Exhibit 4.4
--------------------------------------------------------------------------------
Commerce Bancorp, Inc.
------------------------------
------------------------------
INDENTURE
Dated as of March 11, 2002
------------------------------
The Bank of New York
as Debenture Trustee
------------------------------
JUNIOR SUBORDINATED CONVERTIBLE DEBENTURES
--------------------------------------------------------------------------------
TABLE OF CONTENTS*
ARTICLE I DEFINITIONS...................................................................................1
SECTION 1.01 Definitions...............................................................................1
ARTICLE II SECURITIES....................................................................................9
SECTION 2.01 Forms Generally...........................................................................9
SECTION 2.02 Execution and Authentication.............................................................10
SECTION 2.03 Form and Payment.........................................................................10
SECTION 2.04 Global Security..........................................................................10
SECTION 2.05 Interest.................................................................................12
SECTION 2.06 Transfer and Exchange....................................................................13
SECTION 2.07 Replacement Securities...................................................................16
SECTION 2.08 Temporary Securities.....................................................................16
SECTION 2.09 Cancellation.............................................................................17
SECTION 2.10 Defaulted Interest.......................................................................17
SECTION 2.11 CUSIP Numbers............................................................................18
ARTICLE III PARTICULAR COVENANTS OF THE CORPORATION......................................................18
SECTION 3.01 Payment of Principal 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 Commerce Capital Trust II................................................21
SECTION 3.09 Payment of Expenses......................................................................21
SECTION 3.10 Payment Upon Resignation or Removal......................................................22
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.....................................28
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..........................................................................30
----------
* This Table of Contents shall not, for any purpose, be deemed to be a part of the Indenture.
ii
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.....................................................33
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...............................................................35
SECTION 6.06 Compensation and Expenses of Debenture Trustee...........................................35
SECTION 6.07 Officers' Certificate as Evidence........................................................36
SECTION 6.08 Conflicting Interest of Debenture Trustee................................................36
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................................................38
SECTION 6.12 Succession by Merger, etc................................................................39
SECTION 6.13 Limitation on Rights of Debenture Trustee as a Creditor..................................39
SECTION 6.14 Co-trustees and Separate Trustees........................................................39
SECTION 6.15 Authenticating Agents....................................................................41
ARTICLE VII CONCERNING THE SECURITYHOLDERS...............................................................42
SECTION 7.01 Action by Securityholders................................................................42
SECTION 7.02 Proof of Execution by Securityholders....................................................42
SECTION 7.03 Who Are Deemed Absolute Owners...........................................................43
SECTION 7.04 Securities Owned by Corporation Deemed Not Outstanding...................................43
SECTION 7.05 Revocation of Consents; Future Holders Bound.............................................43
ARTICLE VIII SECURITYHOLDERS' MEETINGS....................................................................44
SECTION 8.01 Purposes of Meetings.....................................................................44
SECTION 8.02 Call of Meetings by Debenture Trustee....................................................44
SECTION 8.03 Call of Meetings by Corporation or Securityholders.......................................44
SECTION 8.04 Qualifications for Voting................................................................45
SECTION 8.05 Regulations..............................................................................45
SECTION 8.06 Voting...................................................................................45
ARTICLE IX AMENDMENTS...................................................................................46
SECTION 9.01 Without Consent of Securityholders.......................................................46
SECTION 9.02 With Consent of Securityholders..........................................................47
SECTION 9.03 Compliance with Trust Indenture Act; Effect of Supplemental Indentures...................48
SECTION 9.04 Notation on Securities...................................................................49
SECTION 9.05 Evidence of Compliance of Supplemental Indenture to be Furnished to
Debenture Trustee........................................................................49
iii
ARTICLE X CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE............................................49
SECTION 10.01 Corporation May Consolidate, etc., on Certain Terms......................................49
SECTION 10.02 Successor Corporation to be Substituted for Corporation..................................50
SECTION 10.03 Opinion of Counsel to be Given to Debenture Trustee......................................50
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........................................................................51
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.........................52
ARTICLE XII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.............................53
SECTION 12.01 Indenture and Securities Solely Corporate Obligations....................................53
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..........................................................54
SECTION 13.04 Addresses for Notices, etc...............................................................54
SECTION 13.05 Governing Law............................................................................54
SECTION 13.06 Evidence of Compliance with Conditions Precedent.........................................54
SECTION 13.07 Business Days............................................................................55
SECTION 13.08 Trust Indenture Act to Control...........................................................55
SECTION 13.09 Table of Contents, Headings, etc.........................................................55
SECTION 13.10 Execution in Counterparts................................................................55
SECTION 13.11 Separability.............................................................................56
SECTION 13.12 Assignment...............................................................................56
SECTION 13.13 Acknowledgment of Rights.................................................................56
ARTICLE XIV REDEMPTION OF SECURITIES.....................................................................56
SECTION 14.01 Special Event Redemption.................................................................56
SECTION 14.02 Optional Redemption by Corporation.......................................................57
SECTION 14.03 No Sinking Fund..........................................................................57
SECTION 14.04 Notice of Redemption; Selection of Securities............................................58
SECTION 14.05 Payment of Securities Called for Redemption..............................................58
SECTION 14.06 Conversion Arrangement on Call for Redemption............................................59
ARTICLE XV SUBORDINATION OF SECURITIES..................................................................60
SECTION 15.01 Agreement to Subordinate.................................................................60
SECTION 15.02 Default on Senior Indebtedness...........................................................60
SECTION 15.03 Liquidation; Dissolution; Bankruptcy.....................................................61
SECTION 15.04 Subrogation..............................................................................62
SECTION 15.05 Debenture Trustee to Effectuate Subordination............................................63
SECTION 15.06 Notice by the Corporation................................................................63
SECTION 15.07 Rights of the Debenture Trustee; Holders of Senior Indebtedness..........................64
SECTION 15.08 Subordination May Not Be Impaired........................................................64
ARTICLE XVI EXTENSION OF INTEREST PAYMENT PERIOD.........................................................65
SECTION 16.01 Extension of Interest Payment Period.....................................................65
SECTION 16.02 Notice of Extension......................................................................66
ARTICLE XVII CONVERSION OF SECURITIES.....................................................................66
SECTION 17.01 Conversion Rights........................................................................66
iv
SECTION 17.02 Conversion Procedures....................................................................68
SECTION 17.03 Conversion Ratio Adjustments.............................................................71
SECTION 17.04 Share Exchange, Consolidation, Merger or Sale of Assets..................................76
SECTION 17.05 Notice of Adjustments of Conversion Ratio................................................76
SECTION 17.06 Prior Notice of Certain Events...........................................................77
SECTION 17.07 Debenture Trustee Not Responsible For Determining Conversion Ratio Or
Adjustments..............................................................................78
TESTIMONIUM......................................................................................................63
SIGNATURES.......................................................................................................63
EXHIBIT A.......................................................................................................A-1
v
THIS INDENTURE, dated as of March 11, 2002, between Commerce Bancorp,
Inc., a New Jersey 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 by
the holders thereof, the Corporation covenants and agrees with the Debenture
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Securities, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture shall have the respective meanings specified in this Section
1.01. All other terms used in this Indenture which are defined in the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), or which are by
reference therein defined in the Securities Act, 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) Preferred Securities; (vi) Direct Action; and (vii)
Distributions. 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 2.05(c).
"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
6.15.
"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.
"Business Day" shall mean 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, regulation or executive order to close.
"Closing Price" with respect to any securities on any date means the
closing per share sale price (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices) on such date as reported in
the composite transactions for the principal United States securities exchange
on which such security is traded (which is currently the New York Stock Exchange
with respect to the Common Stock) or, if the security is not listed on a United
States national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated, or if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from time to time
by the Board of Directors for that purpose, or a price determined in good faith
by the Board of Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive.
"Commerce Capital Trust II" or the "Trust" shall mean Commerce Capital
Trust II, a Delaware business trust created for the purpose of issuing its
undivided beneficial interests in connection with the issuance of Securities
under this Indenture.
"Commission" shall mean the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Securities" shall mean undivided beneficial interests in the
assets of the Trust which are designated as "Common Securities" and rank pari
passu with Preferred Securities issued by the Trust, subject to the terms of the
Declaration.
"Common Stock" shall mean the Common Stock, par value $1.00 per share,
of the Corporation or any other class of stock resulting from changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
"Compounded Interest" shall have the meaning set forth in Section
16.01.
"Conversion Price" shall mean the quotient obtained by dividing $50.00
by the Conversion Ratio and rounding the result to four decimal places.
"Conversion Ratio" shall have the meaning set forth in Section
17.01(a).
2
"Conversion Request" means (a) the irrevocable request to be given by a
Securityholder to the Conversion Agent directing the Conversion Agent to convert
the Securities into shares of Common Stock and (b) the irrevocable request to be
given by a holder of Preferred Securities to the Conversion Agent directing the
Conversion Agent to exchange such stock on behalf of such holder.
"Corporation" shall mean Commerce Bancorp, Inc., a New Jersey
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 the Chairman, the
Chief Executive Officer, the President, a Vice Chairman, a Vice President, the
Comptroller, the Secretary or an Assistant Secretary of the Corporation, and
delivered to the Debenture Trustee.
"Current Market Price" shall have the meaning set forth in Section
17.03(f).
"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" means the Amended and Restated Declaration of Trust of
the Trust, dated as of March 11, 2002, as amended from time to time.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulted Interest" shall have the meaning set forth in Section 2.10.
"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 2.04(d).
"Dissolution Event" means 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.
3
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.01.
"Federal Reserve" shall mean the Board of Governors of the Federal
Reserve System.
"Global Security" means, 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, all in accordance with
the Indenture, which shall be registered in the name of the Depositary or its
nominee.
"Indebtedness" shall mean, whether recourse is to all or a portion of
the assets of the Corporation and whether or not contingent, (i) every
obligation of the Corporation for money borrowed; (ii) every obligation of the
Corporation evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of the Corporation
with respect to letters of credit, 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 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 equally with and not prior or senior 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 in right of payment to the Trust 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 equally with or prior to the Securities (and any
other Indebtedness Ranking on a Parity with the Securities) in right of payment
upon the happening of the dissolution or winding-up or liquidation or
reorganization of the Corporation. The securing of any Indebtedness, otherwise
constituting Indebtedness Ranking Junior to the Securities, shall not be deemed
to prevent such Indebtedness from constituting Indebtedness Ranking Junior to
the Securities.
4
"Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.
"Interest" shall mean, without duplication, all interest payable
hereunder on the principal at the Coupon Rate plus Compounded Interest,
Liquidated Damages and Additional Sums, if any, that may be payable on the
Securities pursuant to the terms of the Indenture, and other amounts payable
hereunder with respect to any overdue installment of principal or Interest.
"Interest Payment Date" shall have the meaning set forth in Section
2.05(a).
"Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in such case as amended from time to time.
"Investment Company Event" means the receipt by the Corporation and the
Trust of an opinion of independent securities counsel, experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, any laws (or any regulations
thereunder) of the United States or any rules, guidelines or policies of any
applicable regulatory agency or authority or (b) any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of original issuance of the Preferred
Securities, that the Trust is, or within 90 days of the opinion will be
considered an "investment company" that is required to be registered under the
Investment Company Act.
"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 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 shall mean Liquidated Damages as defined in
the Registration Rights Agreement, dated as of March 11, 2002, among the
Corporation, the Trust and Xxxxxxx Xxxxx & Co. and Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated, on behalf of itself and as representative of the other
initial purchasers named therein; provided however, that Liquidated Damages
shall be due and payable only at the times, in the amounts and to the Persons as
provided in the Registration Rights Agreement.
"Maturity Date" shall mean March 11, 2032.
"Mortgage" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.04(a)(ii).
5
"Officers" shall mean any of the Chairman, the Chief Executive Officer,
the President, a Vice President, the Chief Financial Officer, the Secretary or
an Assistant Secretary of the Corporation.
"Officers' Certificate" shall mean a certificate signed by two Officers
and delivered to the Debenture Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be an employee of the Corporation, and who shall be reasonably acceptable to the
Debenture Trustee.
"Other Debentures" means all junior subordinated debentures issued by
the Corporation from time to time and sold to trusts established or to be
established by the Corporation (if any), in each case similar to the Trust.
"Other Guarantees" means all guarantees to be issued by the Corporation
with respect to preferred securities (if any) and issued to other trusts
established or 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
redemption 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 redeemed prior to
maturity thereof, notice of such redemption 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 2.07 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" or "persons" 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 means every previous
Security evidencing all or a portion of the same debt and as that evidenced by
such particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
6
"Preferred Securities" shall mean undivided beneficial interests in the
assets of the Trust which are designated as "Preferred Securities" and rank pari
passu with the Common Securities issued by the Trust, subject to the terms of
the Declaration.
"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.
"Property Trustee" shall have the same meaning as set forth in the
Declaration.
"Purchase Agreement" shall mean the Purchase Agreement, dated as of
March 6, 2002, among the Corporation, the Trust and the initial purchasers named
therein.
"Redemption Date" or "redemption date" or "date fixed for redemption,"
when used with respect to any Security to be redeemed, means the date fixed for
such redemption pursuant to this Indenture.
"Redemption Price" shall mean an amount equal to 100% of the principal
amount of Securities to be redeemed plus accrued and unpaid Interest thereon to
the date of such redemption.
"Regulatory Capital Event" means that the Corporation shall have
received 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, any laws (or any regulations
thereunder) of the United States or any rules, guidelines or policies of any
applicable regulatory agency or authority or (b) 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 Preferred
Securities, the Preferred Securities do not constitute, or within 90 days of the
date of the opinion, will not constitute, Tier 1 Capital (or its then equivalent
if the Corporation were subject to such Capital Requirement); provided, however,
that the distribution of the Securities in connection with the liquidation of
the Trust by the Corporation, as sponsor, shall not in and of itself constitute
a Regulatory Capital Event unless such liquidation shall have occurred in
connection with a Tax Event.
"Responsible Officer" shall mean any officer of the Debenture Trustee's
corporate trust department with direct responsibility for the administration of
the Indenture and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" or "Security" mean any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Securities Act" shall mean the Securities Act of 1933, as amended.
7
"Securityholder" "holder of Securities", or other similar terms, shall
mean any Person in whose name at the time a particular Security is registered on
the 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 2.06(a).
"Senior Indebtedness" shall mean the principal of (and premium, if any)
and interest, if any, on all Indebtedness, whether outstanding on the date of
execution of this Indenture or hereafter created, assumed or incurred, except
Indebtedness Ranking on a Parity with the Securities or Indebtedness Ranking
Junior to the Securities, and any deferrals, renewals or extensions of such
Senior Indebtedness.
"Special Event" means either an Investment Company Event, a Regulatory
Capital Event or a Tax Event.
"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 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 Corporation and the Trust of
an opinion of, independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, change in or announced prospective
change in, the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein, or (b) any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of original
issuance of the Preferred 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 interest received or
accrued on the Securities, (ii) 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.
8
"Trading Days" with respect to the Corporation's Common Stock means (a)
if the Corporation's Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities exchange is
open for business or (b) if the Corporation's Common Stock is quoted on The
Nasdaq Stock Market or any similar system of automated dissemination of
quotations of securities prices, days on which trades may be made on such
system.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939 as in
force at the date of execution of this Indenture, except as provided in Section
9.03; provided, however, that, in the event the Trust Indenture Act is amended
after such date, "Trust Indenture Act" shall mean, to the extent required by any
such amendment, the Trust Indenture Act as so amended.
"Trust Securities" shall mean the Preferred Securities and the Common
Securities, collectively.
"Trust Securities Guarantee" shall mean any guarantee 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 Preferred
Securities and the Common Securities, if any.
"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 redeemable 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.
ARTICLE II
SECURITIES
SECTION 2.01 Forms Generally
The Securities and the Debenture Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, 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. The Securities shall be issued in
denominations of $50 and integral multiples thereof.
9
SECTION 2.02 Execution and Authentication
One 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 form of Debenture Trustee's certificate of authentication to be
borne by the Securities shall be substantially as set forth in Exhibit A hereto.
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, $206,185,600 aggregate principal amount
of the Securities.
SECTION 2.03 Form and Payment
Except as provided in Section 2.04, the Securities shall be issued in
fully registered certificated form without interest coupons. Principal of and
Interest on the Securities issued in certificated form will be payable, the
transfer of such Securities will be registrable and such Securities will be
exchangeable for Securities bearing identical terms and provisions at the office
or agency of the Corporation maintained for such purpose under Section 3.02;
provided, however, that payment of Interest with respect to Securities (other
than a Global Security) may be made at the option of the Corporation (i) by
check mailed to the holder at such address as shall appear in the Security
Register or (ii) by transfer to an account maintained by the Person entitled
thereto, provided that proper transfer instructions have been received in
writing by the relevant record date. Notwithstanding the foregoing, so long as
the holder of any Securities is the Property Trustee, the payment of the
principal of and Interest on such Securities held by the Property Trustee will
be made at such place and to such account as may be designated by the Property
Trustee.
SECTION 2.04 Global Security
(a) In connection with a Dissolution Event,
(i) if any Preferred Securities are held in book-entry
form, 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 2.06), 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
10
(ii) if any Preferred Securities are held in certificated
form, the related Definitive Securities may be presented
to the Debenture Trustee by the Property Trustee and any
Preferred Security certificate which represents Preferred
Securities other than Preferred Securities in book-entry
form ("Non Book-Entry Preferred 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
Preferred Securities until such Preferred Security
certificates are presented to the security registrar for
the Securities for transfer or reissuance, at which time
such Preferred Security certificates will be cancelled and
a Security, registered in the name of the holder of the
Preferred Security certificate or the transferee of the
holder of such Preferred Security certificate, as the case
may be, with an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Security
certificate cancelled, will be executed by the Corporation
and delivered to the Debenture Trustee for authentication
and delivery in accordance with this Indenture. 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, that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, conversions
and redemptions. Any endorsement of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Debenture Trustee, in accordance with instructions
given by the Corporation as required by this Section 2.04.
(c) The Global Securities may be transferred, in whole but not
in part, only to the Depositary, 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 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 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
11
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 2.05 Interest
(a) Each Security will bear interest at the rate of 5.95% 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 March 11, 2002, until the principal thereof becomes due and payable, and at
the Coupon Rate on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
Interest, compounded quarterly, payable (subject to the provisions of Article
XVI) quarterly in arrears on June 15, September 15, December 15 and March 15 of
each year (each, an "Interest Payment Date") commencing on June 15, 2002, to the
Person in whose name such Security or any Predecessor Security is registered, as
of 5:00 p.m., New York City time on the regular record date for such interest
installment, which shall be the first day of the month, whether or not a
Business Day, in which the relevant Interest Payment Date occurs (or would have
occurred but for fact that the Interest Payment Date was not a Business Day).
(b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period shorter that a full
quarterly period will be computed on the basis of a 30-day month, and for any
period less than a full calendar month, the number of days elapsed per 30-day
month. In the event that any Interest Payment Date falls on a day that is not a
Business Day, then payment of Interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any Interest or other
payment in respect of any such delay), except that if such 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.
(c) If at any time the Trust is required to pay any taxes,
duties, assessments or governmental charges of whatever nature, other than
withholding taxes, imposed by the United States, or any other taxing authority,
then the Corporation will be required to pay additional amounts on the
Securities. The additional amounts will be sufficient so that the net amounts
received and retained by the Trust after paying any such taxes, duties,
assessments or other governmental charges will be not less than the amounts the
Trust would have received had no such taxes, duties, assessments or other
governmental charges been imposed. The intention of this clause is that the
Trust will be in the same position it would have been if it did not have to pay
such taxes, duties, assessments or other charges. The amounts payable pursuant
to this paragraph are referred to as "Additional Sums."
12
SECTION 2.06 Transfer and Exchange
(a) To permit registrations of transfers, 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 redemption or any
notice of selection of Securities for redemption 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 Securities selected for redemption in whole or in
part except, in the case of any Securities being redeemed in part, any portion
thereof not to be redeemed.
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.
(b) Every Security that bears or is required under this
Section 2.6(b) to bear the legend set forth in this Section 2.6(b) (together
with any Common Stock issued upon conversion of the Securities and required to
bear the legend set forth in Section 2.6(c), collectively, the "Restricted
Securities") or Section 2.6(c), as the case may be, shall be subject to the
restrictions on transfer set forth in this Section 2.6(b) or Section 2.6(c), as
the case may be, (including those set forth in the legends set forth below)
unless such restrictions on transfer shall be waived by written consent of the
Corporation, and the Holder of each such Restricted Security, by such Holder's
acceptance thereof, agrees to be bound by all such restrictions on transfer. As
used in Sections 2.6(b) and 2.6(c), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision) and
provided that the holder has not been an Affiliate of the Company at any time
during the three-month period preceding such date, any certificate evidencing
such Security and all Securities issued in exchange therefor or substitution
thereof (other than Common Stock, if any, issued upon conversion thereof, which
13
shall bear the legend set forth in Section 2.6(c), if applicable) shall bear a
legend in substantially the following form, unless such Security has been sold
pursuant to a registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such
transfer), or unless otherwise agreed by the Corporation in writing, with
written notice thereof to the Trustee:
THIS SECURITY AND THE UNDERLYING SHARES OF COMMERCE BANCORP, INC.
COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF UNDERLYING COMMERCE BANCORP, INC. COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR
THEREIN 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
SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE"),
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH COMMERCE BANCORP, INC. OR ANY AFFILIATE OF COMMERCE BANCORP,
INC. WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY
(A) TO COMMERCE BANCORP, INC. OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO COMMERCE BANCORP, INC.'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER UPON THE EARLIER OF THE TRANSFER OF THE SECURITIES EVIDENCED
HEREBY PURSUANT TO CLAUSE (C) ABOVE AND THE RESALE RESTRICTION TERMINATION DATE.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE (C) ABOVE) A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
14
BY ITS ACQUISITION OF THIS CERTIFICATE THE HOLDER REPRESENTS THAT
EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER SIMILAR RETIREMENT PLAN
OR ARRANGEMENT, WHETHER OR NOT SUBJECT TO 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") (OR ANY SIMILAR LAWS OR
REGULATIONS) OR AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE THE
ASSETS OF ANY SUCH PLANS AND ARRANGEMENTS (EACH, A "PLAN") AND NO PART OF THE
ASSETS TO BE USED BY THE HOLDER TO ACQUIRE AND/OR HOLD THIS CERTIFICATE OR ANY
INTEREST THEREIN CONSTITUTES PLAN ASSETS OF ANY PLAN OR (II) THE ACQUISITION AND
HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED
TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION
UNDER ANY OTHER APPLICABLE LAWS AND REGULATIONS THAT ARE SIMILAR TO THE
PROVISIONS OF TITLE I OF ERISA OR SECTION 4975 OF THE CODE.
(c) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of such
Security shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or such Common Stock has been issued upon
conversion of Securities that have been transferred pursuant to a registration
statement that has been declared effective under the Securities Act, or unless
otherwise agreed by the Corporation in writing with written notice thereof to
the transfer agent:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN 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 SUCH SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER
OF THE ORIGINAL ISSUE DATE OF THE SECURITY UPON THE CONVERSION OF WHICH THE
COMMON STOCK EVIDENCED HEREBY WAS ISSUED AND THE LAST DATE ON WHICH COMMERCE
BANCORP, INC. OR ANY AFFILIATE OF COMMERCE BANCORP, INC. WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO COMMERCE BANCORP,
INC. OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO COMMERCE BANCORP INC.'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO ANY
15
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM PROVIDED BY COMMERCE BANCORP, INC. UPON REQUEST IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER UPON THE EARLIER OF THE TRANSFER OF THE SECURITIES
EVIDENCED HEREBY PURSUANT TO CLAUSE (C) ABOVE AND THE RESALE RESTRICTION
TERMINATION DATE. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (C) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
SECTION 2.07 Replacement Securities
If any mutilated Security is surrendered to the Debenture Trustee, or
the Corporation and the Debenture Trustee receive evidence to their satisfaction
of the destruction, loss or theft of any Security, the Corporation shall issue
and the Debenture Trustee shall authenticate a replacement Security if the
Debenture Trustee's and the Corporation's requirements, as the case may be, 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 2.08 Temporary Securities
Pending the preparation of Definitive Securities, the Corporation may
execute, and upon Corporation Order the Debenture Trustee shall authenticate and
make available for delivery, temporary Securities that are printed,
lithographed, typewritten, mimeographed or otherwise reproduced, in any
authorized denomination, substantially of the tenor of the Definitive Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities.
If temporary Securities are issued, the Corporation shall cause
Definitive Securities to be prepared without unreasonable delay. The Definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
16
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 2.09 Cancellation
The Corporation at any time may deliver Securities to the Debenture
Trustee for cancellation. The Debenture Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment,
replacement, conversion or cancellation and shall retain or destroy cancelled
Securities in accordance with its normal practices (subject to the record
retention requirement of the Exchange Act) unless the Corporation directs them
to be returned to it. The Corporation may not issue new Securities to replace
Securities that have been redeemed, converted or paid (except to evidence any
portion that has not been redeemed, converted or paid) or that have been
delivered to the Debenture Trustee for cancellation.
SECTION 2.10 Defaulted Interest
Any Interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the holder on the
relevant regular record date by virtue of having been such holder; and such
Defaulted Interest shall be paid by the Corporation, at its election, as
provided in clause (a) or clause (b) below:
(a) The Corporation may make payment of any Defaulted Interest
on Securities to the Persons in whose names such Securities (or their respective
Predecessor Securities) 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 (which date shall be sufficiently
in advance of such notice to permit the Debenture Trustee time to take the
actions contemplated by this Section 2.10), 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.
17
Notice of the proposed payment of such Defaulted Interest and the special record
date therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered on such special record date and shall be
no longer payable pursuant to the following clause (b).
(b) The Corporation may make payment of any Defaulted Interest
on any Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice given
by the Corporation to the Debenture Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the Debenture
Trustee.
SECTION 2.11 CUSIP Numbers
The Corporation in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Debenture Trustee shall use "CUSIP"
numbers in notices of redemption or conversion as a convenience to
Securityholders; provided 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 redemption or conversion and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption or conversion shall not be affected by any
defect in or omission of such numbers. The Corporation will promptly notify the
Debenture Trustee of any change in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 3.01 Payment of Principal and Interest
The Corporation covenants and agrees for the benefit of the holders of
the Securities that it will duly and punctually pay or cause to be paid the
principal of and Interest on the Securities at the place, at the respective
times and in the manner provided herein. Except as provided in Section 2.03,
each installment of Interest on the Securities may be paid by mailing checks for
such Interest payable to the order of the holders of Securities entitled thereto
as they appear in the Security Register. The Corporation further covenants to
pay any and all amounts, including, without limitation, Additional Sums, as may
be required pursuant to Section 2.05(c), Liquidated Damages, as may be required
pursuant to the Registration Rights 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
18
Corporation in respect of the Securities or of 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, registration of transfer and
for exchange in the manner provided in this Indenture, and the Corporation may
from time to time rescind such designation, as the Corporation may deem
desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Corporation of its obligation to
maintain any such office or agency in 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.
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,
(i) that it will hold all sums held by it as such agent
for the payment of the principal of or Interest on the
Securities (whether such sums have been paid to it by the
Corporation or by any other obligor on the Securities) in
trust for the benefit of the holders of the Securities;
and
(ii) that it will give the Debenture Trustee notice of any
failure by the Corporation (or by any other obligor on the
Securities) to make any payment of the principal of or
Interest on the Securities when the same shall be due and
payable.
(b) If the Corporation shall act as its own paying agent, it
will, on or before each due date of the principal of or Interest on the
Securities, set aside, segregate and hold in trust for the benefit of the
holders of the Securities a sum sufficient to pay such principal or Interest so
becoming due and will notify the Debenture Trustee of any failure to take such
action and of any failure by the Corporation (or by any other obligor under the
Securities) to make any payment of the principal of or Interest on the
Securities when the same shall become due and payable.
19
(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. For purposes of this Section 3.05, Default shall be determined
without regard to any period of grace or requirement of notice provided for
herein.
SECTION 3.06 Compliance with Consolidation Provisions
The Corporation will not, while any of the Securities remain
outstanding, consolidate with or merge into any other Person or convey, transfer
or lease all or substantially all of its properties to any Person, and no Person
may consolidate with or merge into the Corporation or convey, transfer or lease
all or substantially all of its properties to the Corporation, unless the
provisions of Article X hereof are complied with.
SECTION 3.07 Limitation on Dividends
The Corporation will not, and will not permit any of its Subsidiaries
to, (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 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 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
20
with the implementation of, a shareholder's 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 Trust Securities Guarantee,
(d) 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 shares resulting from a reclassification of the Corporation's capital
stock, (f) 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 (g) 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), if at such time (1) an event has
occurred with the giving of notice or the lapse of time, or both, would
constitute an Event of Default and the Corporation has not taken reasonable
steps to cure the event, (2) the Corporation shall be in default with respect to
its payment obligations under the Trust Securities Guarantee or (3) the
Corporation shall have given notice of its election of the exercise of its right
to extend the Interest payment period pursuant to Section 16.01 and has not
rescinded the notice, or any such extension shall be continuing.
SECTION 3.08 Covenants as to Commerce Capital Trust II
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: (a) 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, (b) will use commercially reasonable efforts to cause the Trust to
remain a statutory business trust, except in connection with a distribution of
Securities to the holders of Trust Securities in liquidation of the Trust; (c)
will not voluntarily terminate, wind-up or liquidate the Trust, except in
connection with (i) a distribution of the Securities to the holders of the
Preferred Securities in liquidation of the Trust, (ii) the redemption of all of
the Preferred Securities and Common Securities issued by the Trust, (iii) in
connection with mergers, consolidations or amalgamations, in each case as
permitted by the Declaration; (d) will use its reasonable efforts, consistent
with the terms and provisions of the Declaration, to cause the Trust to remain
classified as a grantor trust and not as an association taxable as a corporation
for United States federal income tax purposes; and (e) will use its reasonable
efforts to ensure that the Trust will not be an "investment company" for
purposes of the Investment Company Act of 1940.
SECTION 3.09 Payment of Expenses
The Corporation, in its capacity as borrower with respect to the
Securities, shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Securities and the Trust Securities, including commissions
to the initial purchasers payable pursuant to the Purchase Agreement and
compensation of the Debenture Trustee in accordance with the provisions of
Section 6.06;
21
(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, the Delaware Trustee and the Administrative Trustees, 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 duties, assessments and other
governmental charges imposed on the Trust by the United States or any other
taxing authority 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, 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 IV
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 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,
22
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
Securities 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 5 Business Days after the
receipt of such application, at its election, either:
(i) 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
(ii) 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 of such series or
all Securities, as the case may be, 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.
23
(c) Each and every holder of Securities, by receiving and
holding the same, agrees with the Corporation and the Debenture Trustee that
neither the Corporation nor the Debenture Trustee nor any paying agent shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the holders of Securities in accordance with the
provisions of subsection (b) of this Section 4.02, regardless of the source from
which such information was derived, and that the Debenture Trustee shall not be
held accountable by reason of mailing any material pursuant to a request made
under said subsection (b).
SECTION 4.03 Reports by the Corporation
(a) The Corporation covenants and agrees to file with the
Debenture Trustee, within 15 days after the date on which the Corporation is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as said Commission may from time to time by rules and
regulations prescribe) which the Corporation may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if
the Corporation is not required to file information, documents or reports
pursuant to either of such sections, then to provide to the Debenture Trustee,
such of the supplementary and periodic information, documents and reports which
would have been required pursuant to Section 13 of the Exchange Act in respect
of a security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations.
(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).
24
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 sixty days after
May 15th of each year following the date of this Indenture, commencing May 15,
2002, deliver to Securityholders a brief report, which complies with the
provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Debenture Trustee with each
stock exchange, if any, upon which the Securities are listed, with the
Commission and with the Corporation. The Corporation will promptly notify the
Debenture Trustee when the Securities are listed on any stock exchange.
ARTICLE V
REMEDIES OF THE DEBENTURE TRUSTEE AND SECURITYHOLDERS ON EVENT
OF DEFAULT
SECTION 5.01 Events of Default
One or more of the following events of default shall constitute an
Event of Default hereunder (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any Interest on the Securities,
whether or not such payment is prohibited by the subordination provisions of
Article XV, or any Other Debentures 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
shall not constitute a default in the payment of Interest for this purpose; or
(b) default in the payment of any principal of the Securities
(whether or not such payment is prohibited by the subordination provisions of
Article XV) or any Other Debentures when due whether at maturity, upon
redemption, by declaration of acceleration of maturity or otherwise; or
(c) default in the performance, or breach, of any covenant of
the Corporation in this Indenture (other than a covenant 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
25
(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; or
(f) the voluntary or involuntary dissolution, winding-up, or
termination of the Trust, except in connection with (i) the distribution of the
Securities to the holders of the Trust Securities in liquidation of the Trust
upon the Corporation's receipt of all required regulatory approvals, (ii) the
redemption or conversion of all outstanding Trust Securities of the Trust and
(iii) mergers, consolidations or amalgamations in accordance with the terms and
conditions set forth in Section 3.15 of the Declaration.
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. If the Debenture Trustee or the holders of Securities do not make
such a declaration, the holders of at least 25% in aggregate liquidation amount
of the Preferred Securities will have such right.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Securities shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, (i)
the Corporation shall pay or shall deposit with the Debenture Trustee a sum
sufficient to pay (A) all matured installments of Interest upon all the
Securities and the principal of any and all Securities which shall have become
due otherwise than by acceleration (with interest upon such principal and, to
the extent that payment of such interest is enforceable under applicable law, on
overdue installments of Interest, at the Coupon Rate 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. If the Holders of the Securities fail to annul such
declaration and waive such Default, the holders of a majority in aggregate
liquidation amount of the Preferred Securities shall have such right.
26
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 upon 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 on any of the Securities as and when the same shall have become due
and payable, whether at maturity of the Securities or upon redemption or by
declaration or otherwise, then, upon demand of the Debenture Trustee, the
Corporation will pay to the Debenture Trustee, for the benefit of the holders of
the Securities, the whole amount that then shall have become due and payable on
all such Securities for principal or Interest or both, as the case may be, with
interest upon the overdue principal (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) and upon the overdue installments of
Interest 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 a 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 Xxxxx 00, Xxxxxx Xxxxxx 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
27
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.
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:
28
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: In case the principal of the outstanding Securities in respect
of which moneys have been collected shall not have become due and be unpaid, to
the payment of the amounts then due and unpaid upon Securities for principal of
and Interest on the Securities, in respect of which or for the benefit of which
money has been collected, ratably, without preference of priority of any kind,
according to the amounts due on such Securities for principal and Interest,
respectively; and
Fourth: To the Corporation.
SECTION 5.04 Proceedings by Securityholders
No holder of any Security shall have any right by virtue of or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Debenture
Trustee written notice of an Event of Default and of the continuance thereof
with respect to the Securities specifying such Event of Default, as hereinbefore
provided, and unless also the holders of not less than 25% in aggregate
principal amount of the Securities then outstanding shall have made written
request upon the Debenture Trustee to institute such action, suit or proceeding
in its own name as Debenture Trustee hereunder and shall have offered to the
Debenture Trustee such indemnity reasonably satisfactory to it 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
Interest 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.
29
The Corporation and the Debenture Trustee acknowledge that pursuant to
the Declaration, the holders of Preferred 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 under this Indenture and the
Securities.
SECTION 5.05 Proceedings by Debenture Trustee
In case an Event of Default occurs with respect to Securities and is
continuing, the Debenture Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Debenture Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or by
proceeding in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Debenture Trustee by this Indenture or by law.
SECTION 5.06 Remedies Cumulative and Continuing
All powers and remedies given by this Article V to the Debenture
Trustee or to the Securityholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any other powers and remedies available
to the Debenture Trustee or the holders of the Securities, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and 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 its board of directors or trustees, executive committee, or a
trust committee of directors or trustees and/or 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
30
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 or Event of Default (a) in the payment of
principal of or Interest on any of the Securities (unless such Default has been
cured and a sum sufficient to pay all matured installments of Interest and
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee) or (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 where a consent under this Indenture would require the consent of
holders of more than a majority of the aggregate of the Securities, such waiver
shall not be effective until the holders of at least the same proportion in the
aggregate stated liquidation amount of Trust Securities shall have consented to
such waiver. Upon any such waiver, the Default covered thereby shall be deemed
to be cured for all purposes of this Indenture and the Corporation, the
Debenture Trustee and the holders of the Securities shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon. Whenever any Default or Event of Default hereunder shall have been
waived as permitted by this Section 5.07, said Default or Event of Default shall
for all purposes of the Securities and this Indenture be deemed to have been
cured and to be not continuing.
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 Defaults known to the Debenture Trustee, 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), (e) and (f) 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); and
provided that, except in the case of Default in the payment of the principal of
or Interest 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; and 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.
31
SECTION 5.09 Undertaking to Pay Costs
All parties to this Indenture agree, and each holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Debenture Trustee for any action
taken or omitted by it as Debenture Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.09 shall not apply to any suit instituted
by the Debenture Trustee, to any suit instituted by any Securityholder, or group
of Securityholders, holding in the aggregate more than 10% in aggregate
principal amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of or
Interest on any Security against the Corporation on or after the same shall have
become due and payable.
ARTICLE VI
CONCERNING THE DEBENTURE TRUSTEE
SECTION 6.01 Duties and Responsibilities of Debenture Trustee
With respect to the holders of the Securities issued hereunder, the
Debenture Trustee, prior to the occurrence of an Event of Default and after the
curing or waiving of all 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 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 and after
the curing or waiving of all Events of Default which may have occurred,
(i) 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
32
(ii) 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 (but need not confirm or
investigate the accuracy of mathematical calculations or
other facts stated therein);
(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
(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 there is reasonable ground for believing that
the repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
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;
33
(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 security or indemnity reasonably satisfactory to the
Debenture Trustee 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 (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 indemnity reasonably satisfactory to the Debenture
Trustee 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 with respect to the Securities unless (1)
such Default is a Default under Sections 5.01(a) (other than a Default with
respect to the payment of Compounded Interest, Liquidated Damages or Additional
Sums) and 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;
(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;
(j) the rights, privileges, protections, immunities and
benefits given to the Debenture Trustee, including without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, the Debenture
Trustee in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder; and
34
(k) the Debenture Trustee may request that the Corporation
deliver an Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant to
this Indenture, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superceded.
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 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 the Chairman
of the Board of Directors, the President or a Vice President or the Treasurer or
an Assistant Treasurer of the Corporation.
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
35
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 or 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.
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 the 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 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.
36
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 50 million U.S. dollars ($50,000,000) and subject to
supervision or examination by federal, state, territorial, or District of
Columbia authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 6.09 the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
The Corporation may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Corporation, serve
as Debenture Trustee.
In case at any time the Debenture Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.09, the Debenture Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10 Resignation or Removal of Debenture Trustee
(a) The Debenture Trustee, or any trustee or trustees
hereafter appointed, may at any time resign by giving written notice of such
resignation to the Corporation and by mailing notice thereof to the holders of
the Securities at their addresses as they shall appear on the Security register.
Upon receiving such notice of resignation, the Corporation shall promptly
appoint a successor trustee or trustees by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Debenture Trustee
and one copy to the successor trustee. If no successor trustee shall have been
so appointed and have accepted appointment within 60 days after the mailing of
such notice of resignation to the affected Securityholders, the resigning
Debenture Trustee, at the expense of the Corporation, 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:
(i) 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
(ii) 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
37
(iii) 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 such nomination the Corporation
objects thereto, or if no successor trustee shall have been so appointed and
shall have accepted appointment within 30 days after such removal, in which case
the Debenture Trustee so removed or any Securityholder, upon the terms and
conditions and otherwise as in subsection (a) of this Section 6.10 provided, may
petition any court of competent jurisdiction for an appointment of a successor
trustee.
(d) Any resignation or removal of the Debenture Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 6.10 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 6.11.
SECTION 6.11 Acceptance by Successor Debenture Trustee
Any successor trustee appointed as provided in Section 6.10 shall
execute, acknowledge and deliver to the Corporation and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the retiring trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, on the written request of the Corporation or of the successor
trustee, the trustee ceasing to act shall, upon payment of any 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.
38
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
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Debenture Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Debenture Trustee, shall be the successor of
the Debenture Trustee hereunder without the execution or filing of any paper or
any further act on the part of any of the parties hereto.
In case 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, conversion 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 Co-trustees and Separate Trustees
At any time or times, for the purpose of meeting the legal requirements
of any applicable jurisdiction, the Corporation and the Debenture Trustee shall
have power to appoint, and, upon the written request of the Debenture Trustee or
of the holders of at least 25% in principal amount of the Securities then
outstanding, the Corporation shall for such purpose join with the Debenture
Trustee in the execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Debenture
Trustee, or to act as separate trustee, jointly with the Debenture Trustee, or
39
to act as separate trustee, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons, in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Corporation
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or if an Event of Default shall have occurred and be
continuing, the Debenture Trustee alone shall have power to make such
appointment.
Should any written instrument or instruments from the Corporation be
required by any co-trustee or separate trustee so appointed to more fully
confirm to such co-trustee or separate trustee such property, title, right or
power, any and all such instruments shall, on request, be executed, acknowledged
and delivered by the Corporation.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following conditions:
(a) the Securities shall be authenticated and delivered, and
all rights, powers, duties and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Debenture Trustee hereunder, shall be exercised
solely, by the Debenture Trustee;
(b) the rights, powers, duties and obligations hereby
conferred or imposed upon the Debenture Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and exercised or
performed either by the Debenture Trustee or by the Debenture Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent that under
any law of any jurisdiction in which any particular act is to be performed, the
Debenture Trustee shall be incompetent or unqualified to perform such act, in
which event such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(c) the Debenture Trustee at any time, by an instrument in
writing executed by it, with the concurrence of the Corporation, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, if an Event of Default shall have occurred and be continuing, the
Debenture Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the Corporation.
Upon the written request of the Debenture Trustee, the Corporation shall join
with the Debenture Trustee in the execution and delivery of all instruments and
agreements, necessary or proper to effectuate such resignation or removal. A
successor to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Debenture Trustee, or
any other such trustee hereunder; and
(e) any notice from the holders of Securities delivered to the
Debenture Trustee shall be deemed to have been delivered to each such co-trustee
and separate trustee.
40
SECTION 6.15 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, 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 6.15 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
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion 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 6.15 without the execution or filing of any paper or any further act on
the part of the parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Debenture Trustee and to the Corporation. The
Debenture Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
to the Corporation. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section 6.15, the Debenture Trustee may, and upon the
request of the Corporation shall, promptly appoint a successor Authenticating
Agent eligible under this Section 6.15, shall give written notice of such
appointment to the Corporation and the Corporation 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 borrower, 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.
41
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01 Action by Securityholders
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the fact that at
the time of taking any such action the holders of such specified percentage have
joined therein may be evidenced (a) by any instrument 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,
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.
42
SECTION 7.03 Who Are Deemed Absolute Owners
Prior to due presentment for registration of transfer of any Security,
the Corporation, the Debenture Trustee, any Authenticating Agent, any paying
agent, any transfer agent and any security registrar for the Securities may deem
the person in whose name such Security shall be registered upon the Security
Register to be, and may treat him as, the absolute owner of such Security
(whether or not such Security shall be overdue) for the purpose of receiving
payment of or on account of the principal of and (subject to Section 2.05)
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 that for the
purposes of determining whether the Debenture Trustee shall be protected in
relying on any such direction, consent or waiver, only Securities which a
Responsible Officer of the Debenture Trustee actually knows are so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as outstanding for the purposes of this Section 7.04 if the pledgee
shall establish to the satisfaction of the Debenture Trustee the pledgee's right
to vote such Securities and that the pledgee is not the Corporation or any such
other obligor or Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Corporation or any such other
obligor. In the case of a dispute as to such right, any decision by the
Debenture Trustee taken upon the advice of counsel shall be full protection to
the Debenture Trustee.
SECTION 7.05 Revocation of Consents; Future Holders Bound
At any time prior to (but not after) the evidencing to the Debenture
Trustee, as provided in Section 7.01, of the taking of any action by the holders
of the percentage in aggregate principal amount of the Securities specified in
this Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.01, the serial number of which is shown by the evidence to
be included in the group of Securities the holders of which have consented to
such action may, by filing written notice with the Debenture Trustee at its
principal office and upon proof of holding as provided in Section 7.02, revoke
such action so far as concerns such Security (or so far as concerns the
principal amount represented by any exchanged or substituted Security). Except
as aforesaid any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Security or any Security issued in exchange or substitution therefor.
43
ARTICLE VIII
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 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 New York, New York 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.
44
SECTION 8.04 Qualifications for Voting
To be entitled to vote at any meeting of Securityholders a Person shall
(a) be a holder of one or more Securities or (b) a Person appointed by an
instrument in writing as proxy by a holder of one or more Securities. The only
Persons who shall be entitled to be present or to speak at any meeting of
Securityholders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Debenture Trustee and its counsel and any
representatives of the Corporation and its counsel.
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 $50
principal amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Securities held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Securityholders. Any
meeting of Securityholders duly called pursuant to the provisions of Section
8.02 or 8.03 may be adjourned from time to time by a majority of those present,
and the meeting may be held as so adjourned without further notice.
SECTION 8.06 Voting
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
45
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 8.02. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Corporation and
the other to the Debenture Trustee to be preserved by the Debenture Trustee, the
latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE IX
AMENDMENTS
SECTION 9.01 Without Consent of Securityholders
The Corporation, when authorized by a Board Resolution, and the
Debenture Trustee may from time to time and at any time amend the Indenture,
without the consent of the Securityholders, for one or more of the following
purposes:
(a) to evidence the succession of another Person to the
Corporation, or successive successions, and the assumption by the successor
Person of the covenants, agreements and obligations of the Corporation pursuant
to Article X hereof;
(b) to add to the covenants of the Corporation such further
covenants, restrictions or conditions for the protection of the Securityholders
as the Board of Directors and the Debenture Trustee shall consider to be for the
protection of the Securityholders, and to make the occurrence, or the occurrence
and continuance, of a default in any of such additional covenants, restrictions
or conditions a Default or an Event of Default permitting the enforcement of all
or any of the remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction or
condition such amendment may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Debenture Trustee upon such default;
(c) to provide for the issuance under this Indenture of
Securities in coupon form (including Securities registrable as to principal
only) and to provide for exchangeability of such Securities with the Securities
issued hereunder in fully registered form and to make all appropriate changes
for such purpose;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture;
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities;
46
(f) to make provision for transfer procedures, certification,
book-entry provisions 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 Preferred Securities in the event of a distribution of
Securities by the Trust following a Dissolution Event;
(g) to qualify or maintain qualification of this Indenture
under the Trust Indenture Act; or
(h) to ensure that the Trust is not required to register as an
investment company under the Investment Company Act of 1940; or
(i) to make any change that does not adversely affect the
rights of any Securityholder in any material respect;
provided that any such amendment does not materially adversely affect the
interests of Securityholders, it being understood that no amendment described in
clause (a) above made solely to conform this Indenture to the final offering
memorandum provided to investors in connection with the initial offering of the
Preferred Securities will be deemed to materially and adversely affect the
interests of Securityholders.
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, privileges or immunities under this
Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this
Section 9.01 may be executed by the Corporation and the Debenture Trustee
without the consent of the holders of any of the Securities at the time
outstanding, notwithstanding any of the provisions of Section 9.02.
SECTION 9.02 With Consent of Securityholders
With the consent (evidenced as provided in Section 7.01) of the holders
of a majority in aggregate principal amount of the Securities at the time
outstanding, the Corporation, when authorized by a Board Resolution, and the
Debenture Trustee may from time to time and at any time amend the 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
principal amount of, or any installment of principal of or Interest on the
Securities; (ii) reduce the rate or extend the time of payment of Interest;
(iii) change any of the provisions of Article XIV relating to redemption; (iv)
47
make the principal of, or Interest payment on, the Securities payable in any
coin or currency other than that provided herein; (v) change any obligation of
the Corporation to maintain an office or agency in the places and for the
purposes required by the Indenture or change the place of payment where the
Securities or any premium or Interest payment thereon is payable; (vi) impair or
affect the right of any holder of Securities to institute suit for the payment
of the Securities as provided herein; (vii) reduce the percentage of the
principal amount of the Securities required to consent to modify or amend the
Indenture or for any waiver of compliance with provisions of the Indenture as
stated herein or for waiver of Defaults as stated herein; (viii) make any change
adverse to a Holder with respect to the subordination provisions of Article XV;
or (ix) modify any of the foregoing provisions; provided, however, that if the
Securities are held by the Trust, no such modification or amendment referred to
in clauses (i) through (ix) shall be effective until the holders of not less
than a majority of the aggregate liquidation amount of the Trust Securities
shall have consented to such modification or amendment; and provided, further,
however, that where a consent under the Indenture would require the consent of
the Securityholders of more than a majority of the principal amount of the
Securities, such modification or amendment shall not be effective until the
holders of at least the same proportion in aggregate stated liquidation amount
of the Trust Securities shall have consented to such modification or amendment.
Upon the request of the Corporation accompanied by a copy of a
resolution of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture effecting such
amendment, and upon the filing with the Debenture Trustee of evidence of the
consent of Securityholders as aforesaid, the Debenture Trustee shall join with
the Corporation in the execution of such supplemental indenture unless such
supplemental indenture affects the Debenture Trustee's own rights, duties,
privileges 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, at the expense of the Corporation, shall
transmit by mail, first-class postage prepaid, a notice, prepared by the
Corporation, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Security Register. Any failure of the Debenture Trustee to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 9.03 Compliance with Trust Indenture Act; Effect of Supplemental
Indentures
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties,
privileges 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.
48
SECTION 9.04 Notation on Securities
Securities authenticated and delivered after the execution of any
supplemental indenture affecting such Securities 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 X
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 all or substantially all the property
of the Corporation, or its successor or successors as the case may be, 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) upon any such consolidation,
merger, sale, conveyance, transfer or lease, the due and punctual payment of the
principal of and Interest on the Securities according to their tenor and the due
and punctual performance and observance of all the covenants and conditions of
this Indenture to be kept or performed by the Corporation shall be expressly
assumed, by 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)
immediately after giving effect to such consolidation, merger, sale, conveyance,
transfer or lease, no Default or Event of Default shall exist.
49
SECTION 10.02 Successor Corporation to be Substituted for Corporation
In case of any such consolidation, merger, conveyance or transfer 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, on) 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 the party of the first
part, 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
Commerce 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 the officers 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 Indentures had been issued at the date of the execution
hereof.
SECTION 10.03 Opinion of Counsel to be Given to Debenture Trustee
The Debenture Trustee, subject to the provisions of Sections 6.01 and
6.02, may receive an Opinion of Counsel as conclusive evidence that any
consolidation, merger, sale, conveyance, transfer or lease, and any assumption,
permitted or required by the terms of this Article X complies with the
provisions of this Article X.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01 Discharge of Indenture
When (a) the Corporation shall deliver to the Debenture Trustee for
cancellation all Securities theretofore authenticated (other than any Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced as provided in Section 2.07) 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 redemption within
one year under arrangements satisfactory to the Debenture Trustee for the giving
of notice of redemption, and the Corporation shall deposit with the Debenture
Trustee, in trust, funds sufficient to pay on the Maturity Date or upon
redemption 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 2.07) not theretofore cancelled or delivered to the Debenture Trustee
50
for cancellation, including principal and Interest due or to become due to the
Maturity Date or redemption date, as the case may be, but excluding, however,
the amount of any moneys for the payment of principal of or Interest 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, 2.03, 2.04, 2.06, 2.07, 2.10,
2.11, 3.01, 3.02, 3.04, 4.01, 4.02, 5.02, 5.04, 6.05, 6.06, 6.10 and 11.04
hereof and Article XVII 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. Government
Obligations deposited pursuant to Section 11.05 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the holders of outstanding Securities.
SECTION 11.03 Paying Agent to Repay Moneys Held
Upon the satisfaction and discharge of this Indenture all moneys then
held by any paying agent of the Securities (other than the Debenture Trustee)
shall, upon written demand of the Corporation, be repaid to it or paid to the
Debenture Trustee, and thereupon such paying agent shall be released from all
further liability with respect to such moneys.
SECTION 11.04 Return of Unclaimed Moneys
Any moneys deposited with or paid to the Debenture Trustee or any
paying agent for payment of the principal of or Interest on Securities and not
applied but remaining unclaimed by the holders of Securities for two years after
the date upon which the principal of or Interest 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 on written demand; 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.
51
SECTION 11.05 Defeasance Upon Deposit of Moneys or U.S. Government
Obligations
The Corporation shall be deemed to have been Discharged (as defined
below) from its obligations with respect to the Securities on the 91st day after
the applicable conditions set forth below have been satisfied:
(a) the Corporation shall have deposited or caused to be
deposited irrevocably with the Debenture Trustee or the Defeasance Agent (as
defined below) as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the holders of the Securities (i) money
in an amount, or (ii) U.S. Government Obligations which 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;
(b) [intentionally omitted]
(c) no Default or Event of Default (including as a result of
such deposit) with respect to the Securities shall have occurred and be
continuing on the date of such deposit;
(d) such deposit and the related intended consequence will not
result in any default or event of default under any material indenture,
agreement or other instrument binding upon the Corporation or its Subsidiaries
or any of their properties; and
(e) the Corporation shall have delivered to the Debenture
Trustee and the Defeasance Agent, if any, an opinion of independent tax counsel
or a private letter ruling issued by the Internal Revenue Service to the effect
that holders of the Securities will not recognize income, gain or loss for
United States federal income tax purposes as a result of the exercise of the
option under this Section 11.05 and will be subject to United States federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such option had not been exercised.
"Discharged" means that the Corporation shall be deemed to have paid
and discharged the entire indebtedness represented by, and obligations under,
the Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Debenture Trustee, at the expense of the
Corporation, shall execute proper instruments acknowledging the same), except
(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 2.06,
2.07, 5.02, 5.04, 6.05 and 11.04 and Article XVII; and (C) the rights, powers,
trusts, duties, privileges and immunities of the Debenture Trustee hereunder.
52
"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:
(a) 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;
(b) 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 XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01 Indenture and Securities Solely Corporate Obligations
No recourse for the payment of the principal of or Interest 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, officer or director, as such, past, present or future, of the
Corporation or of any successor Person to the Corporation, either directly or
through the Corporation or any successor Person to the Corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Securities.
ARTICLE XIII
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.
53
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, direction, request or demand which by any provision of this
Indenture is required or permitted to be given or served on any party by the
other party or by the holders of Securities may be given or served by being
deposited postage prepaid by first class mail, registered or certified mail,
overnight courier service or telecopy (confirmed by one of the foregoing)
addressed (unless another address is provided by a party by written notice to
the other party), as follows:
If to the Corporation:
Commerce Bancorp, Inc.
Commerce Atrium, 0000 Xxxxx 00 Xxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Telecopy: 000-000-0000
Telephone: 000-000-0000
Attention: C. Xxxxxx Xxxxxx, Xx., Executive Vice President
If to the Debenture Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Telephone: 000-000-0000
Attention: Corporate Trust - Administration
Any notice or communication to a Securityholder shall be mailed by first-class
mail to his or her address shown on the register kept by the security registrar
for the Securities.
SECTION 13.05 Governing Law
This Indenture and each Security shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be governed
by and construed in accordance with the laws of said State.
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.
54
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 Interest on
the Securities will not be a Business Day, the payment of such principal of or
Interest on the Securities need not be made on such date but may be made on the
next succeeding Business Day, with the same force and effect as if made on the
date of payment and no Interest shall accrue for the period from and after such
date, 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.
SECTION 13.08 Trust Indenture Act to Control
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 318,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09 Table of Contents, Headings, etc.
The table of contents and the titles and headings of the
articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.10 Execution in Counterparts
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
55
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, the 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 Securities held by
the Trust, if the Property Trustee of the Trust fails to enforce its rights
under this Indenture as the holder of the Securities in respect of an Event of
Default after a holder of Preferred Securities has made a written request, such
holder of Preferred Securities may, to the extent permitted by applicable law,
institute a legal proceeding against the Corporation to enforce the Property
Trustee's rights under the Securities. In addition, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Corporation to pay principal of or Interest on the Securities when due (or in
connection with a redemption, failure to pay the Redemption Price on the
Redemption Date), the Corporation acknowledges that a holder of Preferred
Securities may commence a Direct Action against the Corporation to compel it to
make such payment to such holder of the principal of or Interest on the
Securities having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder on or after the respective due date
specified in the Securities. The Corporation may not amend the Indenture to
remove this right to bring a Direct Action without the prior written consent of
the holders of all of the Preferred Securities. Notwithstanding any payments
that the Corporation makes to a holder of Preferred Securities in connection
with a Direct Action, the Corporation shall remain obligated to pay the
principal of and Interest on the Securities, and the Corporation shall be
subrogated to the rights of the holder of the Preferred Securities, and have a
right of set-off, with respect to payments on the Preferred Securities to the
extent that the Corporation makes any payments to a holder of Preferred
Securities in any Direct Action.
ARTICLE XIV
REDEMPTION OF SECURITIES
SECTION 14.01 Special Event Redemption
If, 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 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 20 days nor more than 60 days written notice to
56
the Securityholders, to redeem the Securities, in whole (but not in part), at
the Redemption Price. The Redemption Price shall be paid prior to 12:00 noon,
New York, New York time, on the date of such redemption or such earlier time as
the Corporation determines, provided that the Corporation shall deposit with the
Debenture Trustee an amount sufficient to pay the Redemption Price by 10:00
a.m., New York time, on the date such Redemption Price is to be paid.
SECTION 14.02 Optional Redemption by Corporation
(a) Subject to the provisions of this Article XIV, the
Corporation shall have the right to redeem the Securities, in whole or in part,
on one or more occasions (i) at any time on or after March 11, 2005 if the
Closing Price of the Common Stock for 20 Trading Days in a period of 30
consecutive Trading Days ending on the Trading Day prior to the mailing of the
notice of redemption exceeds 120% of the then prevailing Conversion Price, or
(ii) at any time on or after March 11, 2012, in any case, upon not less than 20
days and not more than 60 days' notice, at the Redemption Price.
If the Securities are only partially redeemed pursuant to this Section
14.02, the Securities to be redeemed shall be selected on a pro rata basis not
more than 60 days prior to the date fixed for redemption from the outstanding
Securities not previously called for redemption, provided, however, that with
respect to Securityholders that would be required to hold Securities with an
aggregate principal amount of less than $5,000 but more than an aggregate
principal amount of zero as a result of such pro rata redemption, the
Corporation shall redeem Securities of each such Securityholder so that after
such redemption such Securityholder shall hold Securities either with an
aggregate principal amount of at least $5,000 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 $50 or integral multiples thereof shall be
redeemed. The Redemption Price shall be paid prior to 12:00 noon, New York, New
York time, on the date of such redemption 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 Redemption Price by 10:00
a.m., New York, New York time, on the date such Redemption Price is to be paid.
[(b) Intentionally Omitted]
(c) Any redemption of Securities pursuant to Section 14.01 or
Section 14.02 shall be subject to the Corporation obtaining the prior approval
of its primary federal banking regulator, if required by applicable law or
regulation, and any other required regulatory approvals.
SECTION 14.03 No Sinking Fund
The Securities are not entitled to the benefit of any sinking fund.
57
SECTION 14.04 Notice of Redemption; Selection of Securities
In case the Corporation shall desire to exercise the right to redeem
all, or, as the case may be, any part of the Securities in accordance with their
terms, it shall fix a date for redemption and shall mail a notice of such
redemption at least 20 and not more than 60 days prior to the date fixed for
redemption to the holders of Securities to be so redeemed as a whole or in part
at their last addresses as the same appear on the Security Register. For
purposes of the calculation of the date of redemption and the dates on which
notices are given pursuant to this Section 14.04, a redemption notice shall be
deemed to be given on the day such notice is first mailed by first-class mail,
postage prepaid, to holders. 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 redemption
as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
Each such notice of redemption shall specify the CUSIP number of the
Securities to be redeemed, the date fixed for redemption, the Redemption Price
at which the Securities are to be redeemed (or the method by which such
Redemption 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 redemption will be paid as specified in
said notice, that on and after said date Interest thereon or on the portions
thereof to be redeemed will cease to accrue, the then-current Conversion Price,
the name and address of the Paying Agent and the Conversion Agent, that the
Securities called for redemption may be converted at any time before 5:00 p.m.
New York City time on the Business Day immediately preceding the redemption date
and that Securityholders who wish to convert Securities must satisfy the
requirements in the Indenture and the Securities. If less than all the
Securities are to be redeemed, the notice of redemption shall specify the
numbers of the Securities to be redeemed. In case any Security is to be redeemed
in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date fixed
for redemption, upon surrender of such Security, a new Security or Securities in
principal amount equal to the portion thereof that has not been redeemed will be
issued.
By 10:00 a.m. New York time on the redemption date specified in the
notice of redemption 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 redeem on the redemption date all the Securities so
called for redemption at the appropriate Redemption Price.
The Corporation will give the Debenture Trustee notice not less than 45
days prior to the redemption date as to the aggregate principal amount of
Securities to be redeemed and the Debenture Trustee shall select, in such manner
as in its sole discretion it shall deem appropriate and fair, the Securities or
portions thereof (in integral multiples of $50, except as otherwise set forth in
the applicable form of Security) to be redeemed.
SECTION 14.05 Payment of Securities Called for Redemption
If notice of redemption has been given to Securityholders 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 Redemption Price (subject to the
58
rights of holders of Securities at the close of business on a regular record
date to receive Interest in respect of an Interest Payment Date occurring on or
prior to the Remption Date), and on and after said date (unless the Corporation
shall default in the payment of such Securities at the Redemption Price)
Interest on the Securities or portions of Securities so called for redemption
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 redeemed by the Corporation at the Redemption
Price (subject to the rights of holders of Securities on the close of business
on a regular record date to receive Interest in respect of an Interest Payment
Date occurring on or prior to the Redemption Date).
Upon presentation of any Security redeemed 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 redeemed.
SECTION 14.06 Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Corporation may
arrange for the purchase and conversion of any Securities by an agreement with
one or more investment bankers or other purchasers to purchase such Securities
by paying to the Trustee in trust for the Holders, on or before the Redemption
Date, an amount not less than the applicable Redemption Price of such
Securities. Notwithstanding anything to the contrary contained in this Article
XIV, the obligation of the Corporation to pay the Redemption Price of such
Securities shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers. If such an agreement is entered into, a
copy of which shall be filed with the Trustee prior to the Redemption Date, any
Securities not duly surrendered for conversion by the Holders thereof, may, at
the option of the Corporation, be deemed, to the fullest extent permitted by
law, acquired by such purchasers from such Holders and (notwithstanding anything
to the contrary contained in Article XVII) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the
Redemption Date (and the right to convert any such Securities shall be deemed to
have been extended through such time), subject to payment of the above amount as
aforesaid. At the written direction of the Corporation, the Debenture Trustee
shall hold and dispose of any such amount paid to it in the same manner as it
would monies deposited with it by the Corporation for the redemption of
Securities. Without the Debenture Trustee's prior written consent, no
arrangement between the Corporation and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Debenture Trustee as set
forth in this Indenture, and the Corporation agrees to indemnify the Debenture
Trustee from, and hold it harmless against, any and all loss, liability or
expense arising out of or in connection with any such arrangement for the
purchase and conversion of any Securities between the Corporation and such
purchasers, including the costs and expenses incurred by the Debenture Trustee
in the defense of any claim or liability arising out of or in connection with
the exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture. Nothing in the preceding sentence shall be
deemed to limit the rights, privileges, immunities and protections afforded to
the Debenture Trustee in Article VI. Nothing in this Section 14.06 shall affect
the right of the Holders to receive the full Redemption Price on the Redemption
Date.
59
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01 Agreement to Subordinate
The Corporation covenants and agrees, and each holder of Securities
issued hereunder likewise covenants and agrees, that the Securities shall be
issued subject to the provisions of this Article XV; and each holder of a
Security, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
The payment by the Corporation of the principal of and Interest 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, 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 an Event of Default, or if any
judicial proceeding shall be pending with respect to any such Default, then, in
any such case, no payment shall be made by the Corporation with respect to the
principal (including redemption payments) of or Interest on the Securities or
any other amounts which may be due on the Securities pursuant to the terms
hereof or otherwise.
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 redemption payments) or Interest on the Securities or any other
amounts which may be due on the Securities pursuant to the terms hereof or
otherwise 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
Indebtedness, and only the amounts specified in such notice to the Debenture
Trustee shall be paid to the holders of such Senior Indebtedness.
60
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 the Corporation's liquidation, dissolution, winding up,
reorganization, assignment for the benefit of its creditors, marshaling of its
assets or any bankruptcy, insolvency, debt restructuring or similar proceedings
in connection with any insolvency or bankruptcy proceeding involving the
Corporation, all Senior Indebtedness of the Corporation shall first be paid in
full, or payment thereof provided for in money in accordance with its terms,
before any payment is made by the Corporation on account of the principal of or
Interest on the Securities or any other amounts which may be due on the
Securities pursuant to the terms hereof or otherwise; and upon any such event,
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 money's
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
61
at the time be outstanding, provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of such Senior Indebtedness
are not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Corporation with, or the merger of the
Corporation into, another Person or the liquidation or dissolution of the
Corporation following the sale, conveyance, transfer or lease of its property as
an entirety, or substantially as an entirety, to another Person upon the terms
and conditions provided for in Article X of this Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 15.03 if such other Person shall, as a part of such consolidation,
merger, sale, conveyance, transfer or lease, comply with the conditions stated
in Article X of this Indenture. Nothing in Section 15.02 or in this Section
15.03 shall apply to claims of, or payments to, the Debenture Trustee under or
pursuant to Section 6.06 of this Indenture.
SECTION 15.04 Subrogation
Subject to the payment in full of all Senior Indebtedness, the rights
of the Securityholders shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Corporation, as the case may be, applicable to such Senior
Indebtedness until the principal of and Interest on the Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or distributions
to the holders of such Senior Indebtedness of any cash, property or securities
to which the Securityholders or the Debenture Trustee would be entitled except
for the provisions of this Article XV, and no payment over pursuant to the
provisions of this Article XV to or for the benefit of the holders of such
Senior Indebtedness by Securityholders or the Debenture Trustee, shall, as
between the Corporation, its creditors other than holders of Senior Indebtedness
of the Corporation, and the holders of the Securities, be deemed to be a payment
by the Corporation to or on account of such Senior Indebtedness. It is
understood that the provisions of this Article XV are and are intended solely
for the purposes of defining the relative rights of the holders of the
Securities, on the one hand, and the holders of such Senior Indebtedness on the
other hand.
Nothing contained in this Article XV or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Corporation,
its creditors other than the holders of Senior Indebtedness of the Corporation,
and the holders of the Securities, the obligation of the Corporation, which is
absolute and unconditional, to pay to the holders of the Securities the
principal of and Interest 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.
62
Upon any payment or distribution of assets of the Corporation referred
to in this Article XV, the Debenture Trustee, subject to the provisions of
Article VI of this Indenture, and the Securityholders shall be entitled to
conclusively rely upon any order or decree 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
indebtedness 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 may be necessary or appropriate 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.
Notwithstanding the provisions of this Article XV or any other provision of this
Indenture, the Debenture Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment of monies
to or by the Debenture Trustee in respect of the Securities pursuant to the
provisions of this Article XV, unless and until a Responsible Officer of the
Debenture Trustee shall have received written notice thereof from the
Corporation or a holder or holders of Senior Indebtedness or from any trustee
therefor; and before the receipt of any such written notice, the Debenture
Trustee, subject to the provisions of Article VI of this Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Debenture Trustee shall not have received the notice provided for in
this Section 15.06 at least three Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of or Interest on any
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 three
Business Days prior to such date.
The Debenture Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on a written notice delivered
to it by a Person representing himself to be a holder of Senior Indebtedness of
the Corporation (or a trustee on behalf of such holder), as the case may be, to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Debenture Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XV, the Debenture Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Debenture Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article XV, and, if such
evidence is not furnished, the Debenture Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
63
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 conclusively rely upon any order or decree entered by any court of
competent jurisdiction in which such insolvency, bankruptcy, receivership,
liquidation, reorganization, dissolution, winding-up or similar case or
proceeding is pending, or a certificate of the trustee in bankruptcy,
liquidating trustee, custodian, receiver, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered to the
Debenture Trustee or to the Securityholders, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other indebtedness of the 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.
64
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 XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01 Extension of Interest Payment Period
So long as the Corporation is not in Default in the payment of Interest
on the Securities, the Corporation shall have the right, at any time and from
time to time during the term of the Securities, to defer payments of Interest by
extending the interest payment period of such Securities for a period not
exceeding 20 consecutive quarterly periods, including the first such quarterly
period during such extension period (an "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 or, with
respect to any Securities called for redemption, the Redemption Date with
respect to such Securities. 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 quarterly for each quarterly period of 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, Liquidated Damages 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 first record date 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 period, provided that such period, together with all such
previous and further extensions within such Extended Interest Payment Period,
shall not exceed 20 consecutive quarterly periods, including the first such
quarterly period during such Extended Interest Payment Period, end on a date
other than an Interest Payment Date or extend beyond the Maturity Date of the
Securities or, with respect to any Securities called for redemption, the
Redemption Date with respect to such Securities. Upon the termination of any
Extended Interest Payment Period and the payment of all Deferred Interest 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.
65
SECTION 16.02 Notice of Extension
(a) If the Property Trustee is the only registered holder of
the Securities at the time the Corporation selects an Extended Interest Payment
Period or extends an Extended Interest Payment Period, the Corporation shall
give written notice to the Administrative Trustees, the Property Trustee and the
Debenture Trustee of its selection of such Extended Interest Payment Period or
its extension of an Extended Interest Payment Period at least five Business Days
before the earlier of (i) the next date on which Distributions on the Preferred
Securities are payable, or (ii) the date the Property Trustee is required to
give notice of the record date or the payment date of such related Distributions
for the first quarter of such Extended Interest Payment Period to any national
stock exchange or other organization on which the Preferred Securities are
listed or quoted, if any, or to holders of the Preferred Securities as of the
record date or the payment date.
(b) If the Property Trustee is not the only holder of the
Securities at the time the Corporation selects an Extended Interest Payment
Period or extends 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 or its extension of an
Extended Interest Payment Period at least 10 Business Days before the earlier of
(i) the Interest Payment Date for the first quarter of such Extended Interest
Payment Period, or (ii) the date the Corporation is required to give notice of
the record date or payment date of such related Interest payment for the first
quarter of such Extended Interest Payment Period to any national stock exchange
or other organization on which the Securities are listed or quoted, if any, or
to Holders of the Securities as of the record date or the payment date.
(c) The quarterly period in which any notice is given pursuant
to paragraphs (a) or (b) of this Section 16.02 shall be counted as one of the 20
quarterly periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.
ARTICLE XVII
CONVERSION OF SECURITIES
SECTION 17.01 Conversion Rights.
(a) Subject to and upon compliance with the provisions of this
Article XVII, the Securities are convertible, at the option of the
Securityholder, at any time on and after the occurrence of any of the events
described in paragraph (b) below, and before 5:00 pm, New York, New York time,
on the Business Day immediately preceding the date of repayment of such
Securities, whether at stated maturity or upon redemption, into fully paid and
nonassessable shares of Common Stock at an initial conversion ratio of 0.9478
shares of Common Stock for each $50 in aggregate principal amount of Securities
(equal to an initial conversion price of $52.7537 per share of Common Stock),
subject to adjustment as described in this Article XVII (the "Conversion
66
Ratio"). A Securityholder may convert any portion of the principal amount of the
Securities into that number of fully paid and nonassessable shares of Common
Stock calculated as to each conversion to the nearest 1/100th of a share)
obtained by multiplying (x) the quotient obtained by dividing the principal
amount of the Securities to be converted by $50 by (y) the Conversion Ratio. In
case a Security or portion thereof is called for redemption, such conversion
right in respect of the Security or portion so called shall expire at 5:00 p.m.,
New York, New York time on the Business Day immediately preceding the
corresponding redemption date, unless the Corporation defaults in making the
payment due upon redemption.
(b) A holder's right to convert its Securities will arise only
upon the occurrence of any of the following:
(i) If, as of the last day of any calendar quarter
beginning with the quarter ending June 30, 2002, the
Closing Price of the Common Stock for at least 20 Trading
Days in a period of 30 consecutive Trading Days ending on
the last Trading Day of such quarter is more than 110% of
the Conversion Price in effect on the last day of such
quarter, then on and after the first day of the following
quarter, Holders may surrender their Securities for
conversion into shares of the Corporation's Common Stock
at any time at their option until 5:00 p.m., New York, New
York time, on the Business Day immediately preceding the
stated Maturity Date or earlier Redemption Date. If the
Securities become convertible pursuant to this provision,
they will remain convertible regardless of future changes
in the Closing Prices of the Common Stock.
(ii) Holders may also surrender Securities for conversion
at any time when the credit rating assigned to the
Preferred Securities or the Securities (in the event that
the Securities have been distributed to the holders of the
Preferred Securities) by Xxxxx'x Investors Service, Inc.
or its successors ("Xxxxx'x") is at or below Ba1 (or its
equivalent under any successor ratings categories of
Moody's).
(iii) Holders may surrender for conversion Securities that
have been called for redemption at any time prior to 5:00
p.m., New York, New York time, on the Business Day
immediately preceding the date of redemption, even if such
Security is not otherwise convertible at that time.
(iv) In the event that the Corporation becomes a party to
transactions described in Section 17.04 (each, a "business
consolidation transaction"), then the holders of
outstanding Securities will have the right to surrender
their Securities for conversion at any time from and after
the date which is 15 days prior to the anticipated
effective date of such business consolidation transaction.
At and after the effective date of such business
consolidation transaction, each Security shall be
convertible into the kind and amount of securities, cash
or other property described in Section 17.04. The
Corporation shall not become a party to any such
transaction unless its terms are consistent with this
clause (iv).
67
(v) Holders of outstanding Securities shall have the right
to surrender their Securities for conversion upon a change
of control of the Corporation. A "change in control" of
the Corporation will be deemed to have occurred at such
time as a report is filed on Schedule 13D or TO (or any
successor schedule, form or report) pursuant to the
Exchange Act, disclosing that any person (for the purposes
of this clause (v) only, as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act)
or any such person's Affiliates or Associates (as defined
in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date hereof) have
become the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any successor rule
or regulation promulgated under the Exchange Act) of 50%
or more of the voting power of the Corporation's Common
Stock then outstanding (including instruments with voting
rights substantially similar to the Corporation's Common
Stock); provided, however, that a person shall not be
deemed beneficial owner of, or to own beneficially, (A)
any securities tendered pursuant to a tender or exchange
offer made by or on behalf of such person or any of such
person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange
thereunder, or (B) any securities if such beneficial
ownership (1) arises solely as a result of a revocable
proxy delivered in response to a proxy or consent
solicitation made pursuant to the applicable rules and
regulations under the Exchange Act, and (2) is not also
then reportable on Schedule 13D (or any successor
schedule) under the Exchange Act. Notwithstanding the
foregoing provisions of this clause (v), a Change in
Control shall not be deemed to have occurred by virtue of
the Corporation, any Subsidiary, any employee stock
ownership plan or any other employee benefit plan of the
Corporation or any Subsidiary, or any person holding the
Corporation's Common Stock for or pursuant to the terms of
any such employee benefit plan, filing or becoming
obligated to file a report under or in response to
Schedule 13D or Schedule TO (or any successor schedule,
form or report) under the Exchange Act disclosing
beneficial ownership by it of shares of the Corporation's
Common Stock, whether in excess of 50% or otherwise.
Upon a determination that Holders are or will be entitled to convert their
Securities into Common Stock in accordance with this Article XVII, the
Corporation shall issue a press release and publish such determination on the
Corporation's web site.
SECTION 17.02 Conversion Procedures.
(a) To convert all or a portion of the Securities, the
Securityholder thereof shall deliver to the Conversion Agent an irrevocable
Conversion Request setting forth the principal amount of Securities to be
converted, together with the name or names, if other than the Securityholder, in
which the shares of Common Stock should be issued upon conversion and, if such
Securities are in certificate form, surrender to the Conversion Agent the
Securities to be converted, duly endorsed or assigned to the Corporation or in
68
blank. In addition, a holder of Preferred Securities may exercise its right
under the Trust Agreement to exchange such Preferred Securities for Securities
which shall be converted into Common Stock by delivering to the Conversion Agent
an irrevocable Conversion Request setting forth the information called for by
the preceding sentence and directing the Conversion Agent (i) to exchange such
Preferred Security for a portion of the Securities held by the Trust (at an
exchange rate of $50 principal amount of Securities for each Preferred
Security), and (ii) to immediately convert such Securities, on behalf of such
Securityholder, into Common Stock pursuant to this Article XVII and, if such
Preferred Securities are in certificate form, surrendering such Preferred
Securities, duly endorsed or assigned to the Corporation or in blank. So long as
any Preferred Securities are outstanding, the Trust shall not convert any
Securities into shares of Common Stock except pursuant to a Conversion Request
delivered to the Conversion Agent by a holder of Preferred Securities.
Except as described in this paragraph, no distribution will be payable
on Securities surrendered for conversion with respect to any Interest Payment
Date subsequent to the date of conversion and neither the Trust nor the
Corporation shall make, or be required to make, any payment, allowance or
adjustment for accumulated and unpaid Interest, whether or not in arrears, on
Securities surrendered for conversion. If any Securities are surrendered for
conversion between the period from 5:00 p.m., New York, New York time, on any
record date through and including the related Interest Payment Date, the
Securities surrendered for conversion must be accompanied by payment from the
Securityholder in next day funds of an amount equal to the Interest payment
which the registered holder on such record date is to receive, and such
Securityholder shall be entitled to receive the Interest payable on the
subsequent Interest Payment Date on the portion of Securities to be converted,
notwithstanding the conversion thereof prior to such Interest Payment Date. The
previous sentence shall not apply in the case of Securities called for
redemption on a Redemption Date between a record date and a related Interest
Payment Date and in the case of any Securities surrendered for conversion after
such Securities have been called for redemption during an Extended Interest
Payment Period as described in the next sentence. If notice of redemption of
Securities is mailed or otherwise given to Securityholders, then, if any
Securityholder converts any Securities into Common Stock on any date on or after
the date on which such notice of redemption is mailed or otherwise given, and if
such date of conversion falls on any day from and including the first day of an
Extended Interest Payment Period and on or prior to the Interest Payment Date
upon which such Extended Interest Payment Period ends, such converting
Securityholder shall be entitled to receive either (i) if the date of such
conversion falls after a record date and on or prior to the next succeeding
Interest Payment Date, all accrued and unpaid Interest on such Securities to
such Interest Payment Date, or (ii) if the date of such conversion does not fall
on a date described in clause (i) above, all accrued and unpaid Interest on such
Securities to the most recent Interest Payment Date prior to the date of such
conversion (even though no Interest was paid on such date), which Interest
shall, in either such case, be paid to such converting Securityholder unless
another Securityholder was the record owner of such Securities as of 5:00 p.m.,
New York, New York time on the record date for which such Interest payment is
made, in which case such Interest payment shall be paid to such other
Securityholder. Except as otherwise set forth above in this paragraph, in the
case of any Security which is converted, Interest which is payable after the
date of conversion of such Security shall not be payable, and the Corporation
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid Interest on the Securities being
converted, which shall be deemed to be paid in full. If any Security called for
redemption is converted, any money deposited with the Trustee or with any paying
agent or so segregated and held in trust for the redemption of such Security
shall (subject to any right of the Securityholder) be paid to the Corporation
upon Corporation Request or, if then held by the Corporation, shall be
discharged from such trust.
69
Each conversion shall be deemed to have been effected immediately prior
to 5:00 p.m., New York, New York time, on the Business Day on which the
Conversion Request and any other required deliveries were received (the
"Conversion Date") by the Conversion Agent from the Securityholder or from a
holder of the Preferred Securities effecting a conversion thereof pursuant to
its conversion rights under the Trust Agreement, as the case may be. The person
or persons entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as a record holder or holders of such Common
Stock as of the Conversion Date. As promptly as practicable on or after the
Conversion Date, the Corporation shall issue and deliver at the office of the
Conversion Agent, unless otherwise directed by the Securityholder in the
Conversion Request, a certificate or certificates for the number of full shares
of Common Stock issuable upon such conversion, together with the cash payment,
if any, in lieu of any fraction of any share to the Person or Persons entitled
to receive the same. The Conversion Agent shall deliver such certificate or
certificates to each person or persons.
(b) Subject to any right of the Securityholder, the
Corporation's delivery upon conversion of the fixed number of shares of Common
Stock into which the Securities are convertible (together with the cash payment,
if any, in lieu of fractional shares) shall be deemed to satisfy the
Corporation's obligation to pay the principal amount at maturity of the portion
of Securities so converted and any unpaid Interest accrued on such Securities at
the time of such conversion.
(c) No fractional shares of Common Stock shall be issued as a
result of conversion, but in lieu thereof, the Corporation shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the date on which the
Securities or Preferred Securities, as the case may be, were duly surrendered to
the Conversion Agent for conversion, or, if such day is not a Trading Day, on
the next Trading Day, and the Conversion Agent in turn shall make such payment,
if any, to the Securityholder or the holder of the Preferred Securities so
converted.
(d) In the event of the conversion of any Security in part
only, a new Security or Securities for the unconverted portion thereof shall be
issued in the name of the Securityholder thereof upon the cancellation thereof
in accordance with Section 2.9.
(e) In effecting the conversion transactions described in this
Section 17.2, the Conversion Agent is acting as agent of the holders of
Preferred Securities (in the exchange of Preferred Securities for Securities)
and as agent of the Securityholders (in the conversion of Securities into Common
Stock), as the case may be, directing it to effect such conversion transactions.
The Conversion Agent is hereby authorized (i) to exchange Preferred Securities
for Securities held by the Trust from time to time in connection with the
conversion of such Preferred Securities in accordance with this Article XVII,
and (ii) to convert all or a portion of the Securities into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article XVII and to deliver to the Trust a new Security or
Securities for any resulting unconverted principal amount.
70
(f) Any certificates representing shares of Common Stock
issuable upon conversion of the Securities shall bear any legend required by
Section 2.6.
(g) The Corporation shall at all times reserve and keep
available out of its authorized and unissued Common Stock, solely for issuance
upon the conversion of the Securities, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the Securities then outstanding.
Notwithstanding the foregoing, the Corporation shall be entitled to deliver upon
conversion of Securities, shares of Common Stock reacquired and held in the
treasury of the Corporation (in lieu of the issuance of authorized and unissued
shares of Common Stock), so long as any such treasury shares are free and clear
of all liens, charges, security interests or encumbrances. Any shares of Common
Stock issued upon conversion of the Securities shall be duly authorized, validly
issued and fully paid and nonassessable. The Debenture Trustee shall deliver the
shares of Common Stock received upon conversion of the Securities to the
converting Securityholder free and clear of all liens, charges, security
interests and encumbrances, except for United States withholding taxes.
SECTION 17.03 Conversion Ratio Adjustments.
The Conversion Ratio shall be subject to adjustment (without
duplication) from time to time as follows:
(a) In case the Corporation shall, while any of the Securities
are outstanding, (i) pay a dividend or make a distribution with respect to its
Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares, or (iv) issue by recapitalization or reclassification
of its shares of Common Stock any shares of capital stock of the Corporation,
then the Conversion Ratio in effect immediately prior to such action shall be
adjusted so that the holders of any Securities thereafter surrendered for
conversion shall be entitled to receive the number of shares of capital stock of
the Corporation which such Securityholder would have owned immediately following
such action had such Securities been converted immediately prior thereto. An
adjustment made pursuant to this section 17.03(a) shall become effective
immediately after the record date in the case of a dividend or other
distribution and shall become effective immediately after the effective date in
case of a subdivision, combination, recapitalization or reclassification (or
immediately after the record date if a record date shall have been established
for such event); provided however, that in the event that such dividend or
distribution is not so paid or made, or such subdivision, combination,
recapitalization or reclassification is not effected, the Conversion Ratio shall
again be adjusted to be the Conversion Ratio which would then be in effect but
for such proposed transaction. If, as a result of an adjustment made pursuant to
this Section 17.03(a), the holder of any Security thereafter surrendered for
conversion shall become entitled to receive shares of two or more classes or
series of capital stock of the Corporation, the Board of Directors (whose
determination shall be conclusive and shall be described in a Board Resolution
filed with the Trustee) shall determine the allocation of the adjusted
Conversion Ratio between or among shares of such classes or series of capital
stock.
71
(b) In case the Corporation shall, while any of the Securities
are outstanding, issue rights or warrants to all holders of its Common Stock
entitling them to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price per share less than (or
having a conversion price per share less than) the Current Market Price (as
defined below) per share of Common Stock on such record date, then the
Conversion Ratio for the Securities shall be adjusted so that the same shall
equal the ratio determined by multiplying the Conversion Ratio in effect
immediately prior to the date of issuance of such rights or warrants by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase (or
into which the convertible securities so offered by such rights or warrants are
convertible), and of which the denominator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights or warrants plus
the number of shares which the aggregate offering price of the total number of
shares so offered for subscription or purchase (or the aggregate conversion
price of the convertible securities offered by such rights or warrants) would
purchase at such Current Market Price. Such adjustment shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such rights or warrants. For the purposes of this Section 17.03(b),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation. The Corporation shall not issue
any rights or warrants in respect of the shares of Common Stock held in the
treasury of the Corporation. In case any rights or warrants referred to in this
Section 17.03(b) in respect of which an adjustment shall have been made shall
expire unexercised after the same shall have been distributed or issued by the
Corporation, the Conversion Ratio shall be readjusted at the time of such
expiration to the Conversion Ratio that would have been in effect if no
adjustment had been made in respect of such unexercised rights or warrants. If
the Corporation shall at any time issue two or more securities as a unit and one
or more of such securities shall be rights or warrants for Common Stock subject
to this Section 17.03(b), the consideration allocated to each such security
shall be determined in good faith by the Board of Directors whose determination
shall be conclusive and described in an Officers' Certificate filed with the
Trustee.
(c) Subject to the last sentence of this Section 17.03(c), in
case the Corporation shall, by dividend or otherwise, distribute to all holders
of its Common Stock evidences of its indebtedness, shares of any class or series
of its capital stock, cash or assets (including securities and shares of the
Corporation's Subsidiaries, but excluding any dividend or distribution referred
to in Section 17.03(a), any rights or warrants referred to in Section 17.03(b),
dividends and distributions in connection with a transaction described in
Section 17.04 and any dividend or distribution paid exclusively in cash) then
the Conversion Ratio shall be increased so that the same shall equal the ratio
determined by multiplying the Conversion Ratio in effect immediately prior to
the effectiveness of the Conversion Ratio increase contemplated by this Section
17.03(c) by a fraction of which the numerator shall be the Current Market Price
per share of Common Stock on the date fixed for the payment of such distribution
(the "Reference Date"), and of which the denominator shall be, the Current
Market Price per share of the Common Stock on the Reference Date less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), on the
72
Reference Date, of the portion of the evidences of indebtedness, shares of
capital stock, cash and assets so distributed applicable to one share of Common
Stock, such increase to become effective immediately prior to the opening of
business on the day following the Reference Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Ratio shall
again be adjusted to be the Conversion Ratio which would then be in effect if
such dividend or distribution had not occurred. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 17.03(c) by reference to the actual or when issued trading market for
any securities comprising such distribution, it must in doing so consider the
prices in such market over the same period used in computing the Current Market
Price per share of Common Stock. In the event that the Corporation pays a
dividend or makes a distribution on shares of its Common Stock consisting of
capital stock of, or similar equity interests in, a Subsidiary or other business
unit, the fair market value of the securities to be distributed and the Closing
Prices of Common Stock shall in each case be based upon the average of the
Closing Prices of those securities and the Common Stock, as the case may be, for
the ten consecutive Trading Days commencing on and including the fifth Trading
Day after the date on which "ex-dividend trading" commences for such dividend or
distribution on the principal United States securities exchange or market on
which the securities are then listed or quoted. For purposes of this Section
17.03(c), any dividend or distribution that includes shares of Common Stock or
rights or warrants to subscribe for or purchase shares of Common Stock shall be
deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, shares of capital stock, cash or assets other than such shares of
Common Stock or such rights or warrants (making any Conversion Ratio increase
required by this Section 17.03(c)) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights or warrants (making
any further Conversion Ratio increase required by Section 17.03(a) or 17.03
(b)), except (A) the Reference Date of such dividend or distribution as defined
in this Section 17.03(c) shall be substituted as (a) "the record date in the
case of a dividend or other distribution," and (b) "the record date for the
determination of shareholders entitled to receive such rights or warrants," and
(c) "the date fixed for such determination" within the meaning of Sections
17.03(a) and 17.03(b), and (B) any shares of Common Stock included in such
dividend or distribution shall not be deemed outstanding for purposes of
computing any adjustment of the Conversion Ratio in Section 17.03(a).
(d) In case the Corporation shall pay dividends or other
distributions consisting exclusively of cash to all holders of its Common Stock
to the extent that such distributions, combined together with: (A) the aggregate
amount of any other such all cash distributions to all holders of Common Stock
made exclusively in cash within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant to this
Section has been made, and (B) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution) of consideration payable in
respect of any tender offer by the Corporation or any of its subsidiaries for
all or any portion of the Common Stock concluded within the 12 months preceding
the date of such distribution, and in respect of which no adjustment pursuant to
this Section 17.03 has been made, exceeds 10% of the product of the Current
Market Price (determined as provided in paragraph (f) below) on the record date
with respect to such distribution times the number of shares of Common Stock
outstanding on such date, then and in each such case, immediately after the
close of business on such date, the Conversion Ratio shall be increased so that
73
the same shall equal the amount determined by multiplying the Conversion Ratio
in effect immediately prior to the close of business on such record date by a
fraction: (i) the numerator of which shall be equal to the Current Market Price
on such record date, and (ii) the denominator of which shall be equal to the
Current Market Price on such record date less an amount equal to the quotient of
(x) the excess of such combined amount over such 10% and (y) the number of
shares of Common Stock outstanding on such record date. Such adjustment shall
become effective immediately prior to the opening of business on the day
following the record date for the determination of stockholders entitled to
receive such distribution.
(e) In case the Corporation purchases shares of its Common
Stock pursuant to a tender offer made by the Corporation or any of its
Subsidiaries to the extent that the same involves an aggregate consideration
that, together with (A) any cash and the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and set forth in a
Board Resolution) of any other consideration paid in any other tender offer by
the Corporation or any of its Subsidiaries for Common Stock expiring within the
12 months preceding such tender offer for which no adjustment has been pursuant
to this Section plus (B) the aggregate amount of any all-cash distributions
referred to in paragraph (d) above to all holders of Common Stock within 12
months preceding the expiration of tender offer for which no adjustments have
been made pursuant to this Section 17.03, exceeds 10% of the product of the
Current Market Price (determined as provided in paragraph (f) below) as of the
last time (the "Tender Expiration Time") tenders could have been made pursuant
to such tender offer (as it may be amended) times the number of shares of Common
Stock outstanding (including any tendered shares) on the Tender Expiration Time,
then, and in each such case, immediately prior to the opening of business on the
day after the date of the Tender Expiration Time, the Conversion Ratio shall be
adjusted so that the same shall equal the amount determined by multiplying the
Conversion Ratio in effect immediately prior to close of business on the date of
the Tender Expiration Time by a fraction: (i) the numerator of which shall be
the sum of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly tendered and
not withdrawn as of the Tender Expiration Time (the shares deemed so accepted,
up to any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Tender Expiration Time and the Current Market Price of the Common
Stock on the Trading Day next succeeding the Tender Expiration Time, and (B) the
denominator shall be the number of shares of Common Stock outstanding (including
any tendered shares) at the Tender Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the Tender
Expiration Time. Such increase (if any) shall become effective immediately prior
to the opening of business on the day following the Tender Expiration Time. In
the event that the Corporation is obligated to purchase shares pursuant to any
such tender offer, but the Corporation is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded, the
Conversion Ratio shall again be adjusted to be the Conversion Ratio which would
then be in effect if such tender offer had not been made. If the application of
this paragraph (e) to any tender offer would result in a decrease in the
Conversion Ratio, no adjustment shall be made for such tender offer under this
paragraph (e).
74
(f) For the purpose of any computation under Sections 4.3(b),
(c), (d) or (e), the "Current Market Price" per share of Common Stock on any
date in question shall be deemed to be the average of the daily Closing Prices
for the ten consecutive Trading Days selected by the Corporation commencing not
more than 20 Trading Days before, and ending not later than the earlier of the
day in question or, if applicable, the day before the "ex" date with respect to
the issuance or distribution requiring such computation; provided, however, that
if another event occurs that would require an adjustment pursuant to Sections
17.3(a) through (e), inclusive, the Board of Directors may make such adjustments
to the Closing Prices during such ten Trading Day period as it deems appropriate
to effectuate the intent of the adjustments in this Section 17.3, in which case
any such determination by the Board of Directors shall be set forth in a Board
Resolution and shall be conclusive; and provided, further, however that the
selection of Trading Days under the circumstances described in the fourth
sentence of paragraph (c) shall be as set forth in such sentence. For purposes
of this Section 17.3(f), the term "ex" date, (i) when used with respect to any
issuance or distribution, means the first date on which the Common Stock trades
in a regular way on The New York Stock Exchange or on such successor securities
exchange or securities quotation system as the Common Stock may be listed or in
the relevant market from which the Closing Prices were obtained without the
right to receive such issuance or distribution, and (ii) when used with respect
to any tender offer, means the first date on which the Common Stock trades in a
regular way on such securities exchange or in such market after the Tender
Expiration Time.
(g) The Corporation may make such increases in the Conversion
Ratio, in addition to those required by Sections (a) through (e), as it
considers to be advisable to avoid or diminish any income tax to holders of
Common Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. The Corporation from time to time may increase the
Conversion Ratio by any amount for any period of time if the period is at least
20 days upon notice by the Corporation of at least 15 days, the increase is
irrevocable during the period, and the Board of Directors shall have made a
determination that such increase would be in the best interest of the
Corporation, which determination shall be conclusive. Whenever the Conversion
Ratio is increased pursuant to the preceding sentence, the Corporation shall
mail to Securityholders of record a notice of the increase at least fifteen days
prior to the date the increased Conversion Ratio takes effect, and such notice
shall state the increased Conversion Ratio and the period it shall be in effect.
(h) Anything in this Section 17.03 to the contrary
notwithstanding, no adjustment of the Conversion Ratio will be made upon: (a)
the issuance of any shares of Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in shares of Common Stock under any such plan, or (b) the issuance of any shares
of Common Stock or options or rights pursuant to any present or future employee
benefit plan or program, or (c) the issuance of any shares of Common Stock
pursuant to any option, warrant, right or any exercisable, exchangeable or
convertible security outstanding as of the date on which the Securities are
first issued, or (d) the issuance of rights under any shareholder rights plan,
or (e) a change in the par value or a change to no par value of the Common
Stock. To the extent the Securities become convertible into cash, no adjustments
need be made thereafter as to the cash and interest will not accrue on the cash.
75
(i) No adjustment in the Conversion Ratio shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Conversion Ratio; provided, however, that any adjustments which by reason of
this Section 17.03(i) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required. The adjusted Conversion Ratio will be rounded to four decimal places.
(j) If any action would require adjustment of the Conversion
Ratio pursuant to more than one of the provisions described above, only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value to the Securityholders.
SECTION 17.04 Share Exchange, Consolidation, Merger or Sale of Assets.
In the event that the Corporation shall be a party to any transaction,
including without limitation (a) any compulsory share exchange, (b) any
consolidation of the Corporation with, or merger of the Corporation into any
other Person, any merger of another Person into the Corporation (other than a
merger which does not result in a reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Corporation), or (c)
any sale, transfer or lease of all or substantially all of the assets of the
Corporation, in each case pursuant to which the Common Stock is converted into
the right to receive other securities, cash or other property, then lawful
provision shall be made as part of the terms of such transaction whereby the
holder of each Security then outstanding shall have the right thereafter to
convert each Security only into the kind and amount of securities, cash or other
property receivable upon consummation of such transaction by a holder of the
number of shares of Common Stock of the Corporation into which such Security
could have been converted immediately prior to such transaction. The Corporation
or the Person formed by such consolidation or resulting from such merger or
which acquired such assets or which acquires the shares of the Corporation, as
the case may be, shall make provision in its certificate or articles of
incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constitution document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article XVII. The above provisions shall similarly apply to
successive transactions of the foregoing type.
SECTION 17.05 Notice of Adjustments of Conversion Ratio.
Whenever the Conversion Ratio is adjusted as herein provided:
(a) The Corporation shall compute the adjusted Conversion
Ratio and shall prepare an Officers' Certificate setting forth the adjusted
Conversion Ratio and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed with the
Trustee, the Conversion Agent and the transfer agent for the Preferred
Securities and the Securities; and
76
(b) A notice stating that the Conversion Ratio has been
adjusted and setting forth the adjusted Conversion Ratio shall as soon as
practicable be mailed by the Corporation to all record holders of Preferred
Securities and the Securities at their last addresses as they appear upon the
stock transfer books of the Corporation and the Trust.
SECTION 17.06 Prior Notice of Certain Events.
In case:
(a) the Corporation shall (i) declare any dividend (or any
other distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock, or (B) a dividend payable in cash that would not require
an adjustment pursuant to Section 17.3(c) or (d), or (ii) authorize a tender
offer that would require an adjustment pursuant to Section 17.3(e);
(b) the Corporation shall authorize the granting to all
holders of Common Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or warrants;
(c) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value), or
of any consolidation or merger to which the Corporation is a party and for which
approval of any shareholders of the Corporation shall be required, or the sale
or transfer of all or substantially all of the assets of the Corporation or of
any compulsory share exchange whereby the Common Stock is converted into other
securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation;
then the Corporation shall (1) if any Preferred Securities are outstanding,
cause to be filed with the Property Trustee and the transfer agent for the
Preferred Securities, and shall cause to be mailed to the holders of record of
the Preferred Securities, at their last addresses as they shall appear upon the
securities register of the Trust, or (2) shall cause to be mailed to all
Securityholders at their last addresses as they shall appear in the Security
Register, at least fifteen days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record (if any)
is to be taken for the purpose of such dividend, distribution, rights or
warrants or, if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribution, rights or
warrants are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up (but no failure to mail such
notice or any defect therein or in the mailing thereof shall affect the validity
of the corporate action required to be specified in such notice).
77
SECTION 17.07 Debenture Trustee Not Responsible For Determining Conversion
Ratio Or Adjustments.
Neither the Debenture Trustee nor any Conversion Agent shall at any
time be under any duty or responsibility to any Securityholder to determine
whether any facts exist which may require any adjustment of the Conversion
Ratio, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Debenture
Trustee nor any Conversion Agent shall be accountable with respect to the
validity or value (or the kind of account) of any shares of Common Stock or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Security; and neither the Debenture Trustee nor any
Conversion Agent makes any representation with respect thereto. Neither the
Debenture Trustee nor any Conversion Agent shall be responsible for any failure
of the Corporation to make any cash payment or to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property
upon the surrender of any Security for the purpose of conversion, or, except as
expressly herein provided, to comply with any of the covenants of the
Corporation contained in Article III or this Article XVII.
[balance of page intentionally blank]
78
The Bank of New York hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
Commerce Bancorp, Inc.
By /s/ Xxxxxx X. Xxxx, XX
-------------------------------
Name: Xxxxxx X. Xxxx, XX
Title: Chairman and President
The Bank of New York,
as Debenture Trustee
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
79
EXHIBIT A
---------
(FORM OF FACE OF SECURITY)
[Include the following legend on all Securities, including Global Securities,
unless otherwise determined by the Corporation in accordance with applicable
law.]
THIS SECURITY AND THE UNDERLYING SHARES OF COMMERCE BANCORP, INC. COMMON STOCK
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE
SHARES OF UNDERLYING COMMERCE BANCORP, INC. COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN
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 SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE"), WHICH
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH COMMERCE BANCORP, INC. OR ANY AFFILIATE OF COMMERCE BANCORP, INC. WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO
COMMERCE BANCORP, INC. OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO COMMERCE BANCORP, INC.'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER UPON THE EARLIER OF THE TRANSFER OF THE SECURITIES EVIDENCED
HEREBY PURSUANT TO CLAUSE (C) ABOVE AND THE RESALE RESTRICTION TERMINATION DATE.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE (C) ABOVE) A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
A-1
BY ITS ACQUISITION OF THIS CERTIFICATE THE HOLDER REPRESENTS THAT EITHER (I) IT
IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER SIMILAR RETIREMENT PLAN OR ARRANGEMENT,
WHETHER OR NOT SUBJECT TO 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") (OR ANY SIMILAR LAWS OR REGULATIONS) OR AN ENTITY WHOSE
UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE THE ASSETS OF ANY SUCH PLANS AND
ARRANGEMENTS (EACH, A "PLAN") AND NO PART OF THE ASSETS TO BE USED BY THE HOLDER
TO ACQUIRE AND/OR HOLD THIS CERTIFICATE OR ANY INTEREST THEREIN CONSTITUTES PLAN
ASSETS OF ANY PLAN OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE WILL
NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR
SECTION 4975 OF THE CODE OR A VIOLATION UNDER ANY OTHER APPLICABLE LAWS AND
REGULATIONS THAT ARE SIMILAR TO THE PROVISIONS OF TITLE I OF ERISA OR SECTION
4975 OF THE CODE.
A-2
Principal Amount: $206,185,600.00
No. 1 CUSIP No.: 200519 AC 0
Commerce Bancorp, Inc.
5.95% JUNIOR SUBORDINATED CONVERTIBLE DEBENTURE
DUE MARCH 11, 2032
Commerce Bancorp, Inc., a New Jersey corporation (the
"Corporation", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to The Bank
of New York as Property Trustee for Commerce Capital Trust II or registered
assigns, the principal sum of Two Hundred Six Million, One Hundred Eighty Five
Thousand and Six Hundred Dollars ($206,185,600.00) on March 11, 2032 (the
"Maturity Date"), unless previously redeemed, and to pay interest on the
outstanding principal amount hereof from March 11, 2002, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on June 15, September 15, December 15 and March 15
of each year, commencing June 15, 2002, at the rate of 5.95% per annum until the
principal hereof shall have become due and payable, and on any overdue principal
and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of Interest at the
same rate per annum compounded quarterly. The amount of Interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months and, for any period shorter that a full quarterly period will be
computed on the basis of a 30-day month, and for any period less than a full
calendar month, the number of days elapsed in such month. In the event that any
date on which the principal of or Interest on this Security is payable is not a
Business Day, 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), except that if such next succeeding Business Day
falls in the next 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. Pursuant to the Indenture, in certain circumstances the
Corporation will be required to pay Additional Sums, Liquidated Damages and
Compounded Interest (each 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 as of 5:00 p.m., New York City time, on the first day of the month,
whether or not a Business Day, in which the relevant Interest Payment Date
occurs (or would have occurred but for fact that the Interest Payment Date was
not a Business Day). 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 shall 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
The principal of and Interest 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) by 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, the payment of the
principal of and Interest on this Security will be made at such place and to
such account as may be designated by the 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 hereinafter referred to, 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.
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 March
11, 2002 (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.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
A-4
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.
IN WITNESS WHEREOF, the Corporation has caused this instrument
to be duly executed and sealed this 11th day of March, 2002.
COMMERCE BANCORP, INC.
By: ____________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the
within-mentioned Indenture.
The Bank of New York,
not in its individual capacity but solely as
Debenture Trustee
By____________________
Authorized Signatory
A-5
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Corporation
(herein sometimes referred to as the "Securities"), specified in the Indenture,
all issued or to be issued under and pursuant to an Indenture, dated as of March
11, 2002 (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.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
1. Redemption. Upon the occurrence and continuation of a
Special Event, the Corporation shall have the right, at any time following the
occurrence of such Special Event, to redeem this Security in whole (but not in
part) at the Redemption Price.
In addition, the Corporation shall have the right to redeem
this Security, in whole or in part, on one or more occasions (i) at any time on
or after March 11, 2005 if the Closing Price of the Corporation's Common Stock
for 20 Trading Days in a period of 30 consecutive Trading Days ending on the
Trading Day prior to the mailing of the notice of redemption exceeds 120% of the
then prevailing Conversion Price, or (ii) at any time on or after March 11,
2012, in any case, upon not less than 20 days and not more than 60 days' notice,
at the Redemption Price.
The Redemption Price shall be paid prior to 12:00 noon, New
York, New York time, on the date of such redemption 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 Redemption Price by 10:00
a.m. New York, New York time on the date such Redemption Price is to be paid.
Any redemption pursuant to this paragraph will be made upon not less than 20
days nor more than 60 days notice. If the Securities are only partially redeemed
by the Corporation pursuant to an optional redemption described in the preceding
paragraph, the particular Securities to be redeemed shall be selected on a pro
rata basis not more than 60 days prior to the date fixed for redemption from the
outstanding Securities not previously called for redemption, provided, however,
that with respect to Securityholders that would be required to hold Securities
with an aggregate principal amount of less than $5,000 but more than an
aggregate principal amount of zero as a result of such pro rata redemption, the
Corporation shall redeem Securities of each such Securityholder so that after
such redemption such Securityholder shall hold Securities either with an
aggregate principal amount of at least $5,000 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 $50 or integral multiples thereof shall
be redeemed.
A-6
In the event of redemption of this Security in part only, a
new Security or Securities for the portion hereof that has not been redeemed
will be issued in the name of the holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any redemption of Securities by
the Corporation shall be subject to the Corporation obtaining the prior approval
of the Corporation's primary federal regulator, if required by applicable law or
regulation, and the receipt of any other required regulatory approvals.
2. Conversion. (a) Subject to and upon compliance with the
provisions of Article XVII of the Indenture, the Securities are convertible, at
the option of the Securityholder, at any time on and after the occurrence of any
of the events described in paragraph (b) below, and before 5:00 pm, New York,
New York time, on the Business Day immediately preceding the date of repayment
of such Securities, whether at stated maturity or upon redemption, into fully
paid and nonassessable shares of Common Stock at an initial conversion ratio of
0.9478 shares of Common Stock for each $50 in aggregate principal amount of
Securities (equal to an initial conversion price of $52.7537 per share of Common
Stock), subject to adjustment as described in the Indenture. A Securityholder
may convert any portion of the principal amount of the Securities into that
number of fully paid and nonassessable shares of Common Stock calculated as to
each conversion to the nearest 1/100th of a share) obtained by multiplying (x)
the quotient obtained by dividing the principal amount of the Securities to be
converted by $50 by (y) the Conversion Ratio. In case a Security or portion
thereof is called for redemption, such conversion right in respect of the
Security or portion so called shall expire at 5:00 p.m., New York, New York time
on the Business Day immediately preceding the corresponding redemption date,
unless the Corporation defaults in making the payment due upon redemption.
(b) A Holder's right to convert its Securities will arise only
upon the occurrence of any of the following:
(i) If, as of the last day of any calendar quarter
beginning with the quarter ending June 30, 2002, the Closing Price of the
Corporation's Common Stock for at least 20 Trading Days in a period of 30
consecutive Trading Days ending on the last Trading Day of such quarter is more
than 110% of the Conversion Price in effect on the last day of such quarter,
then on and after the first day of the following quarter, Holders may surrender
their Securities for conversion into shares of the Corporation's Common Stock at
any time at their option until 5:00 p.m., New York, New York time, on the
Business Day immediately preceding the stated Maturity Date or earlier
Redemption Date. If the Securities become convertible pursuant to this
provision, they will remain convertible regardless of future changes in the
Closing Prices of the Corporation's Common Stock.
(ii) Holders may also surrender a Security for
conversion at any time when the credit rating assigned to the Preferred
Securities or the Securities (in the event that the Securities have been
distributed to the holders of the Preferred Securities) by Xxxxx'x Investors
Service, Inc. or its successors ("Xxxxx'x") is at or below Ba1 (or its
equivalent under any successor ratings categories of Moody's).
(iii) Holders may surrender for conversion a Security
that has been called for redemption at any time prior to 5:00 p.m., New York,
New York time, on the Business Day immediately preceding the date of redemption,
even if such Security is not otherwise convertible at that time.
A-7
(iv) In the event that the Corporation becomes a
party to transactions described in Section 17.04 of the Indenture (each, a
"business consolidation transaction"), then the holders of outstanding
Securities will have the right to surrender their Securities for conversion at
any time from and after the date which is 15 days prior to the anticipated
effective date of such business consolidation transaction. At and after the
effective date of such business consolidation transaction, each Security shall
be convertible into the kind and amount of securities, cash or other property
receivable upon the consummation of such business consolidation transaction by a
holder of the number of shares of the Corporation's Common Stock issuable upon
conversion of such Security immediately prior to such business consolidation
transaction.
(v) Holders of outstanding Securities shall have the
right to surrender their Securities for conversion upon a "change of control" of
the Corporation as defined in the Indenture.
(c) To convert all or a portion of the Securities, the
Securityholder thereof shall deliver to the Conversion Agent an irrevocable
Conversion Request setting forth the principal amount of Securities to be
converted, together with the name or names, if other than the Securityholder, in
which the shares of Common Stock should be issued upon conversion and, if such
Securities are in certificate form, surrender to the Conversion Agent the
Securities to be converted, duly endorsed or assigned to the Corporation or in
blank. In addition, a holder of Preferred Securities may exercise its right
under the Trust Agreement to exchange such Preferred Securities for Securities
which shall be converted into Common Stock by delivering to the Conversion Agent
an irrevocable Conversion Request setting forth the information called for by
the preceding sentence and directing the Conversion Agent (i) to exchange such
Preferred Security for a portion of the Securities held by the Trust (at an
exchange rate of $50 principal amount of Securities for each Preferred
Security), and (ii) to immediately convert such Securities, on behalf of such
Securityholder, into Common Stock pursuant to Article XVII of the Indenture and,
if such Preferred Securities are in certificate form, surrendering such
Preferred Securities, duly endorsed or assigned to the Corporation or in blank.
(d) Except as described in this paragraph, no distribution
will be payable on Securities surrendered for conversion with respect to any
Interest Payment Date subsequent to the date of conversion and neither the Trust
nor the Corporation shall make, or be required to make, any payment, allowance
or adjustment for accumulated and unpaid Interest, whether or not in arrears, on
Securities surrendered for conversion. If any Securities are surrendered for
conversion between the period from 5:00 p.m., New York, New York time, on any
record date through and including the related Interest Payment Date, the
Securities surrendered for conversion must be accompanied by payment in next day
funds of an amount equal to the Interest payment which the registered holder on
such record date is to receive, and such Securityholder shall be entitled to
receive the Interest payable on the subsequent Interest Payment Date on the
portion of Securities to be converted, notwithstanding the conversion thereof
prior to such Interest Payment Date. The previous sentence shall not apply in
the case of Securities called for redemption on a redemption date between a
record date and a related Interest Payment Date and in the case of any
A-8
Securities surrendered for conversion after such Securities have been called for
redemption during an Extended Interest Payment Period, in which event Interest
with respect to such Securities shall be payable to the extent provided in the
Indenture. Except as otherwise set forth above in this paragraph, in the case of
any Security which is converted, Interest which is payable after the date of
conversion of such Security shall not be payable, and the Corporation shall not
make nor be required to make any other payment, adjustment or allowance with
respect to accrued but unpaid Interest on the Securities being converted, which
shall be deemed to be paid in full.
(e) No fractional shares of Common Stock shall be issued as a
result of conversion, but in lieu thereof, the Corporation shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the date on which the
Securities or Preferred Securities, as the case may be, were duly surrendered to
the Conversion Agent for conversion, or, if such day is not a Trading Day, on
the next Trading Day, and the Conversion Agent in turn shall make such payment,
if any, to the Securityholder or the holder of the Preferred Securities so
converted
(3) Acceleration. 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.
(4) Modification and Waiver. 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, thereby (i) change the
Maturity Date of any Security, or reduce the principal amount of, or any
installment of principal of or Interest on the Securities; (ii) reduce the rate
or extend the time of payment of Interest; (iii) change any of the provisions of
Article XIV of the Indenture relating to redemption; (iv) make the principal of,
or Interest payment on, the Securities payable in any coin or currency other
than that provided in the Indenture; (v) change any obligation of the
Corporation to maintain an office or agency in the places and for the purposes
required by the Indenture or change the place of payment where the Securities or
any premium or Interest payment thereon is payable; (vi) impair or affect the
right of any holder of Securities to institute suit for the payment of the
Securities as provided in the Indenture; (vii) reduce the percentage of the
principal amount of the Securities required to consent to modify or amend the
Indenture or for any waiver of compliance with provisions of the Indenture as
stated in the Indenture or for waiver of Defaults as stated in the Indenture;
(viii) make any change adverse to a Holder with respect to the subordination
provisions of Article XV of the Indenture; or (ix) modify any of the foregoing
provisions; provided, however, that if the Securities are held by the Trust, no
such modification or amendment referred to in clauses (i) through (ix) shall be
A-9
effective until the holders of not less than a majority of the aggregate
liquidation amount of the Trust Securities shall have consented to such
modification or amendment; and provided, further, that where a consent under the
Indenture would require the consent of the Securityholders of more than a
majority of the principal amount of the Securities, such modification or
amendment shall not be effective until the holders of at least the same
proportion in aggregate stated liquidation amount of the Trust Securities shall
have consented to such modification or amendment. The Indenture also contains
provisions permitting the holders of a majority in aggregate principal amount of
the Securities at the time outstanding, on behalf of all of the holders of the
Securities, prior to any declaration accelerating the maturity of the
Securities, to waive any past Default or Event of Default 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.
(5) No Impairment. No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter or impair the
obligation of the Corporation, which is absolute and unconditional, to pay the
principal of and Interest on this Security at the time and place and at the rate
and in the money herein prescribed.
(6) Extension of Interest Payment Period. So long as the
Corporation is not in Default in the payment of Interest on the Securities, the
Corporation shall have the right, at any time and from time to time during the
term of the Securities, to defer payments of Interest by extending the interest
payment period of such Securities for a period not exceeding 20 consecutive
quarterly periods, including the first such quarterly period during such
extension period (an "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 or, with respect to any
Securities called for redemption, the Redemption Date with respect to such
Securities. At the end of any Extended Interest Payment 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 20 consecutive quarterly periods, including the first
quarterly period during such Extended Interest Payment Period, (ii) shall not
end on any date other than an Interest Payment Date, and (iii) shall not extend
beyond the Maturity Date of the Securities or, with respect to any Securities
called for redemption, the Redemption Date with respect to such 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.
A-10
(7) 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, interest or premium, if any, 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 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 shareholder's 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 Trust Securities Guarantee, (d) 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 shares resulting from a reclassification of the Corporation's capital
stock, (f) 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 (g) 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), if at such time (1) an event has
occurred with the giving of notice or the lapse of time, or both, would
constitute an Event of Default and the Corporation has not taken reasonable
steps to cure the event, (2) the Corporation shall be in default with respect to
its payment obligations under the Trust Securities Guarantee or (3) the
Corporation shall have given notice of its election of the exercise of its right
to extend the interest payment period pursuant to Section 16.01 and any such
extension shall be continuing.
(8) Liquidation of Trust. Subject to the receipt of any
required regulatory approval, the Corporation will have the right at any time to
liquidate the Trust and cause the Securities to be distributed to the holders of
the Trust Securities in liquidation of the Trust.
(9) Denominations, Transfer and Exchange. The Securities are
issuable only in registered form without coupons in minimum denominations of $50
and any integral multiple 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 attorney duly authorized in writing, and thereupon one or
more new Securities of authorized denominations and for the same aggregate
principal amount and series 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.
[Global Note Insert:
A-11
The aggregate principal amount of the Securities in global
form (the term global form shall also refer to the aggregate principal amount of
the Securities held by the Property Trustee on behalf of the Trust) represented
hereby may from time to time be reduced to reflect conversions or redemptions of
a part of this Security in global form or cancellations of a part of this
Security in global form, in each case, and in any such case, by means of
notations on the Global Security Transfer Schedule on the last page hereof.
Notwithstanding any provision of this Security to the contrary, conversions or
redemptions of a part of this Security in global form and cancellations of a
part of this Security in global form, may be effected without the surrendering
of this Security in global form, provided that appropriate notations on the
Schedule of Exchanges, Conversions, Redemptions, Cancellations and Transfers are
made by the Trustee, or the Depositary (or the Property Trustee) at the
direction of the Trustee, to reflect the appropriate reduction or increase, as
the case may be, in the aggregate principal amount of this Security in a global
form resulting therefrom or as a consequence thereof.]
(10) Persons Deemed Owners. 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
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 registrar shall be affected by any notice to the
contrary.
(11) No Recourse Against Others. No recourse shall be had for
the payment of the principal of or premium, if any, or Interest 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,
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.
(12) Indenture; Trust Indenture Act of 1940. The terms of this
Security include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb), as amended by the Trust Indenture Reform Act of 1990, as in
effect on the date hereof or, from and after the date that the Indenture shall
be qualified thereunder, as in effect on such date. This Security is subject to
all such terms, and the holder of this Security is referred to the Indenture and
said Act for a statement of them. In the case of any conflict between the
provisions of this Security and the Indenture, the provisions of the Indenture
shall control. The Corporation will furnish to any Holder, upon written request
and without charge, a copy of the Indenture. Requests may be made to: Commerce
Bancorp, Inc., Commerce Atrium, 0000 Xxxxx 00 Xxxx, Xxxxxx Xxxx, Xxx Xxxxxx
00000-0000, Attention: C. Xxxxxx Xxxxxx, Xx.
A-12
(13) Abbreviations and Definitions. Customary abbreviations
may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants
in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian) and
U/G/M/A (= Uniform Gifts to Minors Act). All terms used in this Security that
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
(14) Governing Law. THE INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
A-13
CONVERSION REQUEST
To: Commerce Bancorp, Inc.
The undersigned owner of these Securities hereby irrevocably exercises the
option to convert these Securities, or the portion below designated, into Common
Stock (as such term is defined in the Indenture, dated March 11, 2002, between
Commerce Bancorp, Inc. and The Bank of New York, as Debenture Trustee (the
"Indenture") in accordance with the terms of the Indenture).
The undersigned does also hereby direct that the shares issuable and deliverable
upon conversion, together with any check in payment for fractional shares, be
issued in the name of and delivered to the undersigned, unless a different name
has been indicated in the assignment below. If shares are to be issued in the
name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with the
terms of the Indenture and the Securities, agrees to be bound by the terms of
the Registration Rights Agreement relating to the Common Stock issuable upon
conversion of the Securities and agrees to appoint the Conversion Agent for the
purpose of effecting the conversion of the Securities into shares of Common
Stock.
Date: ______________ Principal Amount of Securities to be converted: _________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons.
_____________________________
_____________________________
_____________________________
(Sign exactly as your name appears on the other side of this certificate) (for
conversion of definitive Securities only)
Please print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number.
_____________________________
_____________________________
_____________________________
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-14
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers $_________ principal
amount of this Security to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints________________________________________________________
________________________________________________________________________________
_______________________________ agent to transfer this Security 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 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-15
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF RESTRICTED SECURITIES
This certificate relates to $_____________ principal amount of Securities held
in (check applicable space) ____ book-entry or ____ definitive form by the
undersigned.
(A) The undersigned has requested the Trustee by written order to
exchange or register the transfer of Securities.
(B) The undersigned confirms that such Securities are being (check
one box below):
(1) [ ] transferred to Commerce Bancorp, Inc. or a Subsidiary
thereof; or
(2) [ ] transferred pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
(3) [ ] transferred pursuant to an available exemption from
the registration requirements of the Securities Act
of 1933; or
(4) [ ] transferred pursuant to an effective registration
statement under the Securities Act.
Unless the box below is checked, the undersigned confirms that
such Securities are not being transferred to an "affiliate" of
the Commerce Bancorp, Inc. as defined in Rule 144 under the
Securities Act of 1933, as amended (an "Affiliate"):
(5) [ ] The transferee is an Affiliate of Commerce Bancorp,
Inc.
Unless one of the boxes in (B) above is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if box
(2) or (3) is checked, the Trustee may require, prior to registering any such
transfer of the Securities such legal opinions, certifications and other
information as the Trustee 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.
_____________________________
Signature
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-16
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing these Securities
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Trust as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: Signature:
-------------------- -------------------------------
Print name:
Print title:
A-17
Schedule A to Exhibit A
Global Note Transfer Schedule
Changes to Principal Amount of Global Security
===================================================================================================================
Authorized Signature
Principal Amount of Securities by Remaining Principal Amount of this of officer of Trustee
which this Global Security Is to Global Security or Depositary or
Date Be Reduced and Reason for Reduction (following decrease) Property Trustee
--------------- ------------------------------------ -------------------------------------- -----------------------
--------------- ------------------------------------ -------------------------------------- -----------------------
--------------- ------------------------------------ -------------------------------------- -----------------------
--------------- ------------------------------------ -------------------------------------- -----------------------
--------------- ------------------------------------ -------------------------------------- -----------------------
--------------- ------------------------------------ -------------------------------------- -----------------------
--------------- ------------------------------------ -------------------------------------- -----------------------
--------------- ------------------------------------ -------------------------------------- -----------------------
===================================================================================================================
Schedule to be maintained by Trustee, or Depositary or Property Trustee
in cooperation with Trustee, as applicable.
A-18
