Exhibit 10.13
===========================================================================
JUNIOR SUBORDINATED INDENTURE
between
MYSTIC FINANCIAL, INC.
and
THE BANK OF NEW YORK,
as Trustee
Dated as of February 14, 2003
===========================================================================
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Other Provisions of General Application
Section 1.1. Definitions 1
Section 1.2. Compliance Certificate and Opinions 10
Section 1.3. Forms of Documents Delivered to Trustee 10
Section 1.4. Acts of Holders 11
Section 1.5. Notices, Etc. to Trustee and Company 13
Section 1.6. Notice to Holders; Waiver 13
Section 1.7. Effect of Headings and Table of Contents 14
Section 1.8. Successors and Assigns 14
Section 1.9. Separability Clause 14
Section 1.10. Benefits of Indenture 14
Section 1.11. Governing Law 14
Section 1.12. Submission to Jurisdiction 14
Section 1.13. Non-Business Days 15
ARTICLE II
Security Forms
Section 2.1. Form of Security 15
Section 2.2. Restricted Legend 20
Section 2.3. Form of Trustee's Certificate of Authentication 22
Section 2.4. Temporary Securities 23
Section 2.5. Definitive Securities 23
ARTICLE III
The Securities
Section 3.1. Payment of Principal and Interest 23
Section 3.2. Denominations 25
Section 3.3. Execution, Authentication, Delivery and Dating 25
Section 3.4. Global Securities 26
Section 3.5. Registration, Transfer and Exchange Generally 28
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities 29
Section 3.7. Persons Deemed Owners 30
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TABLE OF CONTENTS
(continued)
Page
Section 3.8. Cancellation 30
Section 3.9. Deferrals of Interest Payment Dates 30
Section 3.10. Right of Set-Off 31
Section 3.11. Agreed Tax Treatment 31
Section 3.12. CUSIP Numbers 32
ARTICLE IV
Satisfaction and Discharge
Section 4.1. Satisfaction and Discharge of Indenture 32
Section 4.2. Application of Trust Money 33
ARTICLE V
Remedies
Section 5.1. Events of Default 33
Section 5.2. Acceleration of Maturity; Rescission and Annulment 34
Section 5.3. Collection of Indebtedness and Suits for Enforcement
by Trustee 35
Section 5.4. Trustee May File Proofs of Claim 36
Section 5.5. Trustee May Enforce Claim Without Possession
of Securities 36
Section 5.6. Application of Money Collected 37
Section 5.7. Limitation on Suits 37
Section 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of
Preferred Securities 38
Section 5.9. Restoration of Rights and Remedies 38
Section 5.10. Rights and Remedies Cumulative 38
Section 5.11. Delay or Omission Not Waiver 38
Section 5.12. Control by Holders 39
Section 5.13. Waiver of Past Defaults 39
Section 5.14. Undertaking for Costs 39
Section 5.15. Waiver of Usury, Stay or Extension Laws 40
ARTICLE VI
The Trustee
Section 6.1. Corporate Trustee Required 40
Section 6.2. Certain Duties and Responsibilities 40
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TABLE OF CONTENTS
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Page
Section 6.3. Notice of Defaults 41
Section 6.4. Certain Rights of Trustee 42
Section 6.5. May Hold Securities 44
Section 6.6. Compensation; Reimbursement; Indemnity 44
Section 6.7. Resignation and Removal; Appointment of Successor 45
Section 6.8. Acceptance of Appointment by Successor 45
Section 6.9. Merger, Conversion, Consolidation or Succession
to Business 46
Section 6.10. Not Responsible for Recitals or Issuance of Securities 46
Section 6.11. Appointment of Authenticating Agent 46
ARTICLE VII
Holder's Lists and Reports by Trustee And Company
Section 7.1. Company to Furnish Trustee Names and Addresses of
Holders 48
Section 7.2. Preservation of Information, Communications to Holders 48
Section 7.3. Reports by Company 49
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms 49
Section 8.2. Successor Company Substituted 50
ARTICLE IX
Supplemental Indentures
Section 9.1. Supplemental Indentures without Consent of Holders 50
Section 9.2. Supplemental Indentures with Consent of Holders 51
Section 9.3. Execution of Supplemental Indentures 52
Section 9.4. Effect of Supplemental Indentures 52
Section 9.5. Reference in Securities to Supplemental Indentures 52
ARTICLE X
Covenants
Section 10.1. Payment of Principal, Premium and Interest 52
Section 10.2. Money for Security Payments to be Held in Trust 53
Section 10.3. Statement as to Compliance 54
Section 10.4. Calculation Agent 54
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TABLE OF CONTENTS
(continued)
Page
Section 10.5. Additional Tax Sums 55
Section 10.6. Additional Covenants 55
Section 10.7. Waiver of Covenants 56
Section 10.8. Treatment of Securities 56
ARTICLE XI
Redemption of Securities
Section 11.1. Optional Redemption 56
Section 11.2. Special Event Redemption 57
Section 11.3. Election to Redeem; Notice to Trustee 57
Section 11.4. Selection of Securities to be Redeemed 57
Section 11.5. Notice of Redemption 58
Section 11.6. Deposit of Redemption Price 58
Section 11.7. Payment of Securities Called for Redemption 59
ARTICLE XII
Subordination of Securities
Section 12.1. Securities Subordinate to Senior Debt 59
Section 12.2. No Payment When Senior Debt in Default; Payment
Over of Proceeds Upon Dissolution, Etc. 59
Section 12.3. Payment Permitted If No Default 61
Section 12.4. Subrogation to Rights of Holders of Senior Debt 61
Section 12.5. Provisions Solely to Define Relative Rights 61
Section 12.6. Trustee to Effectuate Subordination 62
Section 12.7. No Waiver of Subordination Provisions 62
Section 12.8. Notice to Trustee 62
Section 12.9. Reliance on Judicial Order or Certificate of
Liquidating Agent 63
Section 12.10. Trustee Not Fiduciary for Holders of Senior Debt 63
Section 12.11. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights 63
Section 12.12. Article Applicable to Paying Agents 64
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TABLE OF CONTENTS
Page
SCHEDULES
Schedule A - Determination of LIBOR
Exhibit A - Form of Officer's Certificate
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Junior Subordinated Indenture, dated as of February 14, 2003, between
Mystic Financial Inc., a Delaware corporation (the "Company"), and The
Bank of New York, a New York banking corporation, as Trustee (in such
capacity, the "Trustee").
Recitals of the Company
Whereas, the Company has duly authorized the execution and delivery
of this Indenture to provide for the issuance of its unsecured junior
subordinated deferrable interest notes (the "Securities") issued to
evidence loans made to the Company of the proceeds from the issuance by
Mystic Financial Capital Trust II, a Delaware statutory trust (the
"Trust"), of undivided preferred beneficial interests in the assets of the
Trust (the "Preferred Securities") and undivided common beneficial
interests in the assets of the Trust (the "Common Securities" and,
collectively with the Preferred Securities, the "Trust Securities"), and to
provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered; and
Whereas, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
Now, therefore, this Indenture Witnesseth:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities,
as follows:
ARTICLE I
Definitions and Other Provisions of General Application
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article I have the meanings
assigned to them in this Article I;
(b) the words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation";
(c) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with GAAP;
(d) unless the context otherwise requires, any reference to
an "Article" or a "Section" refers to an Article or a Section, as the
case may be, of this Indenture;
(e) the words "hereby", "herein", "hereof" and "hereunder"
and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision;
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(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Administrative Trustee" means, with respect to the Trust, a Person
identified as an "Administrative Trustee" in the Trust Agreement, solely in
its capacity as Administrative Trustee of the Trust under the Trust
Agreement and not in its individual capacity, or its successor in interest
in such capacity, or any successor Administrative Trustee appointed as
therein provided.
"Additional Interest" means the interest, if any, that shall accrue
on any amounts payable on the Securities, the payment of which has not
been made on the applicable Interest Payment Date and which shall accrue at
the rate per annum specified or determined as specified in such Security.
"Additional Tax Sums" has the meaning specified in Section 10.5.
"Additional Taxes" means taxes, duties or other governmental charges
imposed on the Trust as a result of a Tax Event (which, for the sake of
clarity, does not include amounts required to be deducted or withheld by
the Trust from payments made by the Trust to or for the benefit of the
Holder of, or any Person that acquires a beneficial interest in, the
Securities).
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person,
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Applicable Depository Procedures" means, with respect to any
transfer or transaction involving a Global Security or beneficial interest
therein, the rules and procedures of the Depositary for such Security, in
each case to the extent applicable to such transaction and as in effect
from time to time.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.11 to act on behalf of the Trustee to authenticate
the Securities.
"Bankruptcy Code" means Title 11 of the United States Code or any
successor statute thereto, in each case as amended from time to time.
"Board of Directors" means the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification.
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"Business Day" means any day other than (i) a Saturday or Sunday,
(ii) a day on which banking institutions in the City of New York are
authorized or required by law or executive order to remain closed or (iii)
a day on which the Corporate Trust Office of the Trustee is closed for
business.
"Calculation Agent" has the meaning specified in Section 10.4.
"Capital Disqualification Event" means the receipt by the Company of
an Opinion of Counsel experienced in such matters that, as a result of an
amendment to or a change in law or regulation (including any announced
prospective change) or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than insubstantial risk that within
ninety (90) days of the date of such opinion, the aggregate principal
amount of the Securities will not be eligible to be treated by the Company
as "Tier 1 Capital" (or the then equivalent) for purposes of the capital
adequacy guidelines of the Federal Reserve Board or other "appropriate
Federal banking agency" as such term is defined in 12 U.S.C. 1813(q), which
amendment, change or prospective change becomes effective or would become
effective, as the case may be, on or after the date of issuance of the
Securities; provided, however, that the inability of the Company to treat
all or any portion of the principal amount of the Securities as Tier 1
Capital shall not constitute the basis for a Capital Disqualification Event
if such inability results from the Company having such Securities
outstanding in an amount that for any reason is in excess of the amount
which may now or hereafter qualify for treatment as Tier 1 Capital under
applicable capital adequacy guidelines.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by its Chairman of the
Board of Directors, its Vice Chairman of the Board of Directors, its Chief
Executive Officer, President or a Vice President, and by its Chief
Financial Officer, Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered, which office at the date of this Indenture is located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
Administration.
"Debt" means, with respect to any Person, whether recourse is to all
or a portion of the assets of such Person, whether currently existing or
hereafter incurred and whether or not contingent and without duplication,
(i) every obligation of such Person for money borrowed; (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person;
(iv) every
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obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable or other
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of such Person; (vi) all indebtedness of such
Person, whether incurred on or prior to the date of this 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; (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, such Person has guaranteed or is responsible or liable for, directly
or indirectly, as obligor or otherwise; and (viii) any renewals,
extensions, refundings, amendments or modifications of any obligation of
the type referred to in clauses (i) through (vii).
"Defaulted Interest" has the meaning specified in Section 3.1.
"Delaware Trustee" means, with respect to the Trust, the Person
identified as the "Delaware Trustee" in the Trust Agreement, solely in its
capacity as Delaware Trustee of the Trust under the Trust Agreement and not
in its individual capacity, or its successor in interest in such capacity,
or any successor Delaware Trustee appointed as therein provided.
"Depositary" means an organization registered as a clearing agency
under the Exchange Act that is designated as Depositary by the Company or
any successor thereto. DTC will be the initial Depositary.
"Depository Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a
Depositary effects book-entry transfers and pledges of securities deposited
with the Depositary.
"Distributions" means amounts payable in respect of the Trust
Securities as provided in the Trust Agreement and referred to therein as
"Distributions."
"Dollar" or "$" means the currency of the United States of America
that, as at the time of payment, is legal tender for the payment of public
and private debts.
"DTC" means The Depository Trust Company, a New York corporation.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934 or any
statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4.
"Extension Period" has the meaning specified in Section 3.9.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, as from time to time constituted, or if at any time after
the execution of this Indenture such Board is not existing and performing
the duties now assigned to it, then the body performing such duties on such
date.
Tier 1 Risk BHCK7206 Tier 1 Risk Ratio: Core Capital
Weighted Assets Schedule HC-R (Tier 1)/ Risk-Adjusted Assets
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Ratio of Double (BHCP0365)/(BCHCP3210) Total equity investments in
Leverage Schedule PC in the LP subsidiaries divided by the total
equity capital. This field is
calculated at the parent company
level. "Subsidiaries" include bank,
bank holding company, and non-bank
subsidiaries.
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Non-Performing (BHCK5525- BHCK3506+BHCK5526- Total Nonperforming Assets
Assets to Loans BHCK3507+BHCK2744)/(BHCK2122+BHCK2744) (NPLs+Foreclosed Real Estate+Other
and OREO Schedules HC-C, HC-M & HC-N Nonaccrual & Repossessed
Assets)/Total Loans+Foreclosed Real
Estate
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Tangible Common (BHDM3210-BHCK3163)/(BHCK2170- (Equity Capital -
Equity as a BHCK3163) Goodwill)/(Total Assets - Goodwill)
Percentage of Schedule HC
Tangible Assets
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Ratio of Reserves (BHCK3123+BHCK3128)/(BHCK5525- Total Loan Loss and Allocated
to Non-Performing BHCK3506+BHCK5526-BHCK3507) Transfer Risk Reserves/ Total
Loans Schedules HC & HC-N & HC-R Nonperforming Loans (Nonaccrual +
Restructured)
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Ratio of Net (BHCK4635-BHCK4605)/(BHCK3516) Net charge offs for the period as
Charge-Offs to Schedules HC-B & HC-K a percentage of average loans.
Loans
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Return on Average (BHCK4340/BHCK3368) Net Income as a percentage of
Assets (annualized) Schedules HI & HC-K Assets.
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Net Interest Margin (BHCK4519)/(BHCK3515+BHCK3365+ (Net Interest Income Fully Taxable
(annualized) BHCK3516+BHCK3401+BHCKB985) Equivalent, if available/Average
Schedules HI Memorandum and HC-K Earning Assets)
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Efficiency Ratio (BHCK4093)/(BHCK4519+BHCK4079) (Non-interest Expense)/(Net
Schedule HI Interest Income Fully Taxable
Equivalent, if available, plus
Non-interest Income)
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Ratio of Loans to (BHCKB528+BHCK5369)/(BHCK2170) Total Loans & Leases(Net of
Assets Schedule HC Unearned Income & Gross of
Reserve)/Total Assets
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Ratio of Loans to (BHCKB528+BHCK5369)/(BHDM6631 Total Loans & Leases (Net of
Deposits +BHDM6636+BHFN6631+BHFN6636) Unearned Income & Gross of
Schedule HC Reserve)/Total Deposits (Includes
Domestic and Foreign Deposits)
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Total Assets (BHCK2170) The sum of total assets. Includes
Schedule XX xxxx and balances due from
depository institutions;
securities; federal funds sold and
securities purchased under
agreements to resell; loans and
lease financing receivables;
trading assets; premises and
fixed assets; other real estate
owned; investments in
unconsolidated subsidiaries and
associated companies; customer's
liability on acceptances
outstanding; intangible assets; and
other assets.
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Net Income (BHCK4300) The sum of income (loss) before
Schedule HI extraordinary items and other
adjustments and extraordinary
items; and other adjustments, net
of income taxes.
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