being able to exchange or
9
<PAGE>
offer and sell such Registrable Securities during that period, unless such
action is required by applicable law.
(e) Liquidated Damages and Additional Distributions.
In the event that:
(i) neither the Exchange Offer Registration Statement is filed with the
SEC on or prior to the 150th day after the Issue Date nor a Shelf Registration
Statement is filed with the SEC on or prior to the 45th day after the Shelf
Registration Event Date in respect of a Shelf Registration Event attributable to
any of the events set forth in Sections 2(b)(i), (ii) and (iii) (provided that
in no event shall such filing date be required to be earlier than 75 days after
the Issue Date), then commencing on the day after the applicable required filing
date, liquidated damages ("Liquidated Damages") shall accrue on the principal
amount of the Subordinated Debentures, and additional distributions ("Additional
Distributions") shall accumulate on the liquidation amount of the Trust
Securities (as such term is defined in the Declaration), each at a rate of 0.25%
per annum; or
(ii) neither the Exchange Offer Registration Statement is declared
effective by the SEC on or prior to the 180th day after the Issue Date nor a
Shelf Registration Statement is declared effective by the SEC on or prior to the
later of (A) the 40th day after the date such Shelf Registration Statement was
required to be filed and (B) the 180th day after the Issue Date, in respect of a
Shelf Registration Event attributable to any of the events set forth in Sections
2(b)(i), (ii) and (iii), then, commencing on the day after the applicable
required effectiveness date, Liquidated Damages shall accrue on the principal
amount of the Subordinated Debentures, and Additional Distributions shall
accumulate on the liquidation amount of the Trust Securities, each at a rate of
0.25% per annum; or
(iii) (A) the Trust has not exchanged Exchange Capital Securities for
all Capital Securities or the Company has not exchanged Exchange Debentures for
all Subordinated Debentures, validly tendered, or executed the Exchange Capital
Securities Guarantee in respect of the Exchange Capital Securities, in
accordance with the terms of the Exchange Offer on or prior to the 45th day
after the date on which the Exchange Offer Registration Statement was declared
effective or (B) if applicable, the Shelf Registration Statement in respect of a
Shelf Registration Event attributable to any of the events set forth in Sections
2(b)(i), (ii) and (iii) has been declared effective and such Shelf Registration
Statement ceases to be effective or usable for resales (whether as a result of
an event contemplated by Section 3(e) or otherwise) at any time prior to the
expiration of the Rule 144(k) Period (other than after such time as all
Securities have been disposed of thereunder or otherwise cease to be Registered
Securities), then Liquidated Damages shall accrue on the principal amount of
Subordinated Debentures, and Additional Distributions shall accumulate on the
liquidation amount of the Trust Securities, each at a rate of 0.25% per annum
commencing on (x) the 46th day after such effective date, in the case of (A)
above, or (y) the day such Shelf Registration Statement ceases to be effective
or usable for resales, in the case of (B) above;
PROVIDED, HOWEVER, that neither the Liquidated Damages rate on the Subordinated
Debentures, nor the Additional Distribution rate on the liquidation amount of
the Trust Securities, may exceed in the aggregate 0.25% per annum; PROVIDED,
FURTHER, HOWEVER, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2)
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upon the effectiveness of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Capital Securities and Exchange Debentures for all Capital
Securities and Subordinated Debentures validly tendered and execution of the
Exchange Capital Securities Guarantee (in the case of clause (iii)(A) above), or
at such time as the Shelf Registration Statement which had ceased to remain
effective or usable for resales again becomes effective and usable for resales
(in the case of clause (iii)(B) above), Liquidated Damages on the principal
amount of the Subordinated Debentures, and Additional Distributions on the
liquidation amount of the Trust Securities, as a result of such clause (or the
relevant subclause thereof) shall cease to accrue and accumulate, as the case
may be.
Any amounts of Liquidated Damages and Additional Distributions
due pursuant to Section 2(e)(i), (ii) or (iii) above will be payable in cash on
the next succeeding May 1 or November 1, as the case may be, to Holders on the
relevant record dates for the payment of interest and distributions pursuant to
the Indenture and the Declaration, respectively.
(f) Specific Enforcement. Without limiting the remedies
available to the Holders, the Company and the Trust acknowledge that any failure
by the Company or the Trust to comply with its obligations under Section 2(a)
and Section 2(b) hereof may result in material irreparable injury to the Holders
for which there is no adequate remedy at law, that it would not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, any Holder may obtain such relief as may be required to specifically
enforce the Company's and the Trust's obligations under Section 2(a) and Section
2(b) hereof.
(g) Distribution of Subordinated Debentures. Notwithstanding
any other provisions of this Agreement, in the event that Subordinated
Debentures are distributed to holders of Capital Securities in liquidation of
the Trust pursuant to the Declaration, (i) all references in this Section 2 and
in Section 3 to Securities, Registrable Securities and Exchange Securities shall
not include the Capital Securities and Capital Securities Guarantee or the
Exchange Capital Securities and Exchange Capital Securities Guarantee issued or
to be issued in exchange therefor in the Exchange Offer and (ii) all
requirements for any action to be taken by the Trust in this Section 2 and in
Section 3 shall cease to apply and all requirements for any action to be taken
by the Company in this Section 2 and in Section 3 shall apply to the
Subordinated Debentures and Exchange Debentures issued or to be issued in
exchange therefor in the Exchange Offer.
3. Registration Procedures. In connection with the obligations
of the Company and the Trust with respect to the Registration Statements
pursuant to Sections 2(a) and 2(b) hereof, the Company and the Trust shall use
commercially reasonable efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof within
the relevant time period specified in Section 2 hereof on the appropriate form
under the Securities Act, which form (i) shall be selected by the Company and
the Trust, (ii) shall, in the case of a Shelf Registration, be available for the
sale of the Registrable Securities by the selling Holders thereof and, in the
case of an Exchange Offer, be available for the exchange of Registrable
Securities, and (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
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required by the SEC to be filed therewith; and use commercially reasonable
efforts to cause such Registration Statement to become effective and remain
effective (and, in the case of a Shelf Registration Statement, usable for
resales) in accordance with Section 2 hereof; PROVIDED, HOWEVER, that if (1)
such filing is pursuant to Section 2(b), or (2) a Prospectus contained in an
Exchange Offer Registration Statement filed pursuant to Section 2(a) is required
to be delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Securities, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Company and the Trust
shall furnish to and afford the Holders of the Registrable Securities and each
such Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including copies
of any documents to be incorporated by reference therein and all exhibits
thereto) proposed to be filed. The Company and the Trust shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto in
respect of which the Holders must be afforded an opportunity to review prior to
the filing of such document if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing underwriters,
if any, shall reasonably object in a timely manner;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement effective for the Effectiveness Period or the
Applicable Period, as the case may be; and cause each Prospectus to be
supplemented, if so determined by the Company or the Trust or requested by the
SEC, by any required prospectus supplement and as so supplemented to be filed
pursuant to Rule 424 (or any similar provision then in force) under the
Securities Act, and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder applicable to
it with respect to the disposition of all securities covered by each
Registration Statement during the Effectiveness Period or the Applicable Period,
as the case may be, in accordance with the intended method or methods of
distribution by the selling Holders thereof described in this Agreement
(including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf Registration Statement,
at least three Business Days prior to filing, that a Shelf Registration
Statement with respect to the Registrable Securities is being filed and advising
such Holder that the distribution of Registrable Securities will be made in
accordance with the method selected by the Majority Holders; and (ii) furnish to
each Holder of Registrable Securities included in the Shelf Registration
Statement and to each underwriter of an underwritten offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, and any amendment or supplement thereto, and such
other documents as such Holder or underwriter may reasonably request, in order
to facilitate the public sale or other disposition of the Registrable
Securities; and (iii) consent to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of Registrable Securities
included in the Shelf Registration Statement in connection with the offering and
sale of the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(d) in the case of a Shelf Registration, register or qualify
the Registrable Securities under all applicable state securities or "blue sky"
laws of such jurisdictions by the time
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the applicable Registration Statement is declared effective by the SEC as any
Holder of Registrable Securities covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Securities shall
reasonably request in writing in advance of such date of effectiveness, and do
any and all other acts and things which may be reasonably necessary or advisable
to enable such Holder and underwriter to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder; PROVIDED,
HOWEVER, that the Company and the Trust shall not be required to (i) qualify as
a foreign corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d), (ii) file
any general consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not then so subject;
(e) (1) in the case of a Shelf Registration or (2) if
Participating Broker-Dealers from whom the Company or the Trust has received
prior written notice that they will be utilizing the Prospectus contained in the
Exchange Offer Registration Statement as provided in Section 3(u) hereof, are
seeking to sell Exchange Securities and are required to deliver Prospectuses,
promptly notify each Holder of Registrable Securities, or such Participating
Broker-Dealers, as the case may be, their counsel and the managing underwriters,
if any, and promptly confirm such notice in writing (i) when a Registration
Statement has become effective and when any post-effective amendments thereto
become effective, (ii) of any request by the SEC or any state securities
authority for amendments and supplements to a Registration Statement or
Prospectus or for additional information after the Registration Statement has
become effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the qualification of the Registrable Securities or the Exchange
Securities to be offered or sold by any Participating Broker-Dealer in any
jurisdiction described in paragraph 3(d) hereof or the initiation of any
proceedings for that purpose, (iv) in the case of a Shelf Registration, if,
between the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warranties of the Company and the Trust contained in any purchase agreement,
securities sales agreement or other similar agreement cease to be true and
correct in all material respects, (v) of the happening of any event or the
failure of any event to occur or the discovery of any facts, during the
Effectiveness Period, which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or which
causes such Registration Statement or Prospectus to omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (vi) of the
reasonable determination of the Company and the Trust that a post-effective
amendment to the Registration Statement would be appropriate;
(f) obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of such Shelf
Registration Statement, without charge, at least one conformed copy of each
Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated therein by
reference or exhibits thereto, unless requested);
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<PAGE>
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends (other than with respect to restrictions
requiring minimum transfers in blocks having an aggregate principal or
liquidation amount, as the case may be, of $100,000) and in such denominations
(consistent with the provisions of the Indenture and the Declaration) and
registered in such names as the selling Holders or the underwriters may
reasonably request at least two Business Days prior to the closing of any sale
of Registrable Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, promptly after the occurrence of any event specified in Section
3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, prepare a supplement or
post-effective amendment to such Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Securities, such Prospectus will not include any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and to notify each Holder to suspend use of the Prospectus
as promptly as practicable after the occurrence of such an event, and each
Holder hereby agrees to suspend use of the Prospectus until the Company has
amended or supplemented the Prospectus to correct such misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time
prior to the filing of any document which is to be incorporated by reference
into a Registration Statement or a Prospectus after the initial filing of a
Registration Statement, provide a reasonable number of copies of such document
to the Holders; and make such of the representatives of the Company and the
Trust as shall be reasonably requested by the Holders of Registrable Securities
or the Initial Purchasers on behalf of such Holders available for discussion of
such document;
(k) obtain a CUSIP number for all Exchange Capital Securities
and the Capital Securities (and, if the Trust has made a distribution of the
Subordinated Debentures to the Holders of the Capital Securities, the
Subordinated Debentures or the Exchange Debentures), as the case may be, not
later than the effective date of a Registration Statement, and provide the
applicable Trustee with certificates for the Exchange Securities or the
Registrable Securities, as the case may be, in a form eligible for deposit with
the Depositary;
(l) cause the Indenture, the Declaration, the Capital
Securities Guarantee (in the case of a Shelf Registration) and the Exchange
Capital Securities Guarantee (in the case of an Exchange Offer Registration) to
be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, and effect such changes to such documents as may
be required for them to be so qualified in accordance with the terms of the TIA
and execute, and cause the applicable Trustee to execute, all documents as may
be required to effect such changes, and all other forms and documents required
to be filed with the SEC to enable such documents to be so qualified in a timely
manner;
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(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in underwritten
offerings and take all such other appropriate actions in connection therewith as
are reasonably requested by the Holders of at least 25% in aggregate principal
or liquidation amount, as the case may be, of the Registrable Securities in
order to expedite or facilitate the registration or the disposition or the
Registrable Securities;
(n) in the case of a Shelf Registration, whether or not an
underwriting agreement is entered into and whether or not the registration is an
underwritten registration, if requested by (x) either Initial Purchaser, in the
case where such Initial Purchaser holds Securities acquired by it as part of its
initial placement and (y) Holders of at least 25% in aggregate principal or
liquidation amount, as the case may be, of the Registrable Securities covered
thereby: (i) make such representations and warranties to Holders of such
Registrable Securities and the underwriters (if any), with respect to the
business of the Trust, the Company and the subsidiaries of the Company as then
conducted and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, as
are customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when requested; (ii) obtain opinions of counsel to the
Company and the Trust and updates thereof (which may be in the form of a
reliance letter) in form and substance reasonably satisfactory to the managing
underwriters (if any) and the Holders of a majority in aggregate principal or
liquidation amount, as the case may be, of the Registrable Securities being
sold, addressed to each selling Holder and the underwriters (if any) covering
the matters customarily covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by such underwriters (it
being agreed that the matters to be covered by such opinion may be subject to
customary qualifications and exceptions); (iii) obtain "cold comfort" letters
and updates thereof in form and substance reasonably satisfactory to the
managing underwriters from the independent certified public accountants of the
Company and the Trust (and, if necessary, any other independent certified public
accountants of any business acquired by the Company and the Trust for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each of the underwriters, such letters
to be in customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings and such other
matters as reasonably requested by such underwriters in accordance with
Statement on Auditing Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures
no less favorable than those set forth in Section 4 hereof (or such other
provisions and procedures acceptable to Holders of a majority in aggregate
principal or liquidation amount, as the case may be, of Registrable Securities
covered by such Registration Statement and the managing underwriters) customary
for such agreements with respect to all parties to be indemnified pursuant to
said Section (including, without limitation, such underwriters and selling
Holders); and in the case of an underwritten registration, the above
requirements shall be satisfied at each closing under the related underwriting
agreement or as and to the extent required thereunder;
(o) if (1) a Shelf Registration is filed pursuant to Section
2(b) or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, make reasonably available for inspection by any
selling Holder of Registrable Securities or Participating Broker-Dealer, as
applicable, who certifies to the
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Company and the Trust that it has a current intention to sell Registrable
Securities pursuant to the Shelf Registration, any underwriter participating in
any such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder, Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during the Company's normal
business hours, all financial and other records, pertinent corporate documents
and properties of the Trust, the Company and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and
employees of the Trust, the Company and its subsidiaries to supply all relevant
information in each case reasonably requested by any such Inspector in
connection with such Registration Statement; records and information which the
Company and the Trust determine, in good faith, to be confidential and any
Records and information which it notifies the Inspectors are confidential shall
not be disclosed to any Inspector except where (i) the disclosure of such
Records or information is necessary to avoid or correct a material misstatement
or omission in such Registration Statement, (ii) the release of such Records or
information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or is necessary in connection with any action, suit or
proceeding or (iii) such Records or information previously has been made
generally available to the public; each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be required to agree
in writing that Records and information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Trust or the Company
unless and until such is made generally available to the public through no fault
of an Inspector or a selling Holder; and each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be required to further
agree in writing that it will, upon learning that disclosure of such Records or
information is sought in a court of competent jurisdiction, or in connection
with any action, suit or proceeding, give notice to the Company and allow the
Company at its expense to undertake appropriate action to prevent disclosure of
the Records and information deemed confidential;
(p) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be applicable and make
generally available to its securityholders earning statements satisfying the
provisions of Section ll(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12 month periods, provided that the
obligations under this paragraph (p) shall be satisfied by the timely filing of
quarterly and annual reports on Forms 10-Q and 10-K under the Exchange Act;
(q) upon consummation of an Exchange Offer or a Private
Exchange, if requested by a Trustee, obtain an opinion of counsel to the Company
addressed to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer or the Private Exchange, as the
case may be, substantially to the effect that (i) each of the Company and the
Trust, as the case requires, has duly authorized, executed and delivered the
Exchange Securities and Private Exchange
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Securities, and (ii) each of the Exchange Securities or the Private Exchange
Securities, as the case may be, constitutes a validly issued, fully paid and
nonassessable undivided beneficial ownership interest in the assets of the Trust
(in the case of an Exchange Capital Security) or a legal, valid and binding
obligation of the Company, enforceable against the Company, in accordance with
its respective terms (in the case of an Exchange Debenture and the Exchange
Capital Securities Guarantee), as the case may be (in each case, with customary
exceptions);
(r) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to the
Company or the Trust, as applicable (or to such other Person as directed by the
Company or the Trust, respectively), in exchange for the Exchange Securities or
the Private Exchange Securities, as the case may be, the Company or the Trust,
as applicable, shall mark, or cause to be marked, on such Registrable Securities
delivered by such Holders that such Registrable Securities are being cancelled
in exchange for the Exchange Securities or the Private Exchange Securities, as
the case may be; it being understood that in no event shall such Registrable
Securities be marked as paid or otherwise satisfied;
(s) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
NASD;
(t) take all other steps necessary to effect the registration
of the Registrable Securities covered by a Registration Statement contemplated
hereby;
(u) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," which section shall be reasonably acceptable to
the Initial Purchasers or another representative of the Participating
Broker-Dealers, and which shall contain a summary statement of the positions
taken or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer that holds Registrable Securities
acquired for its own account as a result of market-making activities or other
trading activities (a "Participating Broker-Dealer") and that will be the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Securities to be received by such broker-dealer in the Exchange Offer, whether
such positions or policies have been publicly disseminated by the staff of the
SEC or such positions or policies, in the reasonable judgment of the Initial
Purchasers or such other representative, represent the prevailing views of the
staff of the SEC, including a statement that any such broker-dealer who receives
Exchange Securities for Registrable Securities pursuant to the Exchange Offer
may be deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Company the notice referred to in Section 3(e), without charge,
as many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary Prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request (each of the
Company and the Trust hereby consents to the use of the Prospectus forming part
of the Exchange Offer Registration Statement or any amendment or supplement
thereto by any Person subject to the prospectus delivery requirements of the
Securities Act, including all Participating
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<PAGE>
Broker-Dealers, in connection with the sale or transfer of the Exchange
Securities covered by the Prospectus or any amendment or supplement thereto),
(iii) use their best efforts to keep the Exchange Offer Registration Statement
effective and to amend and supplement the Prospectus contained therein in order
to permit such Prospectus to be lawfully delivered by all Persons subject to the
prospectus delivery requirements of the Securities Act for such period of time
as such Persons must comply with such requirements under the Securities Act and
applicable rules and regulations in order to resell the Exchange Securities;
PROVIDED, HOWEVER, that such period shall not be required to exceed 90 days (or
such longer period if extended pursuant to the last sentence of Section 3
hereof) (the "Applicable Period"), and (iv) include in the transmittal letter or
similar documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the
Securities Act; and (B) in the case of any Exchange Offer Registration
Statement, the Company and the Trust agree to deliver to the Initial Purchasers
or to another representative of the Participating Broker-Dealers, if requested
by the Initial Purchasers or such other representative of Participating
Broker-Dealers, on behalf of the Participating Broker-Dealers upon consummation
of the Exchange Offer (i) an opinion of counsel in form and substance reasonably
satisfactory to the Initial Purchasers or such other representative of the
Participating Broker-Dealers, covering the matters customarily covered in
opinions requested in connection with Exchange Offer Registration Statements and
such other matters as may be reasonably requested (it being agreed that the
matters to be covered by such opinion may be subject to customary qualifications
and exceptions), (ii) an officers' certificate containing certifications
substantially similar to those set forth in Section 5(f) of the Purchase
Agreement and such additional certifications as are customarily delivered in a
public offering of debt securities and (iii) as well as upon the effectiveness
of the Exchange Offer Registration Statement, a comfort letter, in each case, in
customary form if permitted by Statement on Auditing Standards No. 72.
The Company or the Trust may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company or the Trust, as applicable, such information regarding such
seller as may be required by the staff of the SEC to be included in a
Registration Statement. The Company or the Trust may exclude from such
registration the Registrable Securities of any seller who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
The Company shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
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In the case of a Shelf Registration Statement, or if
Participating Broker-Dealers who have notified the Company and the Trust that
they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in this Section 3(u) hereof, are seeking to
sell Exchange Securities and are required to deliver Prospectuses, each Holder
agrees that, upon receipt of any notice from the Company or the Trust of the
occurrence of any event specified in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or
3(e)(vi) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(i) hereof or until it is advised in writing (the "Advice") by the
Company and the Trust that the use of the applicable Prospectus may be resumed,
and, if so directed by the Company and the Trust, such Holder will deliver to
the Company or the Trust (at the Company's or the Trust's expense, as the case
requires) all copies in such Holder's possession, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Securities or Exchange Securities, as the case may be, current at
the time of receipt of such notice. If the Company or the Trust shall give any
such notice to suspend the disposition of Registrable Securities or Exchange
Securities, as the case may be, pursuant to a Registration Statement, the
Company and the Trust shall use commercially reasonable efforts to file and have
declared effective (if an amendment) as soon as practicable after the resolution
of the related matters an amendment or supplement to the Registration Statement
and shall extend the period during which such Registration Statement is required
to be maintained effective and usable for resales pursuant to this Agreement by
the number of days in the period from and including the date of the giving of
such notice to and including the date when the Company and the Trust shall have
made available to the Holders (x) copies of the supplemented or amended Prospec
tus necessary to resume such dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with
any Registration Statement, the Company and the Trust shall, jointly and
severally, indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter who participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and each of their respective partners, directors, officers,
employees and agents, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment or supplement thereto), covering Registrable Securities or Exchange
Securities, as applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 4(d) hereof) any such
settlement is effected with the prior written consent of the Company and the
Trust; and
19
<PAGE>
(iii) against any and all expenses whatsoever, as incurred (including
the fees and disbursements of counsel chosen by such Initial Purchaser, such
Holder, such Participating Broker-Dealer, or any underwriter (except to the
extent otherwise expressly provided in Section 4(c) hereof)), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) of this Section
4(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished in writing to the Company or the
Trust by either Initial Purchaser or such Holder, underwriter or Participating
Broker-Dealer for use in a Registration Statement (or any amendment thereto) or
any Prospectus (or any amendment or supplement thereto).
(b) Each Initial Purchaser and each Holder, underwriter or
Participating Broker-Dealer agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors and officers (including each officer of
the Company and the Trust who signed the Registration Statement), the Trust,
each of the Trustees and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense whatsoever
described in the indemnity contained in Section 4(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in a Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company or the
Trust by such Holder expressly for use in such Registration Statement (or any
amendment thereto), or any such Prospectus (or any amendment or supplement
thereto); PROVIDED, HOWEVER, that in the case of a Shelf Registration Statement,
no such Holder shall be liable for any claims hereunder in excess of the amount
of net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have under this Section 4 to the extent that it is
not materially prejudiced by such failure as a result thereof, and in any event
shall not relieve it from liability which it may have otherwise on account of
this indemnity agreement. In the case of parties indemnified pursuant to Section
4(a) or (b) above, counsel to the indemnified parties shall be selected by such
parties. An indemnifying party may participate at its own expense in the defense
of such action; PROVIDED, HOWEVER, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to local counsel),
separate from their own counsel, for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same
20
<PAGE>
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 4 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional written release
of each indemnified party from all liability arising out of such litiga tion,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have validly
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 4(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unenforceable by an indemnified party
although applicable in accordance with its terms, the Company, the Trust and the
Holders shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company, the Trust and the Holders, as incurred; PROVIDED, HOWEVER, that no
Person guilty of fraudulent misrepresentation (within the meaning of Section
ll(f) of the 1933 Act) shall be entitled to contribution from any Person that
was not guilty of such fraudulent misrepresentation. As between the Company, the
Trust, and the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company and Trust, on the one hand, and the Holders, on
the other hand, with respect to the statements or omissions which resulted in
such loss, liability, claim, damage or expense, or action in respect thereof, as
well as any other relevant equitable considerations. The relative fault of the
Company and the Trust, on the one hand, and of the Holders, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Trust, on the one hand, or by or on behalf of the Holders, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust and the
Holders of the Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 4 were to be determined by
pro rata allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each Affiliate of a Holder, and each partner, director, officer and employee and
Person, if any, who controls a Holder or such Affiliate within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Holder, and each director of the
Company, each Trustee of the Trust and each Person, if any,
21
<PAGE>
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
each of the Company or the Trust.
5. Participation in an Underwritten Registration. No Holder
may participate in an underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in the
underwriting arrangement approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Selection of Underwriters. The Holders of Registrable
Securities covered by the Shelf Registration Statement who desire to do so may
sell the Securities covered by such Shelf Registration in an underwritten
offering, subject to the provisions of Section 3(m) hereof. In any such
underwritten offering, the underwriter or underwriters and manager or managers
that will administer the offering will be selected by the Holders of a majority
in aggregate principal or liquidation amount, as applicable, of the Registrable
Securities included in such offering; PROVIDED, HOWEVER, that such underwriters
and managers must be reasonably satisfactory to the Company and the Trust.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company is
subject to the reporting requirements of Section 13 or 15 of the Exchange Act
and any Registrable Securities remain outstanding, the Company will file the
reports required to be filed by it under the Securities Act and Section 13(a) or
15(d) of the Exchange Act and the rules and regulations adopted by the SEC
thereunder; PROVIDED, HOWEVER, that if the Company ceases to be so required to
file such reports, it will, upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is necessary to
permit sales of its securities pursuant to Rule 144 under the Securities Act,
(b) deliver such information to a prospective purchaser as is necessary to
permit sales of its securities pursuant to Rule 144A under the Securities Act
and (c) take such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, (ii) Rule 144A
under the Securities Act, as such rule may be amended from time to time, or
(iii) any similar rules or regulations hereafter adopted by the SEC. Upon the
request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
(b) No Inconsistent Agreements. Neither the Company nor the
Trust has not entered into, nor will the Company or the Trust on or after the
date of this Agreement enter into, any agreement which is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's or the Trust's other issued
and outstanding securities under any such agreements.
22
<PAGE>
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company and the Trust have obtained the written
consent of Holders of a majority in aggregate principal or liquidation amount of
the outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; PROVIDED that no amendment, modification or
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the foregoing sentence, (i) this Agreement may be
amended, without the consent of any Holder of Registrable Securities, by written
agreement signed by the Company, the Trust and the Initial Purchasers, to cure
any ambiguity, correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with other provisions of this Agreement, (ii)
this Agreement may be amended, modified or supplemented, and waivers and
consents to departures from the provisions hereof may be given, by written
agreement signed by the Company, the Trust and the Initial Purchasers to the
extent that any such amendment, modification, supplement, waiver or consent is,
in their reasonable judgment, necessary or appropriate to comply with applicable
law (including any interpretation of the Staff of the SEC) or any change therein
and (iii) to the extent any provision of this Agreement relates to an Initial
Purchaser, such provision may be amended, modified or supplemented, and waivers
or consents to departures from such provisions may be given, by written
agreement signed by such Initial Purchaser, the Company and the Trust.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to
each Initial Purchaser, the address set forth in the Purchase Agreement; and
(ii) if to the Company or the Trust, initially at the Company's address set
forth in the Purchase Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; PROVIDED, HOWEVER, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
23
<PAGE>
Registrable Securities in violation of the terms of the Purchase Agreement, the
Declaration or the Indenture. If any transferee of any Holder shall acquire
Registrable Securities, in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiaries. Each Holder and any
Participating Broker-Dealer shall be third party beneficiaries of the agreements
made hereunder among the Initial Purchasers, the Company and the Trust, and each
Initial Purchaser shall have the right to enforce such agreements directly to
the extent it deems such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY
DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY
SUCH COURT. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
24
<PAGE>
(k) Securities Held by the Company, the Trust or its
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, the Trust or any Affiliates shall not be counted
in determining whether such consent or approval was given by the Holders of such
required percentage.
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
RELIANCE BANCORP, INC.
By: /s/ Raymond A. Nielsen
--------------------------------------
Name: Raymond A. Nielsen
Title: President/Chief Executive
Officer
RELIANCE CAPITAL TRUST I
By: Reliance Bancorp, Inc.,
as Sponsor
By: /s/ Raymond A. Nielsen
-------------------------------------
Name: Raymond A. Nielsen
Title: President/Chief Executive
Officer
Confirmed and accepted as of
the date first above written:
SANDLER O'NEILL & PARTNERS, L.P.
By: SANDLER O'NEILL & PARTNERS CORP.,
the sole general partner
By: /s/ Catherine A. Lawton
----------------------------------
Name: Catherine A. Lawton
Title: Vice President
KEEFE, BRUYETTE & WOODS, INC.
By: /s/ Frank S. Cicero
----------------------------------
Name: Frank S. Cicero
Title: Vice President
<PAGE>
EXHIBIT 4.9
LIQUIDATED DAMAGES AGREEMENT
THIS LIQUIDATED DAMAGES AGREEMENT (the "Agreement") is made and entered
into as of April 23, 1998 by and among RELIANCE BANCORP, INC., a Delaware
corporation (the "Company"), RELIANCE CAPITAL TRUST I, a business trust formed
under the laws of the state of Delaware (the "Trust"), SANDLER O'NEILL &
PARTNERS, L.P. ("Sandler O'Neill") and KEEFE, BRUYETTE & WOODS, INC. ("Keefe
Bruyette" and, together with Sandler O'Neill, the "Initial Purchasers").
WHEREAS, as an inducement to the Initial Purchasers to enter into the
Purchase Agreement, dated April 23, 1998 (the "Purchase Agreement"), by and
among the Company, the Trust and the Initial Purchasers (providing for, among
other things, the sale by the Trust to the Initial Purchasers of 50,000 of the
Trust's 8.17% Capital Securities, Series A, liquidation amount of $1,000 per
Capital Security (the "Capital Securities"), the proceeds of which will be used
by the Trust to purchase 8.17% Junior Subordinated Deferrable Interest
Debentures due May 1, 2028, Series A, of the Company (the "Subordinated
Debentures")), and as a condition to the several obligations of the Initial
Purchasers thereunder, the Company and the Trust have agreed to provide to the
Initial Purchasers and their direct and indirect transferees certain
registration and related rights pursuant to and in accordance with the terms of
the Registration Rights Agreement, dated the date hereof (the "Registration
Rights Agreement"), by and among the Company, the Trust and the Initial
Purchasers; and
WHEREAS, notwithstanding the fact that the Company and the Trust have
consummated or will consummate an Exchange Offer, pursuant to Section 2(b) of
the Registration Rights Agreement, the Initial Purchasers may, under certain
circumstances, require the Company and the Trust to file a Shelf Registration
Statement for the resale of certain Registrable Securities held by them;
WHEREAS, the Registration Rights Agreement contains certain provisions
concerning the time within which the Company and the Trust must file the Shelf
Registration Statement and the period for which such Shelf Registration
Statement must remain effective and usable for resales; and
WHEREAS, the Company, the Trust and the Initial Purchasers desire to
provide for the payment of liquidated damages by the Company directly to the
Initial Purchasers in the event that the Company and the Trust fail to comply
with such contractual provisions, as more fully set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. Capitalized terms used (including in the foregoing
recitals) but not defined herein shall have the meanings given to such terms in
the Registration Rights Agreement, except that (a) the term "Shelf Registration
Statement" shall refer only to a Shelf Registration Statement filed by the
Company and the Trust pursuant to Section 2(b) of the Registration Rights
Agreement, and (b) the term "Registrable Securities" shall refer only to those
Registrable Securities held at such time by the Initial Purchasers.
<PAGE>
2. Payment of Liquidated Damages. (a) In the event that (i) the Shelf
Registration Statement is not filed with the SEC on or prior to the 45th day
after a request for such filing is properly made by the Initial Purchasers in
accordance with Section 2(b) of the Registration Rights Agreement (provided that
in no event shall such date be required to be earlier than 75 days after the
Issue Date), or (ii) the Shelf Registration Statement is not declared effective
by the SEC on or prior to the later of the 40th day after the date such Shelf
Registration Statement was required to be filed pursuant to the terms of the
Registration Rights Agreement and the 180th date after the Issue Date, or (iii)
the Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be continuously effective or usable for resales
(whether as a result of an event contemplated by Section 3(e) of the
Registration Rights Agreement or otherwise) at any time during the 180-day
period (and any extensions of such period pursuant to the last paragraph of
Section 3 of the Registration Rights Agreement) immediately following the date
on which the Shelf Registration Statement is first declared effective (other
than after such time as all Registrable Securities have been disposed of
thereunder or otherwise cease to be Registrable Securities pursuant to the terms
of the Registration Rights Agreement), then in each case the Company shall pay
liquidated damages to the Initial Purchasers, at a rate of 0.25% per annum in
respect of the aggregate liquidation amount of Capital Securities held by the
Initial Purchasers or, in the event that the Trust is liquidated and
Subordinated Debentures are distributed to holders of Capital Securities, the
aggregate principal amount of Subordinated Debentures held by the Initial
Purchasers, as the case may be, in respect of the period (x) commencing on the
46th day after such request for the filing of a Shelf Registration Statement is
made by the Initial Purchasers (provided that in no event shall such date be
required to be earlier than 76 days after the Issue Date) and terminating upon
the filing of the Shelf Registration Statement (in the case of clause (i)
above), (y) commencing on the later of the 41st day after the date the Shelf
Registration Statement was required to be filed and the 181st day after the
Issue Date and terminating upon the effectiveness of the Shelf Registration
Statement (in the case of clause (ii) above), or (z) commencing on the day the
Shelf Registration Statement ceases to be effective or usable for resales and
terminating at such time as the Shelf Registration Statement again becomes
effective and usable for resales (in the case of clause (iii) above), provided,
however, that the maximum aggregate amount of liquidated damages payable by the
Company pursuant to this Agreement and the Registration Rights Agreement shall
not exceed 0.25% per annum in respect of the aggregate liquidation amount of the
Capital Securities or, in the event the Trust is liquidated and Subordinated
Debentures are distributed to holders of Capital Securities, the aggregate
principal amount of Subordinated Debentures.
(b) Any amounts of liquidated damages payable by the Company pursuant
to this Section 2 shall be paid in cash directly to the Initial Purchasers on
the next succeeding May 1 or November 1, as the case may be, following the
period in respect of which such Liquidated Damages have become due and payable
hereunder.
3. General.
(a) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
2
<PAGE>
(b) Amendments. This Agreement may be amended by the parties hereto by
a written instrument duly executed on behalf of each of the parties hereto.
(c) Entire Agreement. This Agreement and the Registration Rights
Agreement constitute the entire agreement, and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(d) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to any
applicable conflicts of law principles.
(e) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered to the parties at the addresses
set forth in, and in a manner contemplated by, the Registration Rights
Agreement.
3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Liquidated
Damages Agreement as of the date first written above.
RELIANCE BANCORP, INC.
By: /s/ Raymond A. Nielsen
------------------------------------------
Name: Raymond A. Nielsen
Title: President/Chief Executive Officer
RELIANCE CAPITAL TRUST I
By: Reliance Bancorp, Inc.,
as Sponsor
By: /s/ Raymond A. Nielsen
------------------------------------------
Name: Raymond A. Nielsen
Title: President/Chief Executive Officer
SANDLER O'NEILL & PARTNERS, L.P.
By: SANDLER O'NEILL
& PARTNERS CORP., the sole general partner
By: /s/ Catherine A. Lawton
------------------------------------------
Name: Catherine A. Lawton
Title: Vice President
KEEFE, BRUYETTE & WOODS, INC.
By: /s/ Frank S. Cicero
------------------------------------------
Name: Frank S. Cicero
Title: Vice President
<PAGE>
EXHIBIT 5.1
[LETTER OF MULDOON, MURPHY & FAUCETTE]
September 24, 1998
Board of Directors
Reliance Bancorp, Inc.
585 Stewart Avenue
Garden City, New York 11530
Ladies and Gentlemen:
In connection with the registration under the Securities Act of
1933, as amended (the "Act"), of $50,000,000 aggregate principal amount of
Junior Subordinated Deferrable Interest Debentures, Series B (the "Debt
Securities") of Reliance Bancorp, Inc., a Delaware corporation (the
"Company"), $50,000,000 aggregate liquidation amount of Capital Securities,
Series B (the "Exchange Capital Securities") of Reliance Capital Trust I, a
business trust created under the laws of the State of Delaware (the
"Issuer"), and the Exchange Guarantee with respect to the Exchange Capital
Securities (the "Guarantee") to be executed and delivered by the Company for
the benefit of the holders from time to time of the Exchange Capital
Securities, we, as your counsel, have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion. We have
also relied as to Certain Company matters on information obtained from public
officials, officers of the Company and other sources believed by us to be
responsible.
In our examination, we have assumed and have not verified (i) the
genuineness of all signatures, (ii) the authenticity of all documents
submitted to us as originals, (iii) the conformity with the originals of all
documents supplied to us as copies, and (iv) the accuracy and completeness of
all corporate records and documents and of all certificates and statements of
fact, in each case given or made available to us by the Company or its
subsidiary.
Upon the basis of such examination, we advise you that, when:
(i) the Registration Statement relating to the Debt Securities, the
Exchange Capital Securities and the Exchange Guarantee has become effective
under the Act;
(ii) the Exchange Guarantee Agreement relating to the Exchange
Guarantee with respect to the Exchange Capital Securities of the Issuer has
been duly executed and delivered;
(iii) the Debt Securities have been duly executed and authenticated in
accordance with the Indenture and issued and delivered as contemplated in the
Registration Statement; and
(iv) The Exchange Capital Securities have been duly executed in
accordance with the Amended and Restated Trust Agreement of the Issuer and
issued and delivered as contemplated in the Registration Statement;
The Debt Securities and the Exchange Guarantee relating to the
Exchange Capital Securities of the Issuer will constitute valid and
legally binding obligations of the Company, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
A-1
<PAGE>
Board of Directors
Reliance Bancorp, Inc.
September 24, 1998
Page 2
We understand that you have received an opinion regarding the Exchange
Capital Securities from Richards, Layton & Finger, P.A., special Delaware
counsel for the Company `and the Issuer. We are expressing no opinion with
respect to the matters contained in such opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Legal
Matters" in the Prospectus. In giving such consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Act.
Very truly yours,
MULDOON, MURPHY & FAUCETTE
By: /s/ Muldoon, Murphy & Fancette
---------------------------------
A-2
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
September 23, 1998
Reliance Capital Trust I
Reliance Bancorp, Inc.
585 Stewart Avenue
Garden City, New York 11530
Re: Reliance Capital Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Reliance Bancorp, Inc., a
Delaware corporation (the "Company"), and Reliance Capital Trust I, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of April 20, 1998
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on April 20, 1998;
(b) The Declaration of Trust of the Trust, dated as of April 20, 1998,
among the Company and the trustees of the Trust named therein;
(c) The Amended and Restated Declaration of Trust of the Trust, dated
as of April 28, 1998 (including Annex I and Exhibits A-1 and A-2) (the "Trust
Agreement"), among the Company, as sponsor, the trustees of the Trust named
therein and the holders, from time to time, of undivided beneficial interests in
the assets of the Trust;
(d) The Registration Statement on Form S-4 (the "Registration
Statement"), including a preliminary prospectus (the "Prospectus") relating to
the 8.17% Capital Securities, of the Trust, Series B, representing undivided
beneficial interests in the assets of the Trust (each, an "Exchange Capital
Security" and collectively, the "Exchange Capital Securities"), as proposed to
be filed by the Company and the Trust with the Securities and Exchange
Commission on or about September 23, 1998; and
A-1
<PAGE>
Reliance Capital Trust I
Reliance Bancorp, Inc.
September 23, 1998
Page 2
(e) A Certificate of Good Standing for the Trust, dated September 23,
1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
an Exchange Capital Security is to be issued by the Trust (collectively, the
"Exchange Capital Security Holders") of a Certificate evidencing Exchange
Capital Securities substantially in the form of Exhibit A-1 to the Trust
Agreement and the consideration for the Exchange Capital Security acquired by it
in accordance with the Trust Agreement and the Registration Statement, and (vii)
that the Exchange Capital Securities are issued to the Exchange Capital Security
Holders in accordance with the Trust Agreement and the Registration Statement.
We have not participated in the preparation of the Registration Statement and
assume no responsibility for its contents.
A-2
<PAGE>
Reliance Capital Trust I
Reliance Bancorp, Inc.
September 23, 1998
Page 3
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as business trust under the Business Trust Act.
2. The Exchange Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Exchange Capital Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that Exchange Capital Security
Holders may be obligated to make payments under the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
-----------------------------------
<PAGE>
<PAGE>
EXHIBIT 8
[Letterhead of Muldoon, Murphy & Faucette]
September 24, 1998
Board of Directors
Reliance Bancorp, Inc.
585 Stewart Avenue
Garden City, New York 11530
Ladies and Gentlemen:
As special federal tax counsel to Reliance Capital Trust I (the
"Issuer") and Reliance Bancorp, Inc. in connection with the exchange offer by
the Issuer of $50,000,000 of its 8.17% Capital Securities, Series B pursuant
to the prospectus (the "Prospectus") contained in the Registration Statement
for the Exchange Offer, and assuming the transactions described in the
Prospectus will be performed in accordance with the terms described therein,
we hereby confirm to you our opinion as set forth under the heading "Certain
Federal Income Tax Considerations" in the Prospectus, subject to the
limitations set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Certain
Federal Income Tax Consequences" in the Prospectus. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
MULDOON, MURPHY & FAUCETTE
By: /s/ MULDOON, MURPHY & FAUCETTE
-------------------------------
<PAGE>
EXHIBIT 12.1
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Excluding Interest on Deposits)
The Company's ratios of earnings to fixed charges (excluding interest on
deposits) for the periods indicated were as follows:
<TABLE>
<CAPTION>
Year Ended June 30,
1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Net income........................ $ 18,729 $ 10,936 $ 11,723 $ 9,702 $ 8,694 $ 6,633
Extraordinary items, net of tax... -- -- -- -- -- --
Cumulative effect of changes in
accounting for income taxes.... -- -- -- -- (1,200) --
Income tax expense (benefit)...... 14,810 10,138 9,946 6,842 5,538 5,243
-------- -------- -------- -------- -------- --------
Pretax earnings (loss)......... 33,539 21,074 21,669 16,544 13,032 11,876
Fixed charges:
Interest on borrowed funds........ 23,396 17,514 10,560 6,349 2,233 579
-------- -------- -------- -------- -------- --------
Total fixed charges........ $ 23,396 $ 17,514 $ 10,560 $ 6,349 $ 2,233 $ 579
-------- -------- -------- -------- -------- --------
Earnings (for ratio calculation).. $ 56,935 $ 38,588 $ 32,229 $ 22,893 $ 15,265 $ 12,455
Ratio of earnings to fixed charges 2.43x 2.20x 3.05x 3.61x 6.84x 21.51x
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represent net income (loss) before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits, include
gross interest expense (other than on deposits). Fixed charges, including gross
interest on deposits, include all interest expense.
<PAGE>
EXHIBIT 12.2
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Including Interest on Deposits)
The Company's ratios of earnings to fixed charges (including interest on
deposits) for the periods indicated were as follows:
<TABLE>
<CAPTION>
Year Ended June 30,
1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Net income .......................... $ 18,729 $ 10,936 $ 11,723 $ 9,702 $ 8,694 $ 6,633
Extraordinary items, net of tax ..... -- -- -- -- -- --
Cumulative effect of changes in
accounting for income taxes ...... -- -- -- -- (1,200) --
Income tax expense (benefit) ........ 14,810 10,138 9,946 6,842 5,538 5,243
-------- -------- -------- -------- -------- --------
Pretax earnings (loss)............ 33,539 21,074 21,669 16,544 13,032 11,876
Fixed charges:
Interest on deposits ................ 63,432 54,139 42,425 22,012 17,791 20,743
Interest on borrowed funds .......... 23,396 17,514 10,560 6,349 2,233 579
-------- -------- -------- -------- -------- --------
Total fixed charges $ 86,828 $ 71,653 $ 52,985 $ 28,361 $ 20,024 $ 21,322
-------- -------- -------- -------- -------- --------
Earnings (for ratio calculation) .... $120,367 $ 92,727 $ 74,654 $ 44,905 $ 33,056 $ 33,198
Ratio of earnings to fixed charges .. 1.39x 1.29x 1.41x 1.58x 1.65x 1.56x
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represent net income (loss) before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits, include
gross interest expense (other than on deposits). Fixed charges, including gross
interest on deposits, include all interest expense.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Reliance Bancorp, Inc. on Form S-4 of our report dated July 24,
1997, incorporated by reference in the Annual Report on Form 10-K of Reliance
Bancorp, Inc. for the year ended June 30, 1997 and to the reference to our
firm the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ KPMG PEAT MARWICK LLP
- ---------------------------
Melville, New York
September 24, 1998
A-1
<PAGE>
EXHIBIT 25.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
- --------------------------------------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- --------------------------------------------------------------------------------
RELIANCE CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
585 Stewart Avenue
Garden City, New York 11530
(Address of principal executive offices) (Zip code)
- --------------------------------------------------------------------------------
8.17% Capital Securities, Series B
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-1
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
A-2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 2nd day of July, 1998.
THE BANK OF NEW YORK
By: /s/MARY JANE SCHMALZEL
----------------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
<PAGE>
A-3
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................................... $ 6,397,993
Interest-bearing balances ............................. 1,138,362
Securities:
Held-to-maturity securities ........................... 1,062,074
Available-for-sale securities ......................... 4,167,240
Federal funds sold and Securities pur-
chased under agreements to resell ..................... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .............................................. 36,538,242
LESS: Allowance for loan and
lease losses ........................................ 631,725
LESS: Allocated transfer risk
reserve ............................................. 0
Loans and leases, net of unearned
income, allowance, and reserve ...................... 35,906,517
Assets held in trading accounts ......................... 2,145,149
Premises and fixed assets (including
capitalized leases) ................................... 663,928
Other real estate owned ................................. 10,895
Investments in unconsolidated
subsidiaries and associated
companies ............................................. 237,991
Customers' liability to this bank on
acceptances outstanding ............................... 992,747
Intangible assets ....................................... 1,072,517
Other assets ............................................ 1,643,173
------------
Total assets ............................................ $ 55,830,236
------------
------------
LIABILITIES
Deposits:
In domestic offices ................................... $ 24,849,054
Noninterest-bearing ................................... 10,011,422
Interest-bearing ...................................... 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ...................... 15,319,002
Noninterest-bearing ................................... 707,820
Interest-bearing ...................................... 14,611,182
</TABLE>
A-1
<PAGE>
<TABLE>
<S> <C>
Federal funds purchased and Securities
sold under agreements to repurchase ................... 1,906,066
Demand notes issued to the U.S. .........................
Treasury .............................................. 215,985
Trading liabilities ..................................... 1,591,288
Other borrowed money:
With remaining maturity of one year
or less ............................................. 1,991,119
With remaining maturity of more than
one year through three years ........................ 0
With remaining maturity of more than
three years ......................................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding ................................. 998,145
Subordinated notes and debentures ....................... 1,314,000
Other liabilities ....................................... 2,421,281
------------
Total liabilities ....................................... 50,631,514
------------
EQUITY CAPITAL
Common stock ............................................ 1,135,284
Surplus ................................................. 731,319
Undivided profits and capital
reserves .............................................. 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ............................................ 40,198
Cumulative foreign currency transla-
tion adjustments ...................................... (36,129)
------------
Total equity capital .................................... 5,198,722
------------
Total liabilities and equity
capital ............................................... $ 55,830,236
------------
------------
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
Thomas A. Renyi |
Alan R. Griffith | Directors
J. Carter Bacot |
-
A-2
<PAGE>
EXHIBIT 25.2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
- --------------------------------------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- --------------------------------------------------------------------------------
RELIANCE BANCORP, INC.
(Exact name of obligor as specified in its charter)
Delaware 11-3187176
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
585 Stewart Avenue
Garden City, New York 11530
(Address of principal executive offices) (Zip code)
- --------------------------------------------------------------------------------
Guarantee of 8.17% Capital Securities, Series B
of Reliance Capital Trust I
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-1
<PAGE>
A-2
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the 2 Rector Street, New York,
State of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
A-3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 2nd day of July, 1998.
THE BANK OF NEW YORK
By: /s/MARY JANE SCHMALZEL
------------------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
A-4
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................................... $ 6,397,993
Interest-bearing balances ............................. 1,138,362
Securities:
Held-to-maturity securities ........................... 1,062,074
Available-for-sale securities ......................... 4,167,240
Federal funds sold and Securities pur-
chased under agreements to resell ..................... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .............................................. 36,538,242
LESS: Allowance for loan and
lease losses ........................................ 631,725
LESS: Allocated transfer risk
reserve ............................................. 0
Loans and leases, net of unearned
income, allowance, and reserve ...................... 35,906,517
Assets held in trading accounts ......................... 2,145,149
Premises and fixed assets (including
capitalized leases) ................................... 663,928
Other real estate owned ................................. 10,895
Investments in unconsolidated
subsidiaries and associated
companies ............................................. 237,991
Customers' liability to this bank on
acceptances outstanding ............................... 992,747
Intangible assets ....................................... 1,072,517
Other assets ............................................ 1,643,173
------------
Total assets ............................................ $ 55,830,236
------------
------------
LIABILITIES
Deposits:
In domestic offices ................................... $ 24,849,054
</TABLE>
A-1
<PAGE>
<TABLE>
<S> <C>
Noninterest-bearing ................................... 10,011,422
Interest-bearing ...................................... 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ...................... 15,319,002
Noninterest-bearing ................................... 707,820
Interest-bearing ...................................... 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase ................... 1,906,066
Demand notes issued to the U.S. .........................
Treasury .............................................. 215,985
Trading liabilities ..................................... 1,591,288
Other borrowed money:
With remaining maturity of one year
or less ............................................. 1,991,119
With remaining maturity of more than
one year through three years ........................ 0
With remaining maturity of more than
three years ......................................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding ................................. 998,145
Subordinated notes and debentures ....................... 1,314,000
Other liabilities ....................................... 2,421,281
------------
Total liabilities ....................................... 50,631,514
------------
EQUITY CAPITAL
Common stock ............................................ 1,135,284
Surplus ................................................. 731,319
Undivided profits and capital
reserves .............................................. 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ............................................ 40,198
Cumulative foreign currency transla-
tion adjustments ...................................... (36,129)
------------
Total equity capital .................................... 5,198,722
------------
Total liabilities and equity
capital ............................................... $ 55,830,236
------------
------------
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
Thomas A. Renyi |
Alan R. Griffith | Directors
J. Carter Bacot |
-
- --------------------------------------------------------------------------------
A-2
<PAGE>
EXHIBIT 25.3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
- --------------------------------------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- --------------------------------------------------------------------------------
RELIANCE BANCORP, INC.
(Exact name of obligor as specified in its charter)
Delaware 11-3187176
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
585 Stewart Avenue
Garden City, New York 11530
(Address of principal executive offices) (Zip code)
- --------------------------------------------------------------------------------
8.17% Junior Subordinated Deferrable Interest
Debentures, Series B
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-1
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the 2 Rector Street, New York,
State of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
A-2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 2nd day of July, 1998.
THE BANK OF NEW YORK
By: /s/MARY JANE SCHMALZEL
-----------------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
A-3
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................................... $ 6,397,993
Interest-bearing balances ............................. 1,138,362
Securities:
Held-to-maturity securities ........................... 1,062,074
Available-for-sale securities ......................... 4,167,240
Federal funds sold and Securities pur-
chased under agreements to resell ..................... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .............................................. 36,538,242
LESS: Allowance for loan and
lease losses ........................................ 631,725
LESS: Allocated transfer risk
reserve ............................................. 0
Loans and leases, net of unearned
income, allowance, and reserve ...................... 35,906,517
Assets held in trading accounts ......................... 2,145,149
Premises and fixed assets (including
capitalized leases) ................................... 663,928
Other real estate owned ................................. 10,895
Investments in unconsolidated
subsidiaries and associated
companies ............................................. 237,991
Customers' liability to this bank on
acceptances outstanding ............................... 992,747
Intangible assets ....................................... 1,072,517
Other assets ............................................ 1,643,173
------------
Total assets ............................................ $ 55,830,236
------------
------------
LIABILITIES
Deposits:
In domestic offices ................................... $ 24,849,054
Noninterest-bearing ................................... 10,011,422
</TABLE>
A-1
<PAGE>
<TABLE>
<S> <C>
Interest-bearing ...................................... 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ...................... 15,319,002
Noninterest-bearing ................................... 707,820
Interest-bearing ...................................... 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase ................... 1,906,066
Demand notes issued to the U.S. .........................
Treasury .............................................. 215,985
Trading liabilities ..................................... 1,591,288
Other borrowed money:
With remaining maturity of one year
or less ............................................. 1,991,119
With remaining maturity of more than
one year through three years ........................ 0
With remaining maturity of more than
three years ......................................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding ................................. 998,145
Subordinated notes and debentures ....................... 1,314,000
Other liabilities ....................................... 2,421,281
------------
Total liabilities ....................................... 50,631,514
------------
EQUITY CAPITAL
Common stock ............................................ 1,135,284
Surplus ................................................. 731,319
Undivided profits and capital
reserves .............................................. 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ............................................ 40,198
Cumulative foreign currency transla-
tion adjustments ...................................... (36,129)
------------
Total equity capital .................................... 5,198,722
------------
Total liabilities and equity
capital ............................................... $ 55,830,236
------------
------------
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
Thomas A. Renyi |
Alan R. Griffith | Directors
J. Carter Bacot |
-
- --------------------------------------------------------------------------------
A-2
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
RELIANCE CAPITAL TRUST I
Offer to Exchange its
8.17% Capital Securities, Series B
(Liquidation Amount $1,000 per Capital
Security) which have been registered under the
Securities Act of 1933
for any and all of its outstanding
8.17% Capital Securities, Series A
(Liquidation Amount $1,000 per Capital Security)
Pursuant to the Prospectus
dated _______________, 1998
-----------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., NEW YORK TIME, ON ______________, 1998,
UNLESS THE OFFER IS EXTENDED.
-----------------------------------------------------
The Exchange Agent for the Exchange Offer is:
The Bank of New York
By Registered or Certified Mail: By Hand or Overnight Delivery:
The Bank of New York The Bank of New York
101 Barclay Street - 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Noriko Miyazaki, Ground Level
Reorganization Section New York, New York 10286
Attention: Noriko Miyazaki,
Reorganization Section
Confirm by Telephone
or for Information call:
(212) 815-6333
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 815-6339
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of 8.17%
Capital Securities, Series A of Reliance Capital Trust (the "Original Capital
Securities) either if (i) Original Capital Securities are to be forwarded
herewith or (ii) tenders of Original Capital Securities are to be made by
book-entry transfer to an account maintained by The Bank of New York (the
"Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in "The Exchange Offer--Procedures for Tendering
Original Capital Securities" in the Prospectus.
A-1
<PAGE>
Holders of Original Capital Securities whose certificates (the
"Certificates") for such Original Capital Securities are not immediately
available or who cannot deliver their Certificates and all other required
documents to the Exchange Agent on or prior to the Expiration Date (as defined
in the Prospectus) or who cannot complete the procedures for book-entry transfer
on or prior to the Expiration Date, must tender their Original Capital
Securities according to the guaranteed delivery procedures set forth in "The
Exchange Offer--Procedures for Tendering Original Capital Securities" in the
Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
DESCRIPTION OF ORIGINAL CAPITAL SECURITIES TENDERED
(See Instruction 4)
<TABLE>
<CAPTION>
If blank, please print name and Original Capital Securities tendered
address of registered holder (Attach additional list if necessary)
- ------------------------------------ -----------------------------------------------------------------------------
Liquidation Amount of
Original Capital
Aggregate Securities
Liquidation Amount Tendered**
Certificate of Original Capital (if less than all are
Number(s)* Securities Held tendered)
-------------- ----------------------- ---------------------------
<S> <C> <C> <C>
TOTAL
AMOUNT
TENDERED:
- ------------------------------------ -------------- ---------------------------
</TABLE>
* Need not be completed by book-entry holders.
** Original Capital Securities may be tendered in whole or in part in
denominations of $100,000 and integral multiples of $1,000 in excess
thereof, provided that if any Original Capital Securities are tendered for
exchange in part, the untendered principal amount thereof must be $100,000
or any integral multiple of $1,000 in excess thereof. All Original Capital
Securities held shall be deemed tendered unless a lesser number is
specified in this column.
A-2
<PAGE>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED ORIGINAL CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
--------------------------------------------
DTC Account Number
-------------------------------------------------------
Transaction Code Number
--------------------------------------------------
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY
IF TENDERED ORIGINAL CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name of Registered Holder(s)
---------------------------------------------
Window Ticket Number (if any)
--------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-----------------------
Name of Institution which Guaranteed Delivery
Name of Tendering
---------------------------------------------------
Institution
---------------------------------------------------------
DTC Account Number
--------------------------------------------------
Transaction Code Number
----------------------------------------------
/ / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NONEXCHANGED OR
NONTENDERED ORIGINAL CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE
DTC ACCOUNT NUMBER SET FORTH ABOVE.
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE ORIGINAL CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name
--------------------------------------------------------------------------
Address
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
Area Code and Telephone Number
------------------------------------------------
Contact Person
----------------------------------------------------------------
A-3
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Reliance Capital Trust I, a trust
created under the laws of Delaware (the "Trust") and Reliance Bancorp, Inc.,
a Delaware corporation (the "Company"), the above-described aggregate
Liquidation Amount of the Trust's 8.17% Capital Securities, Series A (the
"Original Capital Securities") in exchange for a like aggregate Liquidation
Amount of the Trust's 8.17% Series B Capital Securities (the "Exchange
Capital Securities") which have been registered under the Securities Act of
1933 (the "Securities Act"), upon the terms and subject to the conditions set
forth in the Prospectus, dated _____________, 1998 (as the same may be
amended or supplemented from time to time, the "Prospectus"), receipt of
which is acknowledged, and in this Letter of Transmittal (which, together
with the Prospectus, constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Original Capital Securities tendered herewith in accordance with
the terms and conditions of the Exchange Offer (including, if the Exchange Offer
is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of the Trust all right, title and interest in and to such Original Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent also is acting as agent of the
Company and the Trust in connection with the Exchange Offer) with respect to the
tendered Original Capital Securities, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), subject only to the right of withdrawal described in the Prospectus,
to (i) deliver Certificates for Original Capital Securities to the Company or
the Trust together with all accompanying evidences of transfer and authenticity
to, or upon the order of, the Trust, upon receipt by the Exchange Agent, as the
undersigned's agent, of the Exchange Capital Securities to be issued in exchange
for such Original Capital Securities, (ii) present Certificates for such
Original Capital Securities for transfer, and to transfer the Original Capital
Securities on the books of the Trust, and (iii) receive for the account of the
Trust all benefits and otherwise exercise all rights of beneficial ownership of
such Original Capital Securities, all in accordance with the terms and
conditions of the Exchange Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, sell, assign and transfer the
Original Capital Securities tendered hereby and that, when the same are accepted
for exchange, the Trust will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances,
and that the Original Capital Securities tendered hereby are not subject to any
adverse claims or proxies. The undersigned will, upon request, execute and
deliver any additional documents deemed by the Company, the Trust or the
Exchange Agent to be necessary or desirable to complete the exchange assignment
and transfer of the Original Capital Securities tendered hereby, and the
undersigned will comply with its obligations under the Registration Rights
Agreement. The undersigned has read and agrees to all of the terms of the
Exchange Offer.
The name(s) and address(es) of the registered holder(s) of the Original
Capital Securities tendered hereby should be printed above, if they are not
already set forth above, as they appear on the Certificates representing such
Original Capital Securities. The Certificate number(s) of the Original Capital
Securities than the undersigned wishes to tender should be indicated in the
appropriate boxes above.
If any tendered Original Capital Securities are not exchanged pursuant to
the Exchange Offer for any reason, or if Certificates are submitted for more
Original Capital Securities than are tendered or accepted for exchange,
Certificates for such nonexchanged or nontendered Original Capital Securities
will be returned (or, in the case of Original Capital Securities tendered by
book-entry transfer, such Original Capital Securities will be credited to an
account maintained at DTC), without expense to the tendering holder, promptly
following the expiration or termination of the Exchange Offer.
The undersigned understands that tenders of Original Capital Securities
pursuant to any one of the procedures described in "The Exchange
Offer--Procedures for Tendering Original Capital Securities" in the Prospectus
and in the Instructions herein will, upon the Company's and the Trust's
acceptance for exchange of such tendered Original Capital Securities, constitute
a binding agreement between the undersigned, the Company and the Trust upon the
terms and subject to the conditions of the Exchange Offer. The undersigned
recognizes that, under certain circumstances set forth in the Prospectus, the
Company and the Trust may not be required to accept for exchange any of the
Original Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Original Capital Securities, that such Exchange Capital
Securities be credited to the account indicated above
A-4
<PAGE>
maintained at DTC, if applicable, substitute Certificates representing Original
Capital Securities not exchanged or not accepted for exchange will be issued to
the undersigned or, in the case of a book-entry transfer of Original Capital
Securities, will be credited to the account indicated above maintained at DTC.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please deliver Exchange Capital Securities to the undersigned at the address
shown below the undersigned's signature.
By tendering Original Capital Securities and executing this Letter of
Transmittal, the undersigned hereby represents and agrees that (i) the
undersigned is not an "affiliate" of the Company or the Trust within the meaning
of Rule 405 under the Securities Act, (ii) any Exchange Capital Securities to be
received by the undersigned are being acquired in the ordinary course of its
business, (iii) the undersigned has no arrangement or understanding with any
person to participate in the distribution (within the meaning of the Securities
Act) of Exchange Capital Securities to be received in the Exchange Offer and
(iv) if the undersigned is not a broker-dealer, the undersigned is not engaged
in, and does not intend to engage in, a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. By tendering Original
Capital Securities pursuant to the Exchange Offer and executing this Letter of
Transmittal, a holder of Original Capital Securities which is a broker-dealer
represents and agrees, consistent with certain interpretive letters issued by
the staff of the Division of Corporation Finance of the Securities and Exchange
Commission to third parties, that (a) such Original Capital Securities held by
the broker-dealer are held only as a nominee or (b) such Original Capital
Securities were acquired by such broker-dealer for its own account as a result
of market-making activities or other trading activities and it will deliver the
Prospectus (as amended or supplemented from time to time) meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Capital Securities (provided that, by so acknowledging and by
delivering a Prospectus, such broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act).
The Company and the Trust have agreed that, subject to the provisions of
the Registration Rights Agreement, the Prospectus, as it may be amended or
supplemented from, time to time, may be used by a Participating Broker-Dealer
(as defined below) in connection with resales of Exchange Capital Securities
received in exchange for Original Capital Securities, where such Original
Capital Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making activities or other trading activities, for
a period ending 90 days after the Expiration Date (subject to extension under
certain limited circumstances described in the Prospectus) or, if earlier, when
all such Exchange Capital Securities have been, disposed of by such
Participating Broker-Dealer. In that regard, each broker-dealer who acquired
Original Capital Securities for its own account and as a result of market-making
or other trading activities (a "Participating Broker-Dealer"), by tendering such
Original Capital Securities and executing this Letter of Transmittal, agrees
that, upon receipt of Notice from the Company or the Trust of the occurrence of
any event or the discovery of any fact which makes any statement contained or
incorporated by reference therein, in light of the circumstances under which
they were made, not misleading or of the occurrence of certain other events
specified in the Registration Rights Agreement, such Participating Broker-Dealer
will suspend the sale of Exchange Capital Securities pursuant to the Prospectus
until the Company and the Trust have amended or supplemented the Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to the Participating Broker-Dealer or the Company or the
Trust has given Notice that the sale of Exchange Capital Securities may be
resumed, as the case may be. If the Company or the Trust gives such Notice to
suspend the sale of the Exchange Capital Securities, it shall extend the 90-day
period referred to above during which Participating Broker-Dealers are entitled
to use the Prospectus in connection with the resale of Exchange Capital
Securities by the number of days during the period from and including the date
of the giving of such Notice to and including the date when Participating
Broker-Dealers shall have received copies of the supplemented or amended
Prospectus necessary to permit resales of the Exchange Capital Securities or to
and including the date on which the Company or the Trust has given Notice that
the sale of Exchange Capital Securities may be resumed, as the case may be.
As a result, a Participating Broker-Dealer who intends to use the
Prospectus in connection with re-sales of Exchange Capital Securities received
in exchange for Original Capital Securities pursuant to the Exchange Offer must
notify the Company and the Trust, or cause the Company and the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such Notice may be given in the space provided above and by
checking the box next thereto, or may be delivered to the Exchange Agent at the
address set forth in the Prospectus under "The Exchange Offer--Exchange Agent."
Holders whose Original Capital Securities are accepted for exchange will
not receive Distributions on such Original Capital Securities which are due
and payable after the date of such acceptance, and the undersigned waives the
right to receive any such Distribution on such Original Capital Securities
A-5
<PAGE>
following such acceptance. Holders of Original Capital Securities as of the
October 15, 1998 record date for the initial Distribution on November 1, 1998,
will be entitled to receive such Distribution.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
A-6
<PAGE>
HOLDER(S) SIGN HERE
(See Instructions 2, 5 and 6)
(Please Complete Substitute Form W-9 Below)
(Note: Signature(s) must be guaranteed if required by Instruction 2)
Must be signed by registered holder(s) exactly, Series A ("Original
Captial Securities) as name(s) appear(s) on Certificate(s) for the 8.17%
Capital Securities hereby tendered or on a security position listing, or by
any person(s) authorized to become the registered holder(s) by endorsements
and documents transmitted herewith (including such opinions of counsel,
certificates and other information as may be required by the Company, the
Trust or the Exchange Agent to comply with the restrictions on transfer
applicable to the Original Capital Securities). If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary capacity or representative
capacity, please set forth the signer's full title. See Instruction 5.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Signature(s) of Holder(s))
Date , 1998
-----------
Name(s)
------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please Print)
Area Code(s) and Telephone Number
---------------------------------------------
- -------------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
GUARANTEE OF SIGNATURE(S)
(See Instructions 2 and 5)
Authorized Signature
-----------------------------------------------------------
Name
--------------------------------------------------------------------------
(Please Print)
Date , 1998
-----------------------
Capacity or Title
-------------------------------------------------------------
Name of Firm
------------------------------------------------------------------
Address
-----------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
------------------------------------------------
A-7
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 1, 5 and 6)
To be completed ONLY if 8.17% Capital Securities, Series B ("Exchange
Capital Securities") and/or any 8.17% Capital Securities, Series A
("Original Capital Securities") that are not tendered are to be issued in the
name of someone other than the registered holder of the Original Capital
Securities whose name(s) appear(s) above.
Issue:
/ / Exchange Capital Securities to:
/ / Original Capital Securities not tendered to:
Name
--------------------------------------------------
(Please Print)
Address
-----------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
(Include Zip Code)
- -------------------------------------------------------
(Taxpayer Identification or Social Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5 and 6)
To be completed ONLY if Capital Securities, Series B ("Exchange Capital
Securities") and/or any 8.17% Capital Securities, Series A ("Original
Capital Securities") that are not tendered are to be sent to someone other
than the registered holder of the Original Capital Securities whose name(s)
appear(s) above, or to the registered holder(s) at an address other than that
shown above.
Mail:
/ / Exchange Capital Securities to:
/ / Original Capital Securities not tendered to:
Name
-------------------------------------------------
(Please Print)
Address
----------------------------------------------
- ------------------------------------------------------
(Include Zip Code)
- ------------------------------------------------------
(Taxpayer Identification or Social Security No.)
A-8
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1. Delivery of Letter of Transmittal and Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be completed either if
(a) tenders are to be made pursuant to the procedures for tender by
book-entry transfer set forth under "The Exchange Offer--Procedures for
Tendering Original Capital Securities" in the Prospectus and an Agent's
Message is not delivered or (b) Certificates are to be forwarded herewith.
Timely confirmation of a book-entry transfer of such 8.17% Capital
Securities, Series A ("Original Capital Securities") into the Exchange
Agent's account at DTC, or Certificates as well as this Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any
required signature guarantees, and any other documents required by this
Letter of Transmittal, must be received by the Exchange Agent at its
addresses set forth herein on or prior to the Expiration Date. Tenders by
book-entry transfer also may be made by delivering an Agent's Message in lieu
of this Letter of Transmittal. The term "book-entry confirmation" means a
confirmation of book-entry transfer of Original Capital Securities into the
Exchange Agent's account at DTC. The term "Agent's Message" means a message
transmitted by DTC to and received by the Exchange Agent and forming a part
of a book-entry confirmation, which states that DTC has received an express
acknowledgment from the tendering participant, which acknowledgment states
that such participant has received and agrees to be bound by the Letter of
Transmittal (including the representations contained herein) and that the
Trust and the Company may enforce the Letter of Transmittal against such
participant. Original Capital Securities may be tendered in whole or in part
in the Liquidation Amount of $100,000 (100 Capital Securities) and integral
multiples of $1,000 in excess thereof, provided that, if any Original Capital
Securities are tended for exchange in part, the untendered Liquidation Amount
thereof must be $100,000 (100 Capital Securities) or any integral multiple of
$1,000 in excess thereof.
Holders who wish to tender their Original Capital Securities and (i) who
cannot complete the procedures for delivery by book-entry transfer on or prior
to the Expiration Date, (ii) who cannot deliver their Original Capital
Securities, this Letter of Transmittal and all other required documents to the
Exchange Agent on or prior to the Expiration Date or (iii) whose Original
Capital Securities are not immediately available, may tender their Original
Capital Securities by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth
under "The Exchange Offer--Procedures for Tendering Original Capital Securities"
in the Prospectus. Pursuant to such procedures: (a) such tender must be made by
or through an Eligible Institution (as defined below); (b) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form made
available by the Company, must be received by the Exchange Agent on or prior to
the Expiration Date; and (c) the Certificates (or a book-entry confirmation (as
defined above and in the Prospectus)) representing all tendered Original Capital
Securities, in proper form for transfer, together with a Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent within three New York Stock
Exchange, Inc. trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in "The Exchange Offer--Procedures for
Tendering Original Capital Securities" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form, set forth in such Notice. For Original Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery or.
or prior to the Expiration Date. As used herein and in the Prospectus, "Eligible
Institution" means a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as "an eligible guarantor institution," including (as such terms
are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT.
A-9
<PAGE>
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither the Company nor the Trust will accept any alternative, conditional
or contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof), waives any right to receive any Notice of
the acceptance of such tender.
2. Guarantee of Signatures. No signature guarantee or, this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder (which
term, for purposes of this document, shall include any participant in DTC whose
name appears on a security position listing as the owner of the Original Capital
Securities) of Original Capital Securities tendered herewith, unless such
holder(s) has completed either the box entitled "Special Issuance instructions"
or the box entitled "Special Delivery Instructions" above, or
(ii) such Original Capital Securities are tendered for the account of a
firm, that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
3. Inadequate Space. If the space provided in the box captioned
"Description of Original Capital Securities" is inadequate, the Certificate
number(s) and/or the Liquidation Amount of Original Capital Securities and any
other required information should be listed on a separate signed schedule which
is attached to this Letter of Transmittal.
4. Partial Tenders and Withdrawal Rights. Tenders of Original Capital
Securities will be accepted only in the principal amount of $100,000 (100
Capital Securities) and integral multiples of $1,000 in excess thereof, provided
that if any Original Capital Securities are tendered for exchange in part, the
untendered principal amount thereof must be $100,000 (100 Capital securities) or
any integral multiple of $1,000 in excess thereof. If less than all the Original
Capital Securities evidenced by any Certificate submitted are to be tendered,
fill in the Liquidation Amount of Original Capital Securities which are to be
tendered in the box entitled "Liquidation Amount of Original Capital Securities
Tendered (if less than all are tendered)." In such case, a new Certificate(s)
for the remainder of the Original Capital Securities that were evidenced by your
old Certificate(s) will be sent to the holder of the Original Capital
Securities, promptly after the Expiration Date, unless the appropriate boxes or
this Letter of Transmittal are completed. All Original Capital Securities
represented by Certificates delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Original Capital Securities
may be withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written or facsimile
transmission of such Notice of Withdrawal must be received by the Exchange Agent
at one of its addresses set forth above or in the Prospectus on or prior to the
Expiration Date. Any such Notice of Withdrawal must specify the name of the
person who tendered the Original Capital Securities to be withdrawn, the
aggregate Liquidation Amount of Original Capital Securities to be withdrawn, and
(if Certificates for Original Capital Securities have been tendered) the name of
the registered holder of the Original Capital Securities as set forth on the
Certificate for the Original Capital Securities, if different from that of the
person who tendered such Original Capital Securities. If Certificates for the
Original Capital Securities have been delivered or otherwise identified to the
Exchange Agent, then prior to the physical release of such Certificates for the
Original Capital Securities, the tendering holder must submit the serial numbers
shown on the particular Certificates for the Original Capital Securities to be
withdrawn and the signature on the Notice of Withdrawal must be guaranteed by an
Eligible Institution, except in the case of Original Capital Securities tendered
for the account of an Eligible Institution. If Original Capital Securities have
been tendered pursuant to the procedures for book-entry transfer set forth under
"The Exchange Offer--Procedures for Tendering Original Capital Securities" in
the Prospectus, the Notice of Withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Original Capital
Securities, in which case a Notice of Withdrawal will be effective if delivered
to the Exchange Agent by written or facsimile transmission on or prior to the
Expiration Date. Withdrawals of tenders of Original Capital Securities may not
be rescinded. Original Capital Securities properly withdrawn will not be deemed
validly
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<PAGE>
tendered for purposes of the Exchange Offer, but may be untendered at any
subsequent time on or prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer--Procedures for
Tendering Original Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company and the
Trust, in their sole discretion, whose determination shall be final and binding
on all parties. None of the Company, the Trust, any affiliates or assigns of the
Company and the Trust, the Exchange Agent nor any other person shall be under
any duty to give any notification of any irregularities in any Notice of
Withdrawal or incur any liability for failure to give any such notification. Any
Original Capital Securities which have been tendered but which are withdrawn
will be returned to the holder thereof without cost to such holder promptly
after withdrawal.
5. Signatures on Letter of Transmittal, Assignments and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Original
Capital Securities tendered hereby, the signature(s) must correspond exactly
with the name(s) as written or, the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Original Capital Securities tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Original Capital Securities are registered in different
name(s) on several Certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal (or facsimiles thereof) as there
are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to the Company and the Trust, in their sole discretion of such
persons' authority to so act.
When this Letter of Transmittal is signed by the registered holder(s) of
the Original Capital Securities listed and transmitted hereby, no
endorsement(s) of Certificate(s) or separate bond power(s) are required
unless 8.17% Capital Securities, Series B ("Exchange Capital Securities") are
to be issued in the name of a person other than the registered holder(s).
Signature(s) on such Certificate(s) or bond power(s) must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Original Capital Securities listed, the Certificates
must be endorsed or accompanied by appropriate bond powers, signed exactly as
the name or names of the registered owner(s) appear(s) on the Certificates, and
also must be accompanied by such opinions of counsel, certifications and other
information as the Company, the Trust or the Exchange Agent may require in
accordance with the restrictions on transfer applicable to the Original Capital
Securities. Signatures on such Certificates or bond powers must be guaranteed by
an Eligible Institution.
6. Special Issuance and Delivery Instructions. If Exchange Capital
Securities are to be issued in the name of a person other than the signer of
this Letter of Transmittal, or if Exchange Capital Securities are to be sent: to
someone other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes an this Letter of Transmittal
should be completed. Certificates for Original Capital Securities not exchanged
will be returned by mail or, if tendered by book-entry transfer, by crediting
the account indicated above maintained at DTC. See Instruction 4.
The Company and the Trust will determine, in their sole discretion, all
questions as to the form of documents, validity, eligibility (including time of
receipt) and acceptance for exchange of any tender of Original Capital
Securities, which determination shall be final and binding on all parties. The
Company and the Trust reserve the absolute right, in their sole and absolute
discretion, to reject any and all tenders determined by either of them not to be
in proper form or the acceptance of which, or exchange for, may, in the view of
counsel to the Company and the Trust, be unlawful. The Company and the Trust
also reserve the absolute right, subject to applicable law, to waive any of the
conditions of the
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<PAGE>
Exchange Offer set forth in the Prospectus under "The Exchange Offer--Certain
Conditions to the Exchange Offer" or any conditions or irregularity in any
tender of Original Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
The Company's and the Trust's interpretation of the terms and conditions of the
Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Original Capital Securities will
be deemed to have been validly made until all irregularities with respect to
such tender have been cured or waived. None of the Company, the Trust, any
affiliates or assigns of the Company, the Trust, the Exchange Agent, or any
other person shall be under any duty to give notification of any irregularities
in tenders or incur any liability for failure to give such notification.
8. Questions, Requests for Assistance and Additional Copies. Questions and
requests for assistance may be directed to the Exchange Agent at its address and
telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, this Letter of Transmittal and the Notice
of Guaranteed Delivery may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% Backup Withholding; Substitute Form W-9. Under U.S. Federal income
tax law, a holder whose tendered Original Capital Securities are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Original
Capital Securities exchanged pursuant to the Exchange Offer may be subject to
31% backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Original Capital Securities or of the last transferee appearing on the
transfers attached to, or endorsed on, the Original Capital Securities. If the
Original Capital Securities are registered in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" an the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. Lost, Destroyed or Stolen Certificates. If any Certificate(s)
representing Original Capital Securities have been lost, destroyed or stolen,
the holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related
A-12
<PAGE>
documents cannot be processed until the procedures for replacing lost, destroyed
or stolen Certificate(s) have been followed.
11. Security Transfer Taxes. Holders who tender their Original Capital
Securities for exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, Exchange Capital Securities are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Original Capital Securities tendered, or if a transfer
tax is imposed for any reason other than the exchange of Original Capital
Securities in connection with the Exchange Offer, then the amount of any such
transfer tax (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
Important: This Letter of Transmittal (or facsimile thereof) and all other
required documents must be received by the Exchange Agent on or prior to the
Expiration Date.
A-13
<PAGE>
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(See Instruction 9)
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
SUBSTITUTE Part 1 - PLEASE PROVIDE YOUR TIN TIN
---------------------
IN THE BOX AT RIGHT AND CERTIFY BY Social Security Number or
SIGNING AND DATING BELOW Employer Identification
Number
Form W-9 Part 2
Department of the Treasury Awaiting TIN / /
Internal Revenue Service
Payer's Request for Taxpayer CERTIFICATION - UNDER THE Identification
Number (TIN) PENALTIES OF PERJURY, I CERTIFY THAT (1)
and Certification the number shown on this form is my correct
taxpayer identification number (or I am
waiting for a number to be issued to me),
(2) I am not subject to backup withholding
either because (i) I am exempt from
backup withholding, (ii) I have not been
notified by the Internal Revenue Service
("IRS") that I am subject to backup
withholding as a result of a failure to
report all interest or dividends, or
(iii) the IRS has notified me that I am
no longer subject to backup withholding,
and (3) any other information provided
on this form is true and correct.
</TABLE>
Signature
-----------------------------
Date
----------------------------------
- ------------------------- You must cross out item (iii) in Part
(2) above if you have been notified by
the IRS that you are subject to backup
withholding because of underreporting
interest or dividends on your tax return
and you have not been notified by the
IRS that you are no longer subject to
backup withholding.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN
CERTAIN CIRCUMSTANCES RESULT IN BACKUP WITHHOLDING OF
31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES
FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments made to me on account of the Capital Securities, Series B shall
be retained until I provide a taxpayer identification number to the Exchange
Agent and that, if I do not provide my taxpayer identification number within 60
days, such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and 31% of all reportable payments made to me thereafter will
be withheld and remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
Signature Date
------------------------------------- --------------------------
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<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
8.17% Capital Securities, Series A
(Liquidation Amount $1,000 per Capital Security)
OF
RELIANCE CAPITAL TRUST I
This Notice of Guaranteed Delivery, or one substantially equivalent to
this form, must be used to accept the Exchange Offer (as defined below) if
(i) the procedures for delivery by book-entry transfer cannot be completed on
or prior to the Expiration Date (as defined in the Prospectus referred to
below), (ii) certificates for the Trust's (as defined below) 8.17% Capital
Securities, Series A (the "Original Capital Securities") are not immediately
available or (iii) Original Capital Securities, the Letter of Transmittal and
all other required documents cannot be delivered to The Bank of New York (the
"Exchange Agent") on or prior to the Expiration Date. This Notice of
Guaranteed Delivery may be delivered by hand, overnight courier or mail, or
transmitted by facsimile transmission, to the Exchange Agent. See "The
Exchange Offer--Procedures for Tendering Original Capital Securities" in the
Prospectus.
The Exchange Agent for the Exchange Offer is:
The Bank of New York
By Registered or Certified Mail By Hand or Overnight Delivery
- ----------------------------------- -----------------------------------
The Bank of New York The Bank of New York
101 Barclay Street - 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Ground Level
Attention: Noriko Miyazaki, New York, New York 10286
Reorganization Section
Attention: Noriko Miyazaki,
Reorganization Section
Confirm by Telephone
or for Information call:
(212) 815-6333
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 815-6339
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above or transmission of this Notice of Guaranteed Delivery via a
facsimile to a number other than as set forth above will not constitute a valid
delivery.
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<PAGE>
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions therefor, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
Ladies and Gentleman:
The undersigned hereby tenders to Reliance Capital Trust I, a trust created
under the laws of Delaware (the "Trust"), upon the terms and subject to the
conditions set forth in the Prospectus dated ____________, 1998 (as the same may
be amended or supplemented from time to time, the "Prospectus"), and the related
Letter of Transmittal (which together constitute the "Exchange Offer"), receipt
of which is hereby acknowledged, the aggregate liquidation amount of Original
Capital Securities set forth below pursuant to the guaranteed delivery
procedures set forth in the Prospectus under the caption "The Exchange
Offer--Procedures for Tendering Original Capital Securities."
<TABLE>
<CAPTION>
<S> <C>
Aggregate Liquidation Amount Name(s) of Registered Holder(s):
Tendered:
----------------------------------------- -----------------------------------------
Certificate No(s). (if available): Address(es):
- -------------------------------------------------- -----------------------------------------
If Original Capital Securities will be tendered
by book-entry transfer, provide the following Area Code and Telephone Number(s):
information:
-----------------------------------------
DTC Account Number:
--------------------------------
Signature(s):
----------------------------
Date:
---------------------------------------------- -----------------------------------------
</TABLE>
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
A-2
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association
or clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing
being referred to as an "Eligible Institution"), hereby guarantees to deliver
to the Exchange Agent, at one of its addresses set forth above, either the
8.17% Capital Securities, Series A ("Original Capital Securities")
tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Original Capital Securities to the Exchange
Agent's account at The Depository Trust Company ("DTC"), pursuant to the
procedures for book-entry transfer set forth in the Prospectus, in either
case together with one or more properly completed and duly executed Letter(s)
of Transmittal (or facsimile thereof) and any other required documents within
three business days after the date of execution of this Notice of Guaranteed
Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Original Capital Securities tendered hereby to the Exchange
Agent within the time period set forth above and that failure to do so could
result in a financial loss to the undersigned.
Name of Firm:
--------------------- --------------------------------
(Authorized Signature)
Address: Title:
-------------------------- --------------------------
Name:
- ---------------------------------- ---------------------------
Zip Code (Please type or print)
Area Code and
Telephone Number: Date:
----------------- ---------------------------
NOTE: DO NOT SEND ORIGINAL CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED
DELIVERY. ACTUAL SURRENDER OF ORIGINAL CAPITAL SECURITIES MUST BE MADE PURSUANT
TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
A-3
