As filed with the Securities and Exchange Commission on June 25, 2014
Registration No. 333-196627
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
INDEPENDENT BANK GROUP, INC.
(Exact name of registrant as specified in its charter)
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Independent Bank Group, Inc.
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Texas
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13-4219346
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(Exact name of registrant as specified in
its charter)
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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1600 Redbud Boulevard, Suite 400
McKinney, Texas 75069-3257
(972) 562-9004
(Address,
including zip code and telephone number, including area code, of registrant’s principal executive offices)
Mr. David R. Brooks
Chairman and Chief Executive Officer
1600 Redbud Boulevard, Suite 400
McKinney, Texas 75069-3257
(972) 562-9004
(Name,
address, including zip code and telephone number, including area code, of agent for service)
Copies to:
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Joseph A. Hoffman, Esq.
Dudley Murrey, Esq.
Andrews Kurth LLP
1717
Main Street, Suite 3700
Dallas, Texas 75201
(214) 659-4593
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Mark Haynie, Esq.
Haynie Rake Repass & Lowry, P.C.
14643 Dallas Parkway, Suite 550
Dallas, Texas 75254
(972)
716-1855
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Approximate date of commencement of proposed sale to the public
: From time to time after the effective date of this registration statement.
If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the
following box.
¨
If any of the securities being registered on this form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.
x
If this form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.
¨
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
¨
If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Nonaccelerated filer
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x
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Smaller reporting company
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The registrant hereby amends this registration statement on such date or dates as may be necessary to
delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction white the offer or sale is not permitted.
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PROSPECTUS
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SUBJECT TO COMPLETION, DATED JUNE 25, 2014
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1600 Redbud Boulevard, Suite 400
McKinney, Texas 75069-3257
(972) 562-9004
Debt Securities, Common Stock and Preferred Stock
By this
prospectus, Independent Bank Group, Inc. may offer from time to time:
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debt securities of one or more series;
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shares of its common stock;
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shares of one or more series of its preferred stock; and
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units of our securities.
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In addition, this prospectus may be used to offer securities
for the account of selling securityholders.
When each of Independent Bank Group, Inc. or selling securityholders offers securities, we or
they will provide you with a prospectus supplement describing the terms of the specific issue of securities being offered, including the price at which those securities are being offered to the public.
We or any selling securityholders may offer and sell these securities to or through one or more underwriters, dealers and agents, or directly
to purchasers, on a continuous or delayed basis.
You should read this prospectus and any prospectus supplement carefully before you
decide to invest. This prospectus may not be used to sell securities unless it is accompanied by a prospectus supplement that further describes the securities being offered to you.
Our common stock is listed for trading on the NASDAQ Stock Market, Inc. Global Select Market, or NASDAQ Global Select Market, under the symbol
“IBTX.” We have not yet determined whether any of the other securities that may be offered by this prospectus will be listed on any exchange. If we decide to apply to list any such securities on a securities exchange upon their issuance,
the prospectus supplement relating to those securities will disclose the exchange on which we will apply to have those securities listed.
Investing in
our securities involves risks. See “
Risk Factors
” in our most recent Annual Report on
Form 10-K,
which is incorporated herein by reference, and in any of our
subsequently filed quarterly and current reports that are incorporated herein by reference. We may include specific risk factors in an applicable prospectus supplement under the heading “Risk Factors.” You should carefully read this
prospectus together with the documents we incorporate by reference and the prospectus supplement before you invest in our securities.
This prospectus is not an offer to sell any securities other than the securities offered hereby. This prospectus is not an offer to sell
securities in any jurisdictions or in any circumstances in which such an offer is unlawful.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The offered securities are not savings accounts, deposits or other obligations of any bank or savings associations and are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.
The date
of this prospectus is June , 2014.
You should rely only on the information contained in or incorporated by reference in this prospectus and in
the applicable prospectus supplement deciding whether to invest. We have not, and no selling securityholder has, authorized anyone to give oral or written information about this offering, our Company, or the securities offered hereby that is
different from the information included or incorporated by reference in this prospectus. If anyone provides you with different information, you should not rely on it. You should assume that the information contained in this prospectus is accurate
only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form
S-3
that we filed with the Securities and
Exchange Commission, or the SEC, using a “shelf” registration process. Under this shelf registration statement, we may offer and sell, from time to time and in one or more offerings, either separately or together, shares of our common
stock, shares of one or more series of our preferred stock, senior debt securities of one or more series, and subordinated debt securities of one or more series and unit purchase agreements as described in this prospectus and an applicable
prospectus supplement.
Each time we sell securities we will provide a prospectus supplement containing specific information about the
terms of the securities being offered thereby. The prospectus supplement may include a discussion of any risk factors or other special considerations that apply to those securities. The prospectus supplement may also add, update or change the
information in this prospectus. If there is any inconsistency between the information in this prospectus (including the information incorporated by reference herein) and information in any prospectus supplement, you should rely on the information in
the applicable prospectus supplement as it will control. You should carefully read both this prospectus and the applicable prospectus supplement together with additional information described under the heading “Where You Can Find More
Information” or incorporated herein by reference as described under the heading “Incorporation of Certain Documents by Reference.”
References in this prospectus to “our Company,” “we,” “us” and “our” are to Independent Bank Group,
Inc. In this prospectus, we sometimes refer to the debt securities, common stock, preferred stock, unit purchase agreements we may offer and the securities that may be offered by selling securityholders collectively as “offered
securities.”
ABOUT INDEPENDENT BANK GROUP, INC.
Independent Bank Group, Inc. is incorporated in Texas and is a bank holding company registered under the Bank Holding Company Act of 1956. We
are based in McKinney, Texas, and conduct our operations primarily through our bank subsidiary, Independent Bank. Independent Bank provides a wide range of relationship-driven commercial banking products and services tailored to meet the needs of
businesses, professionals and individuals. It operates 35 banking offices in three market regions located in the Dallas-Fort Worth, Austin/Central Texas and Houston, Texas areas. Our common stock is traded on the NASDAQ Global Select Market under
the symbol “IBTX.”
Our principal executive offices are located at 1600 Redbud Boulevard, Suite 400, McKinney, Texas
75069-3257.
Our telephone number is (972) 562-9004. Our website is
www.ibtx.com
. References to our website and those of our subsidiaries are not intended to be active links and the information on such
websites is not, and you must not consider that information to be, a part of this prospectus.
RISK FACTORS
An investment in our securities involves certain risks. Before making an investment decision, you should carefully read and consider
the risk factors set forth in our most recent Annual Report on Form 10-K filed with the SEC (our “Latest Form 10-K”) , under the heading “Risk Factors” as well as any updated or additional disclosure about risk factors included
in any of our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K or other filings that we have made with the SEC since the date of the Latest Form 10-K that are incorporated by reference in this prospectus. We may include specific risk
factors in an applicable prospectus supplement under the heading “Risk Factors.” Additional risks and uncertainties of which we are not aware or that we believe are not material at the time could also materially and adversely affect our
business, financial condition, results of operations or liquidity. In any case, the value of the securities offered by means of this prospectus and any applicable prospectus supplement could decline and you could lose all or part of your investment.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, the documents incorporated by reference herein and any prospectus supplement may contain statements that we believe are
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are statements or projections with respect to matters such as our future results of operations,
including our future revenues, operating income, net interest income, net income, expenses, provision for taxes, effective tax rate, earnings per share and cash flows, our future capital expenditures and dividends, our future financial condition and
changes therein, including changes in our loan portfolio and allowance for loan losses, our future capital structure or changes therein, the plan and objectives of management for future operations, our future or proposed acquisitions, the future or
expected effect of acquisitions on our operations, results of operations and financial condition, our future economic performance, and the statements of the assumptions underlying any such statement. Such statements are typically identified by the
use in the statements of words or phrases such as “aim,” “anticipate,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is estimated,”
“is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will
grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word
“could,” “may” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. The
forward-looking statements that we make are based on our current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to future results and occurrences, they are
subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact
nor guarantees or assurances of future performance. Many possible events or factors could affect our future financial results and performance and could cause such results or performance to differ materially from those expressed in forward-looking
statements. These factors include, but are not limited to, the following:
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worsening business and economic conditions nationally, regionally and in our target markets, particularly in Texas and the geographic areas within Texas in which we operate;
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our dependence on our management team, including our Chief Executive Officer, David R. Brooks, and our ability to attract, motivate and retain qualified personnel;
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the concentration of our business within our geographic areas of operation in Texas;
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deteriorating asset quality and higher loan charge-offs;
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concentration of our loan portfolio in commercial and residential real estate loans and changes in the prices, values and sales volumes of commercial and residential real estate;
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inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates;
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lack of liquidity, including as a result of a reduction in the amount of sources of liquidity we currently have;
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material decreases in the amount of deposits we hold;
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regulatory requirements to maintain higher minimum capital levels;
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changes in market interest rates that affect the pricing of our loans and deposits and our net interest income;
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fluctuations in the market value and liquidity of the securities we hold for sale;
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effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services;
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changes in economic and market conditions that affect the amount of assets we have under administration;
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the institution and outcome of litigation and other legal proceedings against us or to which we become subject;
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the occurrence of market conditions adversely affecting the financial industry generally;
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the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators, such as the Dodd-Frank Wall Street
Reform and Consumer Protection Act, or the Dodd-Frank Act;
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changes in accounting policies, practices and auditing standards, as may be adopted by bank regulatory agencies, the Financial Accounting Standards Board, the SEC and Public Company Accounting Oversight Board, as the
case may be;
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governmental monetary and fiscal policies;
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changes in the scope and cost of FDIC insurance and other coverage;
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the effects of war or other conflicts, acts of terrorism (including cyber attacks) or other catastrophic events, including storms, droughts, tornadoes and flooding, that may affect general economic conditions;
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our actual cost savings resulting from the acquisitions of BOH Holdings, Live Oak Financial Corp. and Collin Bank and other financial institutions that we may hereafter acquire are less than expected, we are unable to
realize those cost savings as soon as expected or we incur additional or unexpected costs in connection with the integration and operation of those institutions;
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our revenues after the BOH Holdings, Inc., Live Oak Financial Corp. and Collin Bank acquisitions and other financial institutions that we may hereafter acquire are less than expected;
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deposit attrition, operating costs, customer loss and business disruption before and after our completed acquisitions, including, without limitation, difficulties in maintaining relationships with employees, may be
greater than we expected;
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the risk that our businesses, and financial institutions that we have or will acquire, will not be integrated successfully, or such integrations may be more difficult, time-consuming or costly than expected;
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the quality of the assets acquired from other organizations is lower than we had determined in our due diligence investigation and related exposure to unrecoverable losses on loans acquired;
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changes occur in business conditions and inflation;
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personal or commercial customer bankruptcies increase;
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technology-related changes are harder to make or are more expensive than expected; and
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the other factors that are described or referenced in Part II, Item 1A. of our Latest
Form 10-K
under the caption “Risk Factors.”
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We urge you to consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements we may
make. As a result of these and other matters, including changes in facts, assumptions not being realized or other factors, the actual results relating to the subject matter of any forward-looking statement may differ materially from the anticipated
results expressed or implied in that forward-looking statement. Any forward-looking statement made by us in any report, filing, press release, document, report or announcement speaks only as of the date on which it is made. We undertake no
obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
We may disclose the assumptions that underlie a forward-looking statement that we make. We believe we have chosen these assumptions in good
faith and that such assumptions were reasonable at the time the forward-looking statement was made. However, we caution you that actual results often vary, at least to some degree, from the projected results or expectations discussed or implied by
forward-looking statements as a result of assumptions not being realized, changes in facts and other circumstances and the differences between projected results or expectations discussed in forward looking statements and actual results can be
material.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Our historical ratios of earnings to fixed charges and earnings to combined fixed charges and preferred stock dividends for the periods
indicated are set forth in the table below. As of March 31, 2014, we did not have any shares of preferred stock outstanding. On April 15, 2014, we issued 23,938.35 shares of our Senior
Non-Cumulative
Perpetual Preferred Stock, Series A, or Series A preferred stock, in connection with the acquisition of BOH Holdings, Inc. on such date. As a result of the time at which such issuance occurred, our Series A preferred stock did not
affect any of the five years ended December 31, 2013, or the three months ended March 31, 2014 and 2013. We expect the dividend on our Series A preferred stock to be approximately $60,000 per quarter, beginning with the quarter ended
June 30, 2014.
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The ratio of earnings to fixed charges is computed by dividing (1) income from continuing
operations before income taxes and fixed charges by (2) total fixed charges. The ratio of earnings to combined fixed charges and preferred stock dividends is computed by dividing (1) income from continuing operations before income taxes
and fixed charges by (2) total fixed charges and preferred stock dividends.
For purposes of computing these ratios:
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earnings consist of income before income taxes plus fixed charges;
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fixed charges, excluding interest on deposits, include interest expense (other than on deposits) and the estimated portion of rental expense attributable to interest, net of income from subleases; and
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fixed charges, including interest on deposits, include all interest expense and the estimated portion of rental expense attributable to interest, net of income from subleases.
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Three Months
Ended March 31,
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Year Ended December 31,
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2014
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2013
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2013
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2012
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2011
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2010
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2009
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Ratio of Earnings to Fixed Charges:
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Excluding Interest on Deposits
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6.95
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4.64
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5.37
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4.37
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4.85
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5.39
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3.39
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Including Interest on Deposits
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3.30
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2.73
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2.95
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2.29
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2.02
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1.95
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1.48
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USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement, we expect to use the net proceeds from the sale of offered securities by
us for general corporate purposes, including:
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maintenance of consolidated capital to support our growth, enabling us to continue to satisfy our regulatory capital requirements;
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contributions of capital to Independent Bank to support Independent Bank’s growth, enabling it to continue to satisfy its regulatory capital requirements;
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financing of acquisitions of financial institutions; and
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refinancing, reduction or repayment of debt.
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The prospectus supplement with respect to an
offering of offered securities may identify different or additional uses for the proceeds of that offering.
Except as otherwise stated in
an applicable prospectus supplement, pending the application of the net proceeds from the sale of offered securities, we expect to either deposit such net proceeds in deposit accounts or invest them in short-term obligations.
We will not receive proceeds from sales of securities by selling securityholders except as otherwise stated in an applicable prospectus
supplement.
THE SECURITIES WE MAY OFFER
The descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize certain
material terms and provisions of the various types of securities that we or selling securityholders may offer. The particular material terms of the securities offered by a prospectus supplement, to the extent not described in this prospectus, will
be described in that prospectus supplement. If indicated in the applicable prospectus supplement, the terms of the offered securities may differ from the terms summarized below. The prospectus supplement will also supplement, where applicable,
material U.S. federal income tax considerations relating to the offered securities, and will contain information regarding the securities exchange, if any, on which the offered securities will be listed. The descriptions of our securities being
offered appearing herein and in the
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applicable prospectus supplement do not contain all of the information that you may find useful or that may be important to you. You should refer to the provisions of the actual documents that
govern those securities and whose terms are summarized herein and in the applicable prospectus supplement, because those documents, and not the summaries, define your rights as holders of the relevant securities. For more information, please review
the forms of these documents, which are or will be filed with the SEC and will be available as described under the heading “Where You Can Find More Information” below.
We may offer and sell from time to time, in one or more offerings, the following:
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our debt securities of one or more series, which debt securities may be our senior, unsecured debt securities or our subordinated, unsecured debt securities;
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shares of our common stock;
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shares of one or more series of our preferred stock other than shares of our outstanding Series A preferred stock; and/or
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unit purchase agreements to which investors would acquire units of two or more of the foregoing securities.
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Selling securityholders may offer and sell from time to time, in one or more offerings, the following:
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shares of our common stock owned by the selling securityholders; and/or
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shares of our Series A preferred stock owned by the selling securityholder.
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DESCRIPTION OF DEBT SECURITIES
General
We may issue senior debt securities and subordinated debt securities, which in each case will be unsecured, direct, general obligations of our
Company.
The senior debt securities will rank equally in right of payment with all of our other unsecured and unsubordinated debt.
The subordinated debt securities will be subordinate and junior in right of payment to our senior indebtedness, including our senior debt securities as described below under “–Subordinated Debt Securities” and in the prospectus
supplement applicable to any subordinated debt securities that we may offer. For purposes of the descriptions under the heading “Description of Debt Securities,” we may refer to the senior debt securities and the subordinated debt
securities collectively as the “debt securities.” The debt securities will be effectively subordinated to the creditors and preferred equity holders of our subsidiaries, if any.
We will issue senior debt securities under a senior debt indenture, dated June 25, 2014, and issue subordinated debt securities under a
subordinated debt indenture, dated June 25, 2014, which indentures will be, in each case, between us and Wells Fargo Bank, National Association, in its capacity as the indenture trustee. We refer to the senior debt indenture or subordinated debt
indenture, together with any applicable supplemental indentures thereto, in this prospectus as an “indenture” and collectively as the “indentures.” The indentures permit one or more series of senior debt securities or
subordinated debt securities, as the case may be, to be established and issued thereunder. Any such series of senior debt securities or subordinated debt securities and their terms and conditions will be established by means of the adoption of a
supplemental indenture, the adoption of a resolution of our board of directors or the adoption of a resolution of our board of directors and the action of certain officers of our Company acting pursuant to authority delegated to them by such
resolution of the board and evidenced by an officers’ certificate setting forth the terms and conditions of the series of debt securities established by that resolution and the action of such authorized officers. Generally, multiple series of
debt securities will vary from one another with regard to the rate at which interest accrues on such debt securities and the term of such debt securities, and the senior debt securities and subordinated debt securities will vary from one another
with regard to the priority of payment.
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The indentures meet the requirements of the Trust Indenture Act of 1939, as amended, or the
“Trust Indenture Act” and will be qualified under and governed by the Trust Indenture Act. The trustee meets the requirements of the Trust Indenture Act for trustees under indentures being qualified under the Trust Indenture Act.
The descriptions under the heading “Description of Debt Securities” relating to the senior debt securities and subordinated debt
securities and the indentures are summaries of their provisions. The summaries are not complete and are qualified in their entirety by reference to the indentures and senior and subordinated debt securities and the further descriptions in the
applicable prospectus supplement. A copy of each indenture has been filed with the SEC and incorporated by reference as an exhibit to the registration statement that includes this prospectus and will be available for review as described under the
heading “Where You Can Find More Information” above. We will file a copy of each supplemental indenture, board resolution and board resolution and related officers’ certificate establishing a series of debt securities and setting the
respective series’ terms and conditions with the SEC in connection with the offer and sale of the first debt securities of such series to be offered and sold and will file the form of debt security representing the debt securities of such
series with the SEC in connection with the offering of such debt securities. Whenever we refer in this prospectus or in any prospectus supplement to particular sections or defined terms of an indenture, those sections or defined terms are
incorporated by reference in this prospectus or in the prospectus supplement, as applicable. You should refer to the provisions of the indentures for provisions that may be important to you.
The terms and conditions described under this heading are terms and conditions that apply generally to the debt securities. The particular
terms of any series of debt securities will be summarized in the applicable prospectus supplement. Those terms may differ from the terms summarized below.
Except as set forth in the indentures and described in the prospectus supplements, the indentures do not limit the amount of senior debt
securities or subordinated debt securities we may issue under the indentures. In the event that our revolving credit facility with U.S. Bank, National Association is still in place, we would need to seek the approval of U.S. Bank to issue any senior
debt securities. We are not required to issue all of the debt securities of one series at the same time and, unless otherwise provided in an indenture and described in a prospectus supplement, we may, from time to time, issue additional debt
securities under that series without the consent of the holders of the outstanding debt securities of that series. Additional debt securities issued in this manner will have the same terms and conditions as the outstanding debt securities of that
series, except for their original issue date and issue price, and will be consolidated with, and form a single series with, the previously outstanding debt securities of that series. In certain instances, additional debt securities of a series sold
may be issued with a different CUSIP number from that assigned to previously issued debt securities of that issue.
We intend for the debt
securities of each subordinated debt series to have such terms and conditions as will permit the subordinated debt securities that we issue and sell to investors to qualify as Tier 2 capital under the regulatory capital requirements for bank holding
companies. As a result, the subordinated debt securities of each subordinated debt series will have a minimum term of five years, will be unsecured, will not have credit-sensitive features or other provisions that are inconsistent with safe and
sound banking practice, and will have limited events of default and other provisions that will permit holders of the subordinated debt securities to accelerate payment of principal of, or interest on, any of the subordinated debt securities only
upon the occurrence of any event other than our bankruptcy.
Terms and Conditions of Debt Securities to be Described in the Prospectus Supplement
The prospectus supplement relating to any debt securities of a series that we may offer will set forth the price or prices at which
the debt securities will be offered to the public and the specific terms and conditions of the debt securities of that series to the extent such terms and conditions are not described in this prospectus. The prospectus supplement will set forth the
aggregate principal amount of the debt securities of a series being offered by means of such prospectus supplement and the price(s) (expressed as a percentage of the principal amount) at which the debt securities will be offered and sold to the
public. Each series of debt securities will be established and its terms and conditions set by a supplemental indenture. These terms and conditions of the debt securities may include, without limitation, the following:
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the title and amount of the series of the debt securities and whether they are senior debt securities or subordinated debt securities;
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any limit on the aggregate principal amount of the debt securities of such series that may be issued;
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if other than the principal amount of those debt securities, the portion of the principal amount payable upon declaration of acceleration of the maturity of the debt securities of the series;
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the maturity date or dates, or the method for determining the maturity date or dates, on which the principal of the debt securities of the series will be payable and any rights of extension;
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the rate or rates, which may be fixed or variable, or the method of determining the rate or rates, at which the debt securities of the series will bear interest, if any;
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the date or dates from which any interest will accrue on the debt securities of the series, the date or dates on which accrued interest will be payable and the regular related record dates for the payment of accrued
interest;
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the place or places where payments of principal, interest or premium, if any, will be payable, where the debt securities of the series may be surrendered for registration of transfer or exchange, and where notices or
demands to or upon us may be served;
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the period or periods within which, the price or prices at which, and the other terms and conditions upon which, the debt securities of the series may be redeemed, in whole or in part, at our option, if we are to have
such an option;
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with respect to our subordinated debt securities, the terms of the subordination of those debt securities in the right of payment to our senior indebtedness;
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prepayment rights, if any, applicable to the debt securities of the series and any premium payable in connection with any such prepayment;
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our obligation, if any, to redeem, repay or purchase the debt securities of the series pursuant to any sinking fund or analogous provision or at the option of a holder of the debt securities, and the period or periods
within which, or the date and dates on which, the price or prices at which, and the other terms and conditions upon which, the debt securities will be redeemed, repaid or purchased, in whole or in part, pursuant to that obligation;
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whether the amount of payments of principal of and premium, if any, or interest, if any, on the debt securities of the series may be determined with reference to an index, formula or other method, and the manner in
which the amounts are to be determined;
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affirmative, negative and, in the case of our senior debt securities, financial covenants applicable with respect to the debt securities of the series;
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any additions to, modifications of, or deletions from the terms of the debt securities of the series with respect to events of default, amendments, merger, consolidation and sale or covenants set forth in the indenture;
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whether the debt securities of the series will be issued in certificated or book-entry form;
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the denomination of the debt securities of the series, if other than $1,000 and any integral multiple thereof;
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if the debt securities of the series will be initially issuable in global form, the depository or its nominee with respect to the debt securities and the circumstances under which the global security may be registered
for transfer or exchange in the name of a person other than the depository or its nominee;
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the conditions upon which definitive debt securities of the series will be issued to beneficial owners;
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the applicability, if any, of the discharge, defeasance and covenant defeasance provisions of the indenture to the debt securities of the series and any additional or different terms on which such debt securities may be
discharged or defeased;
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whether the debt securities of the series can be converted into or exchanged for other securities of our Company, and the related terms and conditions;
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in the case of our subordinated debt securities, provisions relating to any modification of the subordination provisions of the subordinated debt securities of the series, which are described elsewhere in this
prospectus;
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whether the debt securities of the series will be sold as part of units consisting of debt securities, common stock and/or preferred stock;
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any trustee, depositary, authenticating agent, paying agent, transfer agent, registrar or other agent with respect to the debt securities of the series; and
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any other terms of the debt securities of the series not inconsistent with the provisions of its applicable indenture.
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Unless otherwise specified in the applicable prospectus supplement relating to the debt securities of a particular series, the debt securities
will not be listed on any securities exchange.
We may offer and sell our debt securities at a substantial discount below their stated
principal amount. The debt securities sold on that basis may be original issue discount, or OID, securities, which means that less than the entire principal amount of the original issue discount securities will be payable upon declaration of
acceleration of their maturity. Special federal income tax, accounting and other considerations applicable to original issue discount securities will be described in the applicable prospectus supplement.
Any material federal income tax considerations applicable to any discounted debt securities or to debt securities issued at par that are
treated as having been issued at a discount for federal income tax purposes are described in this prospectus and will be supplemented in the applicable prospectus supplement.
Special federal income tax, accounting and other considerations applicable to debt securities, the principal, premium, if any, or interest of
which may be determined by reference to an index, formula or other method will be described in the applicable prospectus supplement.
Except as may be otherwise set forth in the prospectus supplement by which we offer particular debt securities, the indentures do not contain
any provisions that would limit our ability to incur indebtedness, including indebtedness senior to the debt securities, or that would afford holders of debt securities protection in the event of a highly leveraged or similar transaction involving
our Company. The indentures do not contain specific provisions that would afford debt securityholders protection in the event of a change of control, although such provisions may be included in the terms and conditions of the debt securities of a
series by means of the supplemental indenture establishing that series. You should refer to the applicable prospectus supplement for information with respect to the deletion, modification or addition of any of the events of default or covenants that
may be included in the debt securities of a series that are described below, including any addition of a covenant or other provision providing event risk or similar protection.
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For purposes of the descriptions under the heading “Description of Debt Securities,”
“subsidiary” means a corporation, a partnership, business or statutory trust, or a limited liability company a majority of the outstanding voting equity securities or a majority of the voting membership or partnership interests or
beneficial interests in a trust, as the case may be (collectively, referred to as “voting equity securities”), of which is owned or controlled, directly or indirectly, by us or by one or more of our other subsidiaries. For the purposes of
this definition, “voting equity securities” means securities having voting power for the election of directors, managers, managing partners or trustees, as the case may be, whether at all times or only so long as no senior class of stock
has voting power by reason of any contingency.
Interest and Interest Rates
General
In the applicable prospectus
supplement, we will designate the debt securities of a series as either bearing interest at a fixed rate of interest or bearing interest at a floating rate of interest. Each debt security will begin to accrue interest from the date it is originally
issued. Interest on each such debt security will be payable in arrears on the interest payment dates set forth in the applicable prospectus supplement and as otherwise described below and at maturity or, if earlier, the redemption date described
below. Interest will be payable to the holder of record of the debt securities at the close of business on the record date for each interest payment date, which record dates will be specified in such prospectus supplement. As used in the indentures,
the term “business day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are generally authorized or required by law or regulation to close in Dallas, Texas.
Fixed Rate Debt Securities
If a series
of debt securities being offered pursuant to this prospectus will bear interest at a fixed rate of interest, the debt securities of that series will bear interest at the annual interest rate specified on the cover page of the applicable prospectus
supplement. Interest on those debt securities will be payable semi-annually in arrears on the interest payment dates for those debt securities or at such other intervals as are established in the terms of the debt securities of a particular series.
If the maturity date, any redemption date or an interest payment date is not a business day, we will pay principal, premium, if any, and interest on the next business day, and no interest will accrue on, from and after the maturity date, the
redemption date or that interest payment date. Interest on the fixed rate debt securities will be computed on the basis of a 360-day year of twelve 30-day months.
Floating Rate Debt Securities
If a
series of debt securities being offered will bear interest at a floating rate of interest, the debt securities of that series will bear interest during each relevant interest period at the rate determined as set forth in the applicable prospectus
supplement and as otherwise set forth below. Each floating rate debt security will have an interest rate basis or formula.
The floating
rate debt securities may have a maximum or minimum rate limitation. In no event, however, will the rate of interest on the debt securities be higher than the maximum rate of interest permitted by Texas law as that law may be modified by United
States law of general application.
The trustee or another bank or investment banking firm designated by us will act as the calculation
agent for floating rate debt securities and, in that capacity, will compute the interest accruing on the debt securities unless otherwise specified in the applicable prospectus supplement.
If any interest payment date for the debt securities of a series bearing interest at a floating rate (other than the maturity date or a
redemption date) would otherwise be a day that is not a business day, then the interest payment date will be postponed to the following date which is a business day, unless that business day falls in the next succeeding calendar month, in which case
the interest payment date will be the immediately preceding business day. If the maturity date of such debt securities (or a tax or other redemption date, if earlier than the stated maturity date for those debt securities) falls on a day which is
not a business day, then we will make the required payment of principal, premium, if any, and interest on the following day which is a business day, as if it were made on the date the payment was due. Interest will not accrue on, from or after the
stated maturity date (or any tax or other redemption date) as a result of this delayed payment.
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The calculation agent will reset the rate of interest on the debt securities of a series bearing
interest at a floating rate on each interest payment date. If any of the interest reset dates for the debt securities is not a business day, that interest reset date will be postponed to the next succeeding business day, unless that day is in the
next succeeding calendar month, in which case the interest reset date will be the immediately preceding business day. The interest rate set for the debt securities on a particular interest reset date will remain in effect during the interest period
commencing on that interest reset date. Each interest period will be the period from and including the interest reset date to but excluding the next interest reset date or until the maturity date of the debt securities, as the case may be. The
interest reset date relating to each interest period will be determined as set forth in the terms of each series of floating rate debt securities.
All percentages resulting from any calculation will be rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upward. Dollar amounts used in any calculation will be rounded to the nearest cent (with one-half cent being rounded upward).
The calculation agent will promptly notify the trustee of each determination of the interest rate, as well as of the interest period, the
amount of interest expected to accrue for that interest period and the interest payment date related to each interest reset date, as soon as such information becomes available. The trustee will make such information available to the holders of the
relevant debt securities upon request. The calculation agent’s determination of any interest rate and its calculation of the amount of interest for any interest period will be final and binding in the absence of a manifest error.
So long as floating rate debt securities of a series are outstanding, we will at all times maintain a calculation agent as to the debt
securities of that series. We will appoint a bank, trust company, investment banking firm or other financial institution to act as the successor calculation agent to the trustee or any of its successors in that capacity in the event that:
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any calculation agent is unable or unwilling to act;
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any calculation agent fails duly to establish the floating interest rate for a series of floating rate debt securities; or
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we propose to remove any calculation agent.
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Ranking
Senior Debt Securities
The senior debt
securities of a series that we issue under the senior debt indenture will rank equally in right of payment of the principal of and premium, if any, and interest on such senior debt securities with all of our other unsecured and unsubordinated debt,
including the senior debt securities of any other series.
Subordinated Debt Securities
As provided in the subordinated debt indenture and as described in the prospectus supplement describing the applicable series of subordinated
debt securities, the payment of the principal of and premium, if any, and interest on the subordinated debt securities of any series, including amounts payable on any redemption or repurchase in accordance with the terms of such subordinated debt
securities, will be subordinated to the extent and in the manner provided in the terms of the subordinated debt securities of a series in right of payment to the prior payment in full of all of our senior indebtedness, which is defined below. If
there is a distribution to our creditors in a liquidation or winding up of our Company, or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to our Company, the holders of senior debt will first be entitled to
receive payment in full of all amounts due on the senior debt (or provision shall be made for such payment in cash) before any payments may be
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made on the subordinated debt securities. Because of this subordination, holders of our senior debt securities and general creditors of our Company may recover more of the indebtedness of our
Company owed to them, ratably, than will the holders of subordinated debt securities in the event of a distribution of assets upon bankruptcy, reorganization, insolvency, receivership or similar proceeding, or a liquidation, termination or winding
up of our Company.
The supplemental indenture, board resolution or board resolution and related officers’ certificate establishing a
series of subordinated debt securities will set forth the terms and conditions under which, if any, we will not be permitted to pay some or all of the principal of or premium, if any, or interest on the subordinated debt securities of a series upon
the occurrence of an event of default or other circumstances arising under or with respect to senior indebtedness of our Company, including senior debt securities.
As discussed above, the indentures may place no limitation on the amount of indebtedness that we may incur, and the subordinated debt
indenture will not limit the amount of debt senior to the subordinated debt securities of any series that we may incur. We expect to incur from time to time additional indebtedness constituting senior debt, which may include indebtedness that is
senior to the subordinated debt securities but subordinate to our other obligations.
“Senior indebtedness” means the
principal of, and premium, if any, and interest, including interest accruing after the commencement of any bankruptcy proceeding relating to our Company, on, or substantially similar payments we will make in respect of the following categories of
indebtedness, whether that indebtedness was outstanding at the date of execution of the subordinated debt indenture or thereafter incurred, created or assumed:
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“existing senior indebtedness,” which means our indebtedness in the amount of $35.0 million that may be incurred pursuant to our revolving credit facility under which U.S. Bank, National Association, is the
lender and any renewal or extension thereof or any new facility replacing or refinancing such revolving credit facility;
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our other indebtedness evidenced by notes, debentures, or bonds or other securities, whether issued under the provisions of any indenture (including indentures other than the senior debt indenture), fiscal agency
agreement, debenture or note purchase agreement or other agreement, including the senior debt securities that may be offered by means of this prospectus and one or more prospectus supplements;
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our indebtedness for money borrowed or represented by purchase-money obligations, as defined below;
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our obligations as lessee under leases of property whether made as part of a sale and leaseback transaction to which we are a party or otherwise;
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indebtedness, obligations and liabilities of others in respect of which we are liable contingently or otherwise to pay or advance money or property or as guarantor, endorser or otherwise or which we have agreed to
purchase or otherwise acquire and indebtedness of partnerships and joint ventures that is included in our consolidated financial statements;
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reimbursement and other obligations relating to letters of credit, bankers’ acceptances and similar obligations;
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obligations under various hedging and similar arrangements and agreements, including interest rate and currency hedging agreements and swap and nonswap forward agreements;
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all our obligations issued or assumed as the deferred purchase price of property or services other than trade accounts payable and accrued liabilities arising in the ordinary course of business; and
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deferrals, renewals or extensions of any of the indebtedness or obligations described in the eight clauses above.
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However, “senior debt” excludes:
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any indebtedness, obligation or liability referred to in the nine clauses above as to which, in the instrument creating, governing or evidencing that indebtedness, obligation or liability, it is expressly provided that
such indebtedness, obligation or liability is not senior in right of payment to, is junior in right of payment to, or ranks equally in right of payment with, other specified types of indebtedness, obligations and liabilities of our Company,
including subordinated debt securities of one or more series;
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any indebtedness, obligation or liability that is subordinated to other of our indebtedness, obligations and liabilities to substantially the same extent as or to a greater extent than the subordinated debt securities
are subordinated; and
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the subordinated debt securities issued pursuant to the subordinated debt indenture and our outstanding junior subordinated indentures and, unless expressly provided in the terms thereof, any of our indebtedness to our
subsidiaries.
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As used above, the term “purchase-money obligations” means indebtedness, obligations evidenced
by a note, debenture, bond or other instrument, whether or not secured by a lien or other security interest issued to evidence the obligation to pay or a guarantee of the payment of, and any deferred obligation for the payment of, the purchase price
of property but excluding indebtedness or obligations for which recourse is limited to the property purchased, issued or assumed as all or a part of the consideration for the acquisition of property or services, whether by purchase, merger,
consolidation or otherwise, but does not include any trade accounts payable.
The applicable prospectus supplement and supplemental
indenture may further describe the provisions, if any, applicable to the subordination of the subordinated debt securities of a particular series. The applicable prospectus supplement will describe as of a recent date the approximate amount of our
senior debt outstanding as to which the subordinated debt securities of that series will be subordinated.
Structural Subordination
Because our Company is a holding company, our cash flows and consequent ability to service our obligations, including both our senior debt
securities and subordinated debt securities, are dependent on dividends, distributions and other payments of earnings and other funds by our subsidiaries, particularly Independent Bank, to us. The payment of dividends and other distributions by our
subsidiaries is contingent on their earnings and is subject to the requirements of federal banking regulations and other restrictions. For example, various banking laws applicable to Independent Bank limit the payment of dividends and other
distributions by Independent Bank to us, and may, therefore, limit our ability to pay accrued interest owing on our outstanding senior debt securities and subordinated debt securities on any interest payment date or the principal of such senior debt
securities and subordinated debt securities at their maturity. In addition, the debt securities will be structurally subordinated to all indebtedness and other liabilities of the our subsidiaries, because any right of our Company to receive any
assets of its subsidiaries upon their liquidation or reorganization, and the consequent right of the holders of the debt securities to participate in those assets, will be effectively subordinated to the claims of that subsidiary’s secured and
unsecured creditors. If our Company itself is recognized as a creditor of that subsidiary, our claims would still be subordinate to any security interest in the assets of that subsidiary and any indebtedness of that subsidiary senior to that held by
our Company. Claims from creditors (other than us) on our subsidiaries may include long-term and medium-term debt and substantial obligations related to deposit liabilities, federal funds purchased, securities sold under repurchase agreements, other
short-term borrowings and trade payables. Any capital loans that we make to Independent Bank would be subordinate in right of payment to deposits and to other indebtedness of Independent Bank.
Unsecured Obligations
Our senior debt
securities and subordinated debt securities will be unsecured.
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Conversion or Exchange of Debt Securities
The applicable prospectus supplement will describe the terms, if any, on which a series of debt securities may be converted into or exchanged
for other of our securities. These terms will include whether conversion or exchange will be mandatory, at our option or at the option of the holder. We will also describe in the applicable prospectus supplement relating to any such convertible or
exchangeable debt securities how we will calculate the amount or number of our other securities that holders of debt securities would receive if they were to convert or exchange their debt securities, the conversion price or exchange ratio and other
terms related to conversion or exchange and any antidilution protections.
Redemption of Securities
We may redeem the debt securities, in whole or in part, at the prescribed redemption price, at the times and on the terms described in the
applicable prospectus supplement. If we exercise that redemption option, we will notify the trustee and the registrar of the redemption date and of the principal amount of debt securities of the series to be redeemed.
Notice of redemption will be given to each holder of the debt securities to be redeemed at their addresses, as shown on the security register,
at least 60 days prior to the date set for such redemption. The notice will set forth: the redemption date; the price at which the debt securities will be redeemed; if less than all of the outstanding debt securities of such series are to be
redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the particular debt securities to be redeemed; the place or places where such debt securities maturing after the redemption date are to be
surrendered for payment of the price at which such debt securities will be redeemed; and the CUSIP number applicable to the debt securities to be redeemed.
At or prior to the opening of business on the redemption date, we will deposit or cause to be deposited with the trustee or with a paying
agent (or, if we are acting as our own paying agent with respect to the debt securities being redeemed, we will segregate and hold in trust as provided in the indenture) an amount of money sufficient to pay the aggregate redemption price of all of
the debt securities or the part thereof to be redeemed on that date. On the redemption date, the price at which the debt securities will be redeemed will become due and payable upon all of the debt securities to be redeemed, and interest, if any, on
the debt securities to be redeemed will cease to accrue on and after that date. Upon surrender of any such debt securities for redemption, we will pay those debt securities surrendered at the price set for such redemption.
If we elect to redeem debt securities, we will be required to notify the trustee of the aggregate principal amount of debt securities to be
redeemed and the redemption date. If fewer than all the debt securities are to be redeemed, the trustee is required to select the debt securities to be redeemed proportionately, by lot or in a manner it deems fair and appropriate or as required by
law. Any of the debt securities to be redeemed only in part must be surrendered at the office or agency established by us for such purpose, and we will execute, and the trustee will authenticate and deliver to you without service charge, new debt
securities of the same series, containing identical terms and conditions, of any authorized denominations as requested by you, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the debt securities you surrender.
Payment and Paying and Transfer Agent
We will make all payments of principal of and premium, if any, and interest on the debt securities of each series offered pursuant to this
prospectus to the depository for the debt securities of that series, which will be The Depository Trust Company, or DTC, for so long as those debt securities remain in book-entry form. If certificated securities are issued as to the debt securities
of any series, we will pay the principal of and the premium, if any, and interest on those debt securities by wire transfer in accordance with the instructions given to us by the holders of those debt securities. Except as otherwise noted below, all
other payments with respect to certificated debt securities will be made at the office or agency of the paying agent within Dallas, Texas unless we elect to make interest payments by check mailed to the holders at their address set forth in the
register of holders.
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Under the terms of the indentures, we and the trustee will treat the registered holder of such
debt securities (i.e., DTC (or its nominee)) as the owner thereof for all purposes, including the right to receive payments and for all other purposes. Consequently, neither we nor the trustee or any of our respective agents has or will have any
responsibility or liability for:
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any aspects of the records of DTC or any direct or indirect participant therein relating to or payments made on account of any such debt securities, any such payments made by DTC or any direct or indirect participant
therein, or maintaining, supervising or reviewing the records of DTC or any direct or indirect participant therein relating to or payments made on account of any such debt securities; or
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DTC or any direct or indirect participant therein. Payments by participants to the beneficial owners of our debt securities held through participants are the responsibility of such participants, as is now the case with
securities held for the accounts of customers registered in “street name.”
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We will maintain an office or agency
in Dallas, Texas, where debt securities of each series may be presented for registration of transfer or for exchange and an office or agency where such debt securities may be presented and surrendered for payment. Wells Fargo Bank, National
Association, the trustee under the indentures, will also be the registrar and paying agent for the debt securities of each series unless it resigns from such position or it is otherwise replaced in such capacities as provided in the applicable
indentures. Holders will not have to pay any service charge for any registration of transfer or exchange of debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with such
registration of transfer.
Same-Day Settlement
The debt securities will trade in the same-day funds settlement system in the United States until maturity. Purchases of debt securities in
secondary market trading must be settled in immediately available funds. See “Book Entry Issuance.”
Denomination, Payment, Registration
and Transfer
Unless otherwise specified in the applicable prospectus supplement, we will issue the debt securities of a series in
denominations of $1,000 or integral multiples of $1,000.
Unless otherwise specified in the applicable prospectus supplement, we will pay
the principal of, and applicable premium, if any, and interest on the debt securities of any series at the corporate trust office of the trustee, the address of which will be stated in the applicable prospectus supplement. At our option, we may pay
interest by check mailed to the address of the person entitled to the interest payment as it appears in the register for the applicable debt securities or by wire transfer of funds to that person at an account maintained within the United States.
Any defaulted interest, which means interest not punctually paid or duly provided for on any interest payment date with respect to a debt
security, will immediately cease to be payable to the registered holder on the applicable regular record date by virtue of his having been the registered holder on such date. We may pay defaulted interest either to the person in whose name the debt
security is registered at the close of business on a special record date for the payment of the defaulted interest to be fixed by the trustee, notice of which is to be given to the holder of the debt security not less than ten days before the
special record date, or at any time in any other lawful manner, all as more completely described in the indenture or supplemental indenture.
Subject to limitations imposed upon debt securities issued in book-entry form, the holder may exchange debt securities of any series for other
debt securities of the same series and of a like aggregate principal amount and tenor but in different, authorized denominations upon surrender of the debt securities at the corporate trust office of the applicable trustee. In addition, subject to
limitations imposed upon debt securities issued in book-entry form, the holder may surrender debt securities of any series for registration of transfer or exchange at the corporate trust office of the applicable trustee. Every debt security
surrendered for registration of transfer or exchange must be duly endorsed or accompanied by a written instrument of transfer. No service charge will be imposed for any registration
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of transfer or exchange of any debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with any registration of
transfer or exchange of any debt securities. If the applicable prospectus supplement refers to any transfer agent in addition to the applicable trustee, which additional transfer agent is initially designated by us with respect to any series of debt
securities, we may at any time rescind the designation of that transfer agent or approve a change in the location through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for that
series of debt securities. We may at any time designate additional transfer agents with respect to any series of debt securities.
If we
redeem the debt securities of any series, neither we nor any trustee will be required to:
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issue, register the transfer of, or exchange debt securities of any series during a period beginning at the opening of business 15 days before any selection of debt securities of that series to be redeemed and ending at
the close of business on the day of mailing of the relevant notice of redemption;
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register the transfer of, or exchange any debt security, or portion of any debt security, called for redemption, except the unredeemed portion of any debt security being redeemed in part; or
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issue, register the transfer of, or exchange any debt security that has been surrendered for repayment at the option of the holder, except the portion, if any, of the debt security not to be repaid.
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Global Securities
We may issue
the debt securities of a series in whole or in part in the form of one or more global securities to be deposited with, or on behalf of, a depository or with a nominee for a depository identified in the applicable prospectus supplement relating to
that series. We will issue global securities in registered form and in either temporary or permanent form. The specific terms of the depository arrangement with respect to a series of debt securities will be described in the prospectus supplement
relating to that series.
Our obligations with respect to the debt securities of any series, as well as the obligations of the applicable
trustee with respect to the debt securities of such series, run only to persons who are registered holders of debt securities. For example, once we make payment to the registered holder, we have no further responsibility for that payment even if the
recipient is legally required to pass the payment along to an individual investor but fails to do so. As an indirect holder, an investor’s rights relating to a global security will be governed by the account rules of the investor’s
financial institution and of the depositary and/or participant of the depositary, as well as general laws relating to transfers of debt securities.
An investor should be aware that when debt securities are issued in the form of global securities:
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the investor cannot have a note or certificate representing his or her debt securities registered in his or her own name;
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the investor cannot receive physical certificates for his or her debt securities unless the conditions for issuance of physical certification are met;
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the investor must look to his or her bank or brokerage firm or related DTC participant for payments on the debt securities and protection of his or her legal rights relating to the debt securities;
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the investor may not be able to sell interests in the debt securities to some insurance or other institutions that are required by law to hold the physical certificates of debt that they own;
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the depositary’s policies will govern payments, transfers, exchanges and other matters relating to the investor’s interest in the global security; and
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the depositary will usually require that interests in a global security be purchased or sold within its system and settled using same-day funds.
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The prospectus supplement for a series of debt securities will list the special situations, if
any, in which a global security will be exchanged for physical certificates representing debt securities represented by the global securities. After that exchange, the investor may choose whether to hold debt securities directly or indirectly
through an account at the investor’s bank or brokerage firm. In that event, investors must consult their banks or brokers to find out how to have their interests in debt securities transferred to their own names so that they may become direct
holders. When a global security is exchanged for physical certificates, the depositary, and not us or one of the trustees, is responsible for deciding the names of the institutions that will be the initial direct holders of the debt securities
represented by the global security.
Merger, Consolidation or Sale of Assets
We will not be permitted to consolidate with or merge into any other entity, or sell, lease, transfer or convey all or substantially all of our
properties and assets, either in one transaction or a series of transactions, to any other entity and no other entity will consolidate with or merge into us, or sell, lease, transfer or convey all or substantially all of its properties and assets to
us unless:
(1) either:
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our Company is the continuing entity; or
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the successor entity, if other than our Company, formed by or resulting from any consolidation or merger, or which has received the transfer of our properties and assets, expressly assumes payment of the principal of,
and premium, if any, and interest on all of the outstanding debt securities and the due and punctual performance and observance of all of the covenants and conditions contained in the indenture; and
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(2) immediately after giving effect to the transaction and treating any indebtedness that becomes our obligation as a result of that
transaction as having been incurred by us at the time of the transaction, no event of default under the applicable indenture, and no event which, after notice, the lapse of time or both, would become an event of default will have occurred and be
continuing.
The conditions described in (1) and (2) above would not apply to the direct or indirect transfer of the stock,
assets or liabilities of any of our subsidiaries to another of our direct or indirect subsidiaries.
Except as provided in this prospectus
or as may otherwise be provided in the applicable prospectus supplement, the indenture and the terms of the debt securities will not contain any event risk or similar covenants that are intended to afford protection to holders of any debt securities
in the event of a merger, a highly leveraged transaction or other significant corporate event involving us or our subsidiaries, whether or not resulting in a change of control, which may adversely affect holders of the debt securities.
Additional Covenants and/or Modifications to the Covenant Described Above
Any covenants of our Company in addition to, and/or modifications to, the covenant relating to mergers, consolidations and sales of assets
described above with respect to any series of debt securities, including any covenants relating to limitations on incurrence of indebtedness or incurrence of liens or any affirmative covenants, other negative covenants or financial covenants, will
be set forth in the indenture and described in the prospectus supplement relating to that series of debt securities.
Unless the
applicable prospectus supplement indicates otherwise, the indentures do not contain a restrictive covenant on the incurrence of debt of the type described above, nor do they contain any other provision which restricts us from, among other things:
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incurring or becoming liable on any secured or unsecured senior or subordinated indebtedness or general obligations; or
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paying dividends or making other distributions on our capital stock; or
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purchasing or redeeming our capital stock; or
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creating any liens on our property for any purpose.
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Events of Default; Right to Accelerate
Senior Debt Securities
. Under the senior debt indenture, but subject to any modifications or deletions provided in any
supplemental indenture or board resolution or board resolution and related officers’ certificate with respect to or establishing the terms and conditions of the senior debt securities of any specific series, an event of default will occur with
respect to the senior debt securities upon the occurrence of any of the following events:
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failure to pay any installment of interest payable on any senior debt security of the series for 30 days;
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failure to pay principal of, or premium, if any, on, any senior debt security of the series when due, whether at maturity, upon redemption, by declaration of acceleration of maturity or otherwise;
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default in making any sinking fund payment when due, for any senior debt security of the series;
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default in the performance or breach of any other covenant or warranty of our Company contained in the senior debt indenture, other than a covenant added to the senior debt indenture solely for the benefit of any other
series of senior debt securities issued under that senior debt indenture, continuing for 90 days after written notice as provided in the senior debt indenture;
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the entry by a court having proper jurisdiction of a decree or order for relief in respect of us (or, in each case, any significant subsidiary of ours) in an involuntary case or proceeding under any bankruptcy,
insolvency, reorganization or similar law or adjudging us bankrupt or insolvent or approving as properly filed a petition seeking our reorganization, arrangement, adjustment or composition or appointing a custodian, receiver, liquidator, assignee,
trustee or similar official for us or of any substantial part of our property, or ordering our winding up or liquidation and such decree or order shall have continued unstayed and in effect for a period of 60 consecutive days;
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if we (or, in each case, any significant subsidiary of ours) commence a voluntary case or proceeding under any bankruptcy, insolvency, reorganization law or to be adjudicated a bankrupt or insolvent, or we consent to
the entry of a decree or order for relief in an involuntary case or proceeding under any bankruptcy, insolvency, reorganization or similar law, to the commencing of any bankruptcy or insolvency case or proceeding or to the filing of any petition or
appointment of, or taking possession by, a custodian, receiver, liquidator, assignee, trustee or similar official for us or of any substantial part of our property or any assignment for the benefit of our creditors or our taking of any action in
furtherance of such action;
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default in the delivery of any shares of common stock or other securities or property when required to be delivered upon the conversion of, or the exchange of, any senior debt securities of a series and that default
continues for a period of 10 days; or
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any other event of default as is described in the prospectus supplement relating to any series of senior debt securities being offered for sale.
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If any bankruptcy or insolvency-related event of default described above occurs, the principal amount and interest on the senior debt
securities will become immediately due and payable, subject to the broad equity powers of a federal bankruptcy court and the determination by that court of the nature and status of the payment claims of the holders of the senior debt securities. If
any other event of default described above or established as a term of the senior debt securities of a series occurs and is continuing, the senior debt trustee or the holders of 25% of the aggregate principal amount of the outstanding senior debt
securities of that series may accelerate the maturity of the outstanding senior debt securities of that series and declare the principal of and accrued and unpaid interest on such senior debt securities to be immediately due and payable. Upon such a
declaration, the principal of (or such lesser amount as may be provided for in the terms of the senior debt securities of that series) and all accrued and unpaid interest on such senior debt securities will become immediately due and payable upon
notice of such declaration being given in writing to our Company and, if the acceleration is by the holders, the senior debt trustee. At any time after a declaration of acceleration with respect to the senior debt securities of a series has been
made, but before a judgment or decree for payment of the money due has been obtained, the holders of a majority in principal amount of outstanding senior debt securities of that series may rescind and annul the consequences of the event of default,
but only if certain conditions have been satisfied.
Subordinated Debt Securities
. Under the subordinated debt indenture, but
subject to any modifications or deletions provided in any supplemental indenture or board resolution or board resolution and related officers’ certificate with respect to any specific series of subordinated debt securities, an event of default
will occur with respect to the subordinated debt securities upon the occurrence of any of the following events:
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failure to pay any installment of interest payable on any subordinated debt security of the series for 30 days;
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failure to pay principal of, or premium, if any, on, any subordinated debt security of the series when due, whether at maturity, upon redemption, by declaration of acceleration of maturity or otherwise;
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default in making any sinking fund payment when due, for any subordinated debt security of the series;
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default in the performance or breach of any other covenant or warranty of our Company contained in the subordinated debt indenture, other than a covenant added to the subordinated debt indenture solely for the benefit
of any other series of subordinated debt securities issued under that subordinated debt indenture, continuing for 90 days after written notice as provided in the subordinated debt indenture;
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the entry of a decree or order for relief in respect of our Company by a court having jurisdiction in the premises in an involuntary proceeding under Chapter 7 (liquidation) or Chapter 11 (reorganization) of the U.S.
Bankruptcy Code as now or hereafter in effect, and such decree or order shall have continued unstayed and in effect for a period of 60 consecutive days;
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if we commence a bankruptcy or insolvency proceeding or consent to the entry of an order in an involuntary proceeding under Chapter 7 (liquidation) or Chapter 11 (reorganization) of the U.S. Bankruptcy Code as now or
hereafter in effect; or
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such other events of default as are described in the prospectus supplement relating to any series of subordinated debt securities being offered for sale.
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If an event of default based on the entry of a decree or order for relief in a bankruptcy or insolvency proceeding or the commencement by us
of a bankruptcy or insolvency proceeding or our consent to the entry of an order in an involuntary bankruptcy or insolvency proceeding that adjudicates us as being insolvent occurs, the principal amount and interest on the subordinated debt
securities shall become immediately due and payable, subject to the broad equity powers of a federal bankruptcy court and the determination by that court of the nature and status of the payment claims of the holders of the subordinated debt
securities. Unless the terms of the subordinated debt securities of a series provide otherwise, if any non-insolvency event of default described above or established as a term of the subordinated debt securities of a series occurs and is continuing,
the subordinated debt trustee or the holders of 25% of the aggregate principal amount of the outstanding subordinated debt securities of that series may accelerate the maturity of the outstanding subordinated debt securities of that series and
declare the principal of and accrued and unpaid interest on such subordinated debt securities to be immediately due and payable. Upon such a declaration, the principal of (or such lesser amount as may be provided for in the terms of the senior debt
securities of that series) and all accrued and unpaid interest on such subordinated debt securities will become immediately due and payable upon notice of such declaration being given in writing to our Company and, if the acceleration is by the
holders, the subordinated debt trustee. At any time after a declaration of acceleration with respect to the subordinated debt securities of a series has been made, but before a judgment or decree for payment of the money due has been obtained, the
holders of a majority in principal amount of outstanding subordinated debt securities of that series may rescind and annul the consequences of the event of default, but only if certain conditions have been satisfied.
We may offer subordinated debt securities of a series that we intend to qualify as “Tier 2 capital” under the federal
regulatory rules and guidelines for bank holding company capital. For such subordinated debt securities to so qualify as “Tier 2 capital,” the maturity of such subordinated debt securities may not be accelerated upon the occurrence and
continuation of an event of default unless the event of default is one based on the entry of a decree or order for relief in a bankruptcy or insolvency proceeding or the commencement by us of a bankruptcy or insolvency proceeding or our consent to
the entry of an order in an involuntary bankruptcy or insolvency proceeding as discussed above. Notwithstanding the discussion appearing above of the rights of the subordinated debt trustee or holders of subordinated debt securities to accelerate
the maturity of such subordinated debt securities upon the occurrence of a non-insolvency event of default, the terms of the subordinated debt securities of a series intended to qualify as “Tier 2 capital” will expressly limit the rights
of the subordinated debt trustee and the holders of the subordinated debt securities of such series to declare an acceleration of the maturity of such subordinated debt securities upon the occurrence of a non-insolvency default and such limitation
will be described in any prospectus supplement by which we offer subordinated debt securities of that series for sale.
As a consequence of that limitation, with respect to our subordinated debt securities of a series intended to qualify as
“Tier 2 capital,” neither the trustee nor the holders of the subordinated debt securities of any series or any group of holders of any portion of the outstanding subordinated debt securities of one or more series will have the right to
accelerate the subordinated debt securities of any series in the event of a default in the payment of
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principal of, or premium, if any, or interest on, the subordinated debt securities of that series or as a result of our nonperformance of any other covenant applicable to or obligation arising
under the terms of the subordinated debt securities of that series or the subordinated debt indenture.
If we default in our obligation to pay any interest on the subordinated debt securities when due and payable and such default continues for a
period of 30 days, or if we default in our obligation to pay the principal amount due upon maturity, or if we breach any covenant or agreement contained in the subordinated debt indenture and that default continues for any grace period, then the
subordinated debt trustee may, subject to certain limitations and conditions, seek to enforce its rights and the rights of the holders of subordinated debt securities of the performance of any covenant or agreement in the indenture. As a result of
such limitations on the rights and remedies of the holders of subordinated debt securities of a series intended to qualify as “Tier 2 capital”, the holders of our senior debt securities, holders of our other senior indebtedness,
holders of our subordinated debt securities of a series not intended to qualify as “Tier 2 capital” and our general creditors would be able to act to recover amounts owing to them prior to the holders of our subordinated debt
securities.
Collection of Indebtedness
If an event of default relating to our failure to pay interest or principal, to make a sinking fund or analogous payment occurs with respect to
the debt securities of a series issued under an indenture, we must pay to the applicable trustee for the benefit of the holders of the affected debt securities the amount of the principal of, and premium, if any, and accrued and unpaid interest on,
such debt securities and, to the extent legally enforceable, interest on any such overdue amounts at the rate determined as prescribed in the terms of such debt securities. If we fail to pay such amounts, the applicable trustee may institute a suit
against us to collect the amounts due and payable. If the debt securities as to which such a failure of payment occurs are subordinated debt securities intended to qualify as “Tier 2 capital,” the amounts we would be required to pay to the
subordinated debt trustee upon such a failure of payment or performance would not include any principal, premium or interest that would not be due without the maturity of such subordinated debt securities being accelerated.
Trustee Action
The indentures
provide that, subject to the duty of the trustee upon the occurrence of an event of default to act with the required standard of care, the trustee will be under no obligation to exercise any of its rights or powers under the applicable indenture at
the request or direction of any of the holders of debt securities unless such holders shall have offered to the trustee indemnity or security reasonably satisfactory to the trustee against the costs, expenses and liabilities that may be incurred by
it in complying with such request or direction. Subject to certain provisions, the holders of a majority in principal amount of the outstanding debt securities of the affected series will have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the subject debt securities.
Limitations on Suits by Holders
No holder of debt securities shall have any right to institute any proceeding, judicial or otherwise, with respect to the indentures, or for
the appointment of a receiver or trustee, or for any other remedy under the indentures, unless:
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such holder has previously given written notice to the trustee of a continuing event of default with respect to the applicable debt securities;
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the holders of not less than 25% in principal amount of the applicable debt securities shall have made written request to the trustee to institute proceedings in respect of such event of default in its own name as
trustee under the applicable indenture;
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such holder or holders have offered to the trustee reasonable security or indemnity against the costs, expenses, and liabilities to be incurred in complying with such request;
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the trustee for 60 days after its receipt of such notice, request, and offer of security or indemnity has failed to institute any such proceeding; and
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no direction inconsistent with such written request has been given to the trustee during such 60-day period by the holders of a majority in principal amount of the outstanding debt securities.
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In any event, the applicable indenture provides that no one or more of such holders of the debt securities of a series will have any right
under such indenture to affect, disturb or prejudice the rights of any other holder of debt securities of any series issued under such indenture, or to obtain priority or preference over any of the other holders or to enforce any right under such
indenture, except in the manner provided in the indenture and for the equal and ratable benefit of all holders of debt securities issued under that indenture.
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Waiver
Each indenture provides that the holders of not less than a majority in principal amount of the outstanding debt securities of any series
issued under that indenture may waive any past default with respect to that series and its consequences, except a default:
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in the payment of the principal of, or premium, if any, or interest on any debt security of that series, or
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in respect of a covenant or provision contained in that indenture that, by the terms of the indenture, cannot be modified or amended without the consent of each affected holder of an outstanding debt security.
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Notice
The
trustee will be required to give notice to the holders of the applicable debt securities within 90 days of a default under the applicable indenture unless the default has been cured or waived; but the trustee may withhold notice of any default,
except a default in the payment of the principal of, or premium, if any, or interest on the debt securities or in the payment of any sinking fund installment in respect of the debt securities, if specified responsible officers of the trustee
consider the withholding to be in the interest of the holders.
The holders of debt securities of any series may not institute any
proceedings, judicial or otherwise, with respect to the applicable indenture or for any remedy under such indenture, except in the case of failure of the applicable trustee, for 60 days, to act after the trustee has received a written request to
institute proceedings in respect of an event of default from the holders of not less than 25% in principal amount of the outstanding debt securities of that series, as well as an offer of indemnity reasonably satisfactory to the trustee, and
provided that no direction inconsistent with such written request has been given to the trustee during such
60-day
period by the holders of a majority of the outstanding debt securities of that series.
However, any holder of debt securities is not prohibited from instituting suit for the enforcement of payment of the principal of, and premium, if any, and interest on the debt securities at their respective due dates.
Subject to the trustee’s duties in case of default, no trustee will be under any obligation to exercise any of its rights or powers under
the indenture at the request or direction of any holders of debt securities of a series then outstanding under the applicable indenture unless the holders offer to the trustee reasonable security or indemnity. Subject to such provisions for the
indemnification of the trustee, the holders of not less than a majority in principal amount of the outstanding debt securities of any series issued under the indenture, or of all subordinated debt securities then outstanding under the indenture, as
the case may be, will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the applicable trustee or of the applicable trustee exercising any trust or power conferred upon the trustee. A
trustee may refuse, however, to follow any direction that is in conflict with any law or the indenture that may involve the trustee in personal liability or may be unduly prejudicial to the holders of debt securities of that series not joining in
the direction.
Within 180 days after the end of each fiscal year, we will be required to deliver to each trustee a certificate, signed by
one of several specified officers, stating whether or not that officer has knowledge of any default under the indenture and, if so, specifying each default and the nature and status of the default.
Modification of an Indenture
Except as
otherwise specifically provided in the applicable indenture, with the consent of the holders of not less than a majority in principal amount of all outstanding debt securities issued under the indenture that are affected by the modification or
amendment, we may enter into supplemental indentures with the trustee 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 debt securities issued under the indenture. However, no modification or amendment may, without the consent of the holder of each debt security affected by the modification or amendment:
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except as described in the prospectus supplement relating to such debt security:
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extend the stated maturity of the principal of, or any installment of interest, or the premium, if any, on, any debt security;
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reduce the principal amount of, or the rate at which interest accrues under, amount of interest on, or change the manner of calculating the rate, or any premium payable on redemption of, any debt security, or reduce the
amount of principal of an original issue discount security that would be due and payable upon declaration of acceleration of its maturity or would be provable in bankruptcy, or adversely affect any right of repayment of the holder of any debt
security;
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extend the time of payment of interest on any debt security;
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change any of the conversion, exchange or redemption provisions of any debt security;
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change the place of payment, or the coin or currency for payment, of principal of, or premium, if any, including any amount in respect of original issue discount or interest on any debt security;
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impair the right to institute suit for the enforcement of any payment on or with respect to any debt security or for the conversion or exchange of any debt security in accordance with its terms;
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modify the ranking or priority of the securities;
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reduce the percentage of outstanding debt securities of any series necessary to modify or amend the indenture, to waive compliance with specific provisions of or certain defaults and consequences under the indenture, or
to reduce the quorum or voting requirements set forth in the indenture; or
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modify any of the provisions relating to the waiver of specific past defaults or compliance with specific covenants, except to increase the required percentage to effect that action or to provide that specific other
provisions may not be modified or waived without the consent of the holder of that debt security.
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The holders of not less
than a majority in principal amount of the outstanding debt securities of each series affected by any such modification or amendment will have the right to waive our compliance with specific covenants in the indenture.
We and the trustee may modify and amend the applicable indenture without the consent of the holders of debt securities for any of the
following purposes:
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to evidence the succession of another person to us as obligor under the indenture;
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to add to our covenants for the benefit of the holders of all or any series of debt securities issued under the indenture or to surrender any right or power conferred upon us in the indenture;
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to add events of default for the benefit of the holders of all or any series of debt securities issued under the indenture;
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to add or change any provisions of the indenture to permit or facilitate the issuance of debt securities in uncertificated form issued under the indenture, provided that the action will not adversely affect the
interests of the holders of the debt securities of any series in any material respect;
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to change or eliminate any provision of the indenture, if the change or elimination becomes effective only when there are no debt securities outstanding of any series created thereunder prior to the change or
elimination that are entitled to the benefit of the changed or eliminated provision;
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to secure the debt securities of any series issued under the indenture;
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to establish the form or terms of debt securities of any series to be issued under the indenture;
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to provide for the acceptance of appointment by a successor trustee or facilitate the administration of the trusts under the indenture by more than one trustee;
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to cure any ambiguity or correct any inconsistency in the indenture provided that the cure or correction does not adversely affect the holders of the debt securities issued under the indenture;
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to supplement any of the provisions of the indenture to the extent necessary to permit or facilitate defeasance and discharge of any series of debt securities issued under the indenture, provided that the supplemental
indenture does not adversely affect the interests of the holders of the debt securities of any series issued under the indenture in any material respect;
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to make provisions with respect to the conversion or exchange terms and conditions applicable to the debt securities of any series issued under the indenture;
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to add to, delete from or revise the conditions, limitations or restrictions on issue, authentication and delivery of debt securities to be issued under the indenture in the future;
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to conform any provision in the indenture to the requirements of the Trust Indenture Act;
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to make any change that does not adversely affect the legal rights under the indenture of any holder of debt securities of any series issued under the indenture, or
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in the case of any subordinated debt security, to make any change in the subordinated provisions that limits or terminates the benefits applicable to the holder of any senior debt.
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In determining whether the holders of the requisite principal amount of outstanding debt securities of a series have given any request,
demand, authorization, direction, notice, consent or waiver under the indenture governing such series of debt securities or whether a quorum is present at a meeting of holders of debt securities of such series:
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the principal amount of an original issue discount security that is deemed to be outstanding will be the amount of the principal of that original issue discount security that would be due and payable as of the date of
the determination upon declaration of acceleration of the maturity of that original issue discount security;
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the principal amount of an indexed security that is deemed outstanding will be the principal face amount of the indexed security at original issuance, unless otherwise provided with respect to the indexed security under
the indenture; and
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debt securities owned by us or any other obligor upon the debt securities or any affiliate of us or of any other obligor will be disregarded.
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Discharge, Defeasance and Covenant Defeasance
Discharge
We are permitted under each
indenture to discharge specific obligations to holders of any series of debt securities issued under the indenture (1) that have not already been delivered to the applicable trustee for cancellation and (2) that either have become due and
payable or will, within one year, become due and payable or scheduled for redemption, by irrevocably depositing with the applicable trustee, in trust, money or funds certified to be sufficient to pay when due, whether at maturity, upon redemption or
otherwise, the principal of, and premium, if any, on and interest on the debt securities of one or more series.
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Defeasance and Covenant Defeasance
If the provisions in an indenture relating to defeasance and covenant defeasance are made applicable to the debt securities of any series
issued under that indenture, we may elect either:
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defeasance, which means we elect to defease and be discharged from any and all obligations with respect to the debt securities of a series, except for the obligations to register the transfer or exchange of the debt
securities, to replace temporary or mutilated, destroyed, lost or stolen debt securities, to maintain an office or agency in respect of the debt securities and to hold moneys for payment in trust; or
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covenant defeasance, which means we elect to be released from our obligations with respect to the debt securities under specified sections of the indenture relating to covenants, as described in the applicable
prospectus supplement and any omission to comply with our obligations will not constitute an event of default with respect to the debt securities being defeased; in either case upon the irrevocable deposit by us with the applicable trustee, in
trust, of an amount, in currency or government obligations, or both, sufficient without reinvestment to make scheduled payments of the principal of, and premium, if any, and interest on such debt securities, when due, whether at maturity, upon
redemption or otherwise, and any mandatory sinking fund or analogous payments.
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A trust will only be permitted to be
established under an indenture if, among other things:
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we have delivered to the applicable trustee an opinion of counsel, as specified in the applicable indenture, to the effect that the holders of the debt securities being defeased will not recognize income, gain or loss
for federal income tax purposes as a result of the defeasance or covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the defeasance or covenant
defeasance had not occurred, and the opinion of counsel, in the case of defeasance, will be required to refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable U.S. federal income tax law occurring after the
date of the indenture;
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no event of default or any event which after notice or lapse of time or both would be an event of default has occurred and is continuing;
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the defeasance or covenant defeasance will not result in a breach or violation of, or constitute an event of default under, the indenture, any senior debt or any other material agreement or instrument to which the
Company is a party or by which it is bound;
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certain other provisions set forth in the applicable indenture are met;
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we will have delivered to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent to the defeasance or covenant defeasance have been complied with; and
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in the case of the subordinated debt indenture, no event or condition will exist that, pursuant to certain provisions described under “—Ranking—Subordinated Debt Securities,” would prevent the
Company from making payments of principal of and premium, if any, and interest on the subordinated debt securities being defeased at the date of the irrevocable deposit referred to above.
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In general, if we elect covenant defeasance with respect to any debt securities and payments on those debt securities are declared due and
payable because of the occurrence of an event of default, the amount of money and/or government obligations on deposit with the applicable trustee would be sufficient to pay amounts due on those debt securities at the time of their stated maturity,
but may not be sufficient to pay amounts due on those debt securities at the time of the acceleration resulting from the event of default. In that case, we would remain liable to make payment of the amounts due on the debt securities at the time of
acceleration.
In the event we properly discharge and satisfy or effect a defeasance or covenant defeasance with respect to any
subordinated debt securities, the subordination provisions of those subordinated debt securities will cease to cause those subordinated debt securities to be subordinate in right of payment to the payment in full of the senior indebtedness as
defined for purposes of those subordinated debt securities. In such a circumstance, the funds or government obligations deposited in trust with the applicable trustee in connection with such discharge and satisfaction, defeasance or covenant
defeasance may be applied to the payment of the principal of, and premium, if any, and interest on, the subordinated debt securities discharged and satisfied or the subject of defeasance or covenant defeasance prior to any or all of the senior
indebtedness being paid in full.
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A prospectus supplement by which we offer for sale debt securities of a particular series may
further describe the provisions, if any, permitting defeasance or covenant defeasance, including any modifications to the provisions described above, with respect to the debt securities of or within such particular series.
Regarding the Trustee
Wells Fargo
Bank, National Association, is the trustee under the indentures and, unless otherwise provided in a prospectus supplement relating to the offer of debt securities of a particular series, will also initially be the registrar and paying agent for each
series of debt securities offered and sold pursuant to this prospectus. The trustee is a national banking association with offices in Dallas, Texas. From time to time, we may enter into banking or other relationships with the trustee or its
affiliates.
The trustee has two main roles under the indentures. First, the trustee can enforce your rights against us if an event of
default occurs with respect to any debt securities. See “—Events of Default; Limitations on Suits” and “—Notice” for certain information regarding the rights of the trustee upon the occurrence of an event of default.
Second, the trustee performs certain administrative duties related to the debt securities of each series for us. The trustee is entitled, subject to the duty of the trustee during a default to act with the required standard of care, to be
indemnified by the holders of the debt securities before proceeding to exercise any right or power under the applicable indenture at the request of those holders.
The trustee may resign or be removed as the trustee under an indenture, and a successor trustee may be appointed by us or by the holders
holding a majority in principal amount of the debt securities outstanding under the applicable indenture to act with respect to all of the debt securities outstanding under the applicable indenture. If the trustee resigns or is removed as trustee
under one of the indentures, it may continue to serve as the trustee under the other indenture unless it resigns or is removed as trustee under the other indenture as described above.
If two or more persons are acting as trustee with respect to different series of debt securities, each trustee will be a trustee of a trust
under that indenture separate from the trust administered by any other such trustee as to a separate series of debt securities issued under that indenture. Except as otherwise indicated in this prospectus or the applicable prospectus supplement, a
trustee may only take an action with respect to the debt securities of the particular series of debt securities for which it is trustee under an indenture.
Governing Law
The debt securities
of each series and the indenture will be governed by, and construed in accordance with, the internal laws of the State of Texas.
DESCRIPTION OF COMMON STOCK
General
The following summarizes some of the important rights of the holders of shares of our common stock. This discussion does not purport to be a
complete description of these rights. These rights can be determined in full only by reference to federal and state banking laws and regulations, the Texas Business Organizations Code, or the TBOC, and our certificate of formation and bylaws.
Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred
stock, par value $0.01 per share. As of June 20, 2014, we had 16,370,707 outstanding shares of our common stock and 23,938.35 shares of our Series A preferred stock were outstanding. All of our shares outstanding at that date were fully
paid and nonassessable. As of June 20, 2014, we had 467 holders of record of common stock and one holder of record of our Series A preferred stock.
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You should refer to the prospectus supplement relating to the shares of our common stock being
offered for sale for the number of shares of our common stock being offered and the price per share to the public at which such shares of common stock are being offered.
Voting Rights
Holders of our
common stock are entitled to one vote per share in the election of directors and on all other matters submitted to a vote at a meeting of shareholders. No shareholder has the right of cumulative voting with respect to the election of directors.
At each meeting of the shareholders at which a quorum is present or represented, all corporate actions to be taken by vote of the shareholders
shall be authorized by a majority of the votes cast by the shareholders entitled to vote thereon, present in person or represented by proxy at such meeting, and where a separate vote by class is required, a majority of the votes cast by the
shareholders of such class, present in person or represented by proxy at such meeting, shall be the act of such class, unless, in each case, as otherwise required by law and except as otherwise provided in the certificate of formation or the bylaws.
In any election of directors, the persons receiving a plurality of the votes cast, up to the number of directors to be elected in such
election, will be deemed elected. Our certificate of formation establishes a classified board of directors, with directors of each class serving a three-year term.
Unless otherwise agreed by two-thirds of the entire board of directors, any “fundamental action,” such as an amendment of our
certificate of formation, a voluntary winding up under the Bankruptcy Code, a revocation of a voluntary decision to wind up, a cancellation of an event requiring winding up or a reinstatement after termination of our existence, or any
“fundamental business transaction,” such as a merger, interest exchange, conversion or sale of all or substantially all of our assets, requires, in addition to any voting requirement of the TBOC, the vote of at least (i) two-thirds of
the outstanding shares of any class entitled to vote on the fundamental action as a class by the terms of the certificate of formation and/or the bylaws and (ii) two-thirds of the outstanding shares of capital stock of all classes and series of
capital stock entitled to vote generally in an election of directors. Such affirmative vote will be in lieu of any lesser vote otherwise provided by law or any agreement or contract to which we are a party, and shall be in addition to any class vote
to which any class of our stock may be entitled by law.
Dividend Rights and Distributions
Holders of our common stock are entitled to dividends when, as and if declared by our board of directors out of funds legally available
therefor. We currently expect to continue to pay (when, as and if declared by our board of directors out of funds legally available for that purpose and subject to regulatory restrictions) regular quarterly cash dividends on our common stock;
however, there can be no assurance that we will continue to pay dividends in the future. Future dividends on our common stock will depend upon our earnings and financial condition, liquidity and capital requirements, the general economic and
regulatory climate, our ability to service any equity or debt obligations senior to the common stock (including our Series A preferred stock discussed below under “Description of Series A Preferred Stock”) and other factors deemed relevant
by our board of directors.
As a holding company, we are ultimately dependent upon our subsidiaries, particularly Independent Bank, to
provide funding for our operating expenses, debt service and dividends. Various banking laws applicable to Independent Bank limit the payment of dividends and other distributions by Independent Bank to us, and may therefore, limit our ability to pay
dividends on our common stock and Series A preferred stock. If required payments on our outstanding junior subordinated debentures held by our unconsolidated subsidiary trusts are not made or are suspended, we would be prohibited from paying
dividends on our common stock and Series A preferred stock. Regulatory authorities could impose administratively stricter limitations on the ability of Independent Bank to pay dividends to us if such limits were deemed appropriate to preserve
certain capital adequacy requirements.
Under the terms of the Series A preferred stock, we may not pay any dividends or make any other
cash distributions on our common stock or repurchase or redeem any of our shares of our capital stock, including any equity securities or trust preferred securities issued by us or any of our affiliates, unless after giving effect to such repurchase
or redemption, our Tier 1 capital would be at least equal to $79,376,715 and all dividends have been paid on the Series A preferred stock for the most recently completed quarterly dividend period (or sufficient funds have been reserved).
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Liquidation Rights
In the event of the termination of our Company’s existence and its related winding up, the holders of our common stock will be entitled to
share ratably in any assets remaining after payment of all debts and other liabilities, including the liquidation preference of any shares of our preferred stock outstanding at the time of the termination of our existence.
Other
Our common stock has no
preemptive or conversion rights and is not entitled to the benefits of any redemption or sinking fund provision.
NASDAQ Listing
Our common stock was listed on the NASDAQ Global Market through January 1, 2014, and since January 2, 2014, has been listed on the
NASDAQ Global Select Market under the symbol “IBTX.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Wells Fargo Shareowner Services, whose address is P.O. Box 64945, St. Paul, Minnesota
55164-0945.
Business Combinations under Texas Law
A number of provisions of Texas law, our certificate of formation and bylaws could have an anti-takeover effect and make more difficult the
acquisition of the Company by means of a tender offer, a proxy contest or otherwise and the removal of incumbent directors. These provisions are intended to discourage coercive takeover practices and inadequate takeover bids and to encourage persons
seeking to acquire control of us to negotiate first with our board of directors.
We are subject to the provisions of Title 2, Chapter 21,
Subchapter M of the TBOC, or the Texas Business Combination Law, which provides that a Texas corporation may not engage in specified types of business combinations, including mergers, consolidations and asset sales, with a person, or an affiliate or
associate of that person, who is an “affiliated shareholder.” For purposes of this law, an “affiliated shareholder” is generally defined as the holder of 20% or more of the corporation’s voting shares, for a period of three
years from the date that person became an affiliated shareholder. The law’s prohibitions do not apply if:
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the business combination or the acquisition of shares by the affiliated shareholder was approved by the board of directors of the corporation before the affiliated shareholder became an affiliated shareholder; or
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the business combination was approved by the affirmative vote of the holders of at least two-thirds of the outstanding voting shares of the corporation not beneficially owned by the affiliated shareholder, at a meeting
of shareholders called for that purpose, not less than six months after the affiliated shareholder became an affiliated shareholder.
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We have more than 100 shareholders and is considered to be an “issuing public corporation” for purposes of this law. The Texas
Business Combination Law does not apply to the following:
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the business combination of an issuing public corporation: where the corporation’s original certificate of formation or bylaws contain a provision expressly electing not to be governed by the Texas Business
Combination Law; or that adopts an amendment to its certificate of formation or bylaws, by the affirmative vote of the holders, other than affiliated shareholders, of at least two-thirds of the outstanding voting shares of the corporation, expressly
electing not to be governed by the Texas Business Combination Law and so long as the amendment does not take effect for 18 months following the date of the vote and does not apply to a business combination with an affiliated shareholder who became
affiliated on or before the effective date of the amendment;
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a business combination of an issuing public corporation with an affiliated shareholder that became an affiliated shareholder inadvertently, if the affiliated shareholder divests itself, as soon as possible, of enough
shares to no longer be an affiliated shareholder and would not at any time within the three- year period preceding the announcement of the business combination have been an affiliated shareholder but for the inadvertent acquisition;
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a business combination with an affiliated shareholder who became an affiliated shareholder through a transfer of shares by will or intestacy and continuously was an affiliated shareholder until the announcement date of
the business combination; and
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a business combination of a corporation with its wholly owned Texas subsidiary if the subsidiary is not an affiliate or associate of the affiliated shareholder other than by reason of the affiliated shareholder’s
beneficial ownership of voting shares of the corporation.
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Neither our certificate of formation nor our bylaws contain any
provision expressly providing that the Company will not be subject to the Texas Business Combination Law. The Texas Business Combination Law may have the effect of inhibiting a nonnegotiated merger or other business combination involving
Independent, even if that event would be beneficial to our shareholders.
Certain Certificate of Formation and Bylaw Provisions Potentially Having an
Anti-takeover Effect
Our certificate of formation and bylaws contain certain provisions that could have an anti-takeover effect and
thus discourage potential takeover attempts and make it more difficult for our shareholders to change management or receive a premium for their shares. These provisions include:
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authorization for our board of directors to issue shares of one or more series of preferred stock without shareholder approval;
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the establishment of a classified board of directors, with directors of each class serving a three-year term;
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a requirement that directors only be removed from office for cause and only upon a majority shareholder vote;
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a provision that vacancies on our board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office;
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a prohibition of shareholder action by written consent, requiring all actions to be taken at a meeting of the shareholders;
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the requirement that shareholders representing two-thirds of the outstanding shares of common stock approve all amendments to our certificate of formation or bylaws and approve mergers and similar transactions;
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the requirement that any shareholders that desire to bring business before our annual meeting of shareholders or nominate candidates for election as directors at our annual meeting of shareholders must provide timely
notice of their intent in writing;
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the prohibition of cumulative voting in the election of directors; and
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a limitation on the ability of shareholders to call special meetings to those shareholders or groups of shareholders owning at least 20% of all shares entitled to vote in the election of directors at a meeting.
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Limitation of Liability and Indemnification of Officers and Directors
Our certificate of formation provides that our directors are not liable to our Company or our shareholders for monetary damages for an act or
omission in their capacity as a director. A director may, however, be found liable for:
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any breach of the director’s duty of loyalty to our Company or our shareholders;
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acts or omissions not in good faith that constitute a breach of the director’s duty to our Company;
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acts or omissions not in good faith that involve intentional misconduct or a knowing violation of law;
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any transaction from which the director receives an improper benefit, whether or not the benefit resulted from an action taken with the scope of the director’s duties;
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acts or omissions for which the liability of the director is expressly provided by an applicable statute; and
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acts related to an unlawful stock repurchase or payment of a dividend.
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Our certificate of
formation also provides that we will indemnify our directors and officers, and may indemnify our employees and agents, to the fullest extent permitted by applicable Texas law from any expenses, liabilities or other matters. Moreover, we have agreed,
subject to certain conditions, to indemnify each of our directors and officers for any expenses, liabilities or obligations he or she incurs as a result of, or for any amount paid by him or her in settlement of, any proceeding to which he or she is
a party or in which he or she is a witness as a result of their position with our Company or one of subsidiaries.
Insofar as
indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of our Company pursuant to the foregoing provisions, or otherwise, our Company has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of our Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
Since the terms of our certificate of formation and bylaws may differ from the
general information we are providing, you should only rely on the actual provisions of our certificate of formation and bylaws. If you would like to read our certificate of formation and bylaws, you may request a copy from us by following the
directions under the heading “Where You Can Find More Information.”
DESCRIPTION OF PREFERRED STOCK
The following description is a general summary of the terms of the preferred stock that we may issue. The description below and in
any prospectus supplement relating to the offer for sale of shares of a series of our preferred stock does not purport to be complete and is subject to and qualified in its entirety by reference to our certificate of formation, as amended, and the
applicable certificate of designation to our certificate of formation establishing the terms of the series of preferred stock being offered for sale by means of a prospectus supplement
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and our bylaws, as amended, each of which we will make available upon request. The descriptions herein and in the applicable prospectus supplement do not contain all of the information that you
may find useful or that may be important to you. You should refer to the provisions of our certificate of formation, the applicable certificate of designation and our bylaws because they, and not the summaries, define your rights as a holder of
shares of our preferred stock. See “Where You Can Find More Information” for additional information.
General
We are authorized to issue 10,000,000 shares of preferred stock, par value $0.01 per share. As of June 20, 2014, 23,938.35 shares of our Series
A preferred stock were issued and outstanding. Our certificate of formation, subject to limitations prescribed in our bylaws and subject to limitations prescribed by Texas law, authorizes the board of directors, from time to time by resolution or
duly authorizing committee of the board and without further shareholder action, to provide for the issuance of shares of preferred stock, in one or more series, and to fix the relative rights and preferences of the shares of a series including
voting powers, dividend rights, liquidation preferences, redemption rights and conversion privileges. As a result of its broad discretion with respect to the creation, establishment of the terms, and issuance of shares of a series of our preferred
stock without shareholder approval, our board of directors could adversely affect the voting power of the holders of common stock or another series of preferred stock and, by issuing shares of preferred stock with certain voting, conversion and/or
redemption rights, could discourage any attempt to obtain control of our Company.
Terms of the Preferred Stock That We May Offer and Sell to You
You should refer to the prospectus supplement relating to the shares of one or more series of preferred stock being offered for sale
for the specific terms of that series, including:
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the title and par value of the series of preferred stock being offered and the price per share at which such shares of the series of preferred stock are being offered to the public;
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the number of shares of the series of preferred stock being offered;
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the number of shares of preferred stock included in that series of preferred stock;
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the liquidation preference per share of the preferred stock of such series;
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the dividend rate(s), period(s) and/or payment date(s) or method(s) of calculating the payment date(s) applicable to the shares of the series of preferred stock being offered;
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whether dividends will be cumulative or noncumulative and, if cumulative, the date from which dividends on the shares of preferred stock being offered will accumulate;
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the procedures for any auction and remarketing, if any, for the shares of preferred stock being offered;
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the provisions for a sinking fund, if any, for the shares of preferred stock being offered;
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the provisions for redemption, if applicable, of the shares of preferred stock being offered;
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any listing of the shares of preferred stock being offered on any securities exchange or market;
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the terms and conditions, if applicable, upon which the shares of preferred stock being offered will be convertible into or exchangeable for other securities or rights, or a combination of the foregoing, including the
name of the issuer of the securities or rights, conversion or exchange ratio or price, or the manner of calculating the conversion or exchange ratio or price, and the conversion or exchange date(s) or period(s) and whether we will have the option to
convert such preferred stock into cash;
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voting rights, if any, of the shares of preferred stock being offered;
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a discussion of any material and/or special United States federal income tax considerations applicable to the shares of preferred stock being offered;
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the relative ranking and preferences of the shares of preferred stock being offered as to dividend rights to participate in our assets and rights upon winding up or termination of the affairs of our Company;
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any limitations on the issuance of any series of preferred stock ranking senior to or equally with the series of preferred stock being offered as to dividend rights and rights to participate in our assets upon winding
up or termination of the affairs of our Company; and
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any other specific terms, preferences, rights, limitations or restrictions of the shares of preferred stock being offered.
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Ranking
Unless otherwise specified in
the applicable prospectus supplement, the preferred stock will, with respect to distribution rights and rights to participate in our assets upon our winding up or our termination, rank:
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senior to all of our common stock and to all equity securities the terms of which specifically provide that the equity securities rank junior to the shares of preferred stock being offered;
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equally with all equity securities issued by us other than those referred to in the first and last bullet points of this subheading; and
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junior to all equity securities issued by us the terms of which specifically provide that the equity securities rank senior to the shares of preferred stock being offered.
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For purposes of this subheading, the term “equity securities” does not include convertible debt securities.
Distributions
Holders of the preferred
stock of each series will be entitled to receive, when, as and if declared by our board of directors, out of our assets legally available for payment to shareholders, cash distributions, or distributions in kind or in other property if expressly
permitted and described in the applicable prospectus supplement, at the rates and on the dates as we will set forth in such prospectus supplement. We will pay each distribution to holders of record as they appear on our stock transfer books on the
record dates determined by our board of directors or as set forth in the statement of designation for such series of preferred stock.
Distributions on any series of preferred stock, if cumulative, will be cumulative from and after the date set forth in the applicable
prospectus supplement. If our board of directors fails to declare a distribution payable on a distribution payment date on any class or series of preferred stock for which distributions are noncumulative, then the holders of that series of preferred
stock will have no right to receive a distribution in respect of the distribution period ending on that distribution payment date, and we will have no obligation to pay any distribution for that period, whether or not distributions on that series
are declared payable on any future distribution payment date.
If any shares of the preferred stock of any series are outstanding, no full
dividends will be declared or paid or set apart for payment on our preferred stock of any other class or series ranking, as to dividends, equally with or junior to the preferred stock of such series of preferred stock for any period unless all
required dividends are paid. The phrase “all required dividends are paid” when used in this prospectus with respect to a series of preferred stock means that:
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if the series of preferred stock has a cumulative dividend, full cumulative dividends on the preferred stock of the series have been or contemporaneously are declared and paid or declared and a sum sufficient for the
payment is set apart for payment for all past dividend periods and the then current dividend period, or
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if the series of preferred stock does not have a cumulative dividend, full dividends on the preferred stock of the series have been or contemporaneously are declared and paid or declared and a sum sufficient for the
payment is set apart for the payment for the then current dividend period.
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When dividends are not paid in full, or a sum
sufficient for the full payment is not so set apart, upon the shares of preferred stock of any series and the shares of any other series of preferred stock ranking equally as to dividends with the preferred stock of the series, all dividends
declared upon shares of preferred stock of the series and any other series of preferred stock ranking equally as to dividends with the preferred stock will be declared equally so that the amount of dividends declared per share on the preferred stock
of the series and the other series of preferred stock will in all cases bear to each other the same ratio that accrued and unpaid dividends per share on the shares of preferred stock of the series, which will not include any accumulation in respect
of unpaid dividends for prior dividend periods if the preferred stock does not have cumulative dividend, and the other series of preferred stock bear to each other. No interest, or sum of money in lieu of interest, will be payable in respect of any
dividend payment or payments on preferred stock of the series which may be in arrears.
Except as provided in the immediately preceding
paragraph, unless all required dividends are paid, no dividends, other than in common stock or other stock ranking junior to the preferred stock of the series as to dividends and participation in our assets upon our winding up or termination, will
be declared or paid or set aside for payment or other distribution will be declared or made upon the common stock or any of our other stock ranking junior or equally with the preferred stock of the series as to dividends or participation in our
assets upon our winding up or termination, nor will any common stock or any of our other capital stock ranking junior to or equally with preferred stock of the series as to dividends or participation in our assets upon our winding up or termination
be redeemed, purchased or otherwise acquired for any consideration, or any moneys be paid to or made available for a sinking fund for the redemption of any shares of any stock, by us except by conversion into or exchange for our other stock ranking
junior to the preferred stock of the series as to dividends and participation in our assets upon our winding up or termination.
Any
dividend payment made on shares of a series of preferred stock will first be credited against the earliest accrued but unpaid dividend due with respect to shares of the series that remains payable.
Redemption
If so provided in the
applicable prospectus supplement, the preferred stock will be subject to mandatory redemption or redemption at our option, in whole or in part, in each case upon the terms and notice, at the times and at the redemption prices set forth in the
prospectus supplement.
The prospectus supplement relating to the offer for sale of shares of a series of preferred stock that is subject
to mandatory redemption will specify the required notice and the number of shares of the preferred stock that will be redeemed by us in each year commencing after a date to be specified, at a redemption price per share to be specified, together with
an amount equal to all accumulated and unpaid dividends thereon, which will not, if the shares of that series of preferred stock does not have a cumulative dividend, include an accumulation in respect of unpaid dividends for prior dividends periods,
to the date of redemption. The redemption price may be payable in cash or other property, as specified in the applicable prospectus supplement. If the redemption price for preferred stock of any series is payable only from the net proceeds of the
issuance of our stock, the terms of the shares of that series of preferred stock may provide that, if no stock will have been issued or to the extent the net proceeds from any issuance are insufficient to pay in full the aggregate redemption price
then due, the preferred stock will automatically and mandatorily be converted into shares of our applicable stock pursuant to conversion provisions specified in the applicable prospectus supplement.
Notwithstanding the foregoing, unless provided otherwise for any series of preferred stock, unless all required dividends are paid:
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no shares of the applicable series of preferred stock will be redeemed unless all outstanding shares of preferred stock of the series are simultaneously redeemed, and
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we will not purchase or otherwise acquire directly or indirectly any shares of the applicable series of preferred stock except by conversion into or exchange for stock ranking junior to the preferred stock of the series
as to dividends and upon winding up or termination of the Company,
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provided, however, that the above restrictions will not prevent the
purchase or acquisition of shares of preferred stock of the class or series pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of preferred stock of the class or series.
Liquidation Preference
Upon any
voluntary or involuntary winding up or termination of our affairs as a company, then, before any distribution or payment will be made to the holders of any common stock or any other class or series of shares of our capital stock ranking junior to
the shares of a series of the preferred stock in the right to participate in the distribution of assets upon any winding up or termination of the Company, the holders of shares of each series of preferred stock will be entitled to receive out of our
assets legally available for distribution to shareholders liquidating distributions in the amount of the liquidation preference set forth in the applicable prospectus supplement, plus an amount equal to all accumulated and unpaid distributions.
After payment of the full amount of the liquidating distributions to which they are entitled, the holders of shares of such series of preferred stock will have no right or claim to any of our remaining assets. If, upon the voluntary or involuntary
winding up or termination, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of a series of our preferred stock having a liquidation preference and the corresponding amounts payable on
all shares of other classes or series of shares of our capital stock ranking equally with such series of our preferred stock in the right to the distribution of our assets, then the holders of the shares of such series of preferred stock and all
other classes or series of shares of capital stock will share ratably in any distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.
If liquidating distributions will have been made in full to all holders of preferred stock having a liquidation preference, our remaining
assets will be distributed among the holders of any other classes or series of shares of capital stock ranking junior to the preferred stock upon winding up or termination, according to their respective rights and preferences and in each case
according to their respective number of shares.
For those purposes, the consolidation or merger of the Company with or into any other
corporation, trust or entity, or the sale, lease or conveyance of all or substantially all of the property or business of the Company, will not be deemed to constitute a winding up or termination of the Company.
Voting Rights
Holders of preferred stock
will not have any voting rights, except as set forth below, as otherwise from time to time required by law or as otherwise provided in the certificate of designation establishing such series and as described in the applicable prospectus supplement.
Our board of directors has the authority to designate a new class of stock under the certificate of formation. Under the TBOC, holders of
outstanding shares of a series of preferred stock may be entitled to vote as a separate class on a proposed amendment to the terms of that series of preferred stock or our certificate of formation, including the certificate of designation, if the
amendment would, among other things:
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increase or decrease the aggregate number of authorized shares of that series of preferred stock;
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increase or decrease the par value of the shares of that series of preferred stock;
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alter or change the powers, preferences or special rights of the shares of that series of preferred stock so as to affect them adversely, in which case the approval of the proposed amendment would require the
affirmative vote of at least a majority of the outstanding shares of that series of preferred stock;
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effect an exchange, reclassification, cancellation of all or part of the shares of the series of preferred stock or create a right of exchange of all or part of the shares of another class or series into shares of such
series of preferred stock;
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increase the rights and preferences of a class or series with rights and preferences equal, prior, or superior to the shares of such series of preferred stock, or of a class or series with rights or preferences later or
inferior to the shares of such series of preferred stock in such a manner that the rights or preferences will be equal, prior, or superior to the shares of such series of preferred stock; or
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cancel or otherwise affect the dividends on the shares of the series of preferred stock that have accrued but have not been declared.
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Conversion Rights
The terms and
conditions, if any, upon which the shares of any series of preferred stock are convertible into or exchangeable for other securities or rights of the Company or other issuers, including, without limitation, common stock, debt securities or another
series of preferred stock, or any combination of the foregoing, will be set forth in the applicable prospectus supplement relating to the preferred stock. The terms will include the name of the issuer of the other securities or rights and the number
or principal amount of the securities or rights into which the shares of preferred stock are convertible or exchangeable, the conversion or exchange price or ratio or the manner of calculating the price or ratio at which such conversion or exchange
will be made, the conversion or exchange date(s) or period(s), provisions as to whether conversion or exchange will be at the option of the holders of the shares of preferred stock or at the Company’s or other issuer’s option, the events
requiring an adjustment of the conversion or exchange price or ratio and provisions affecting conversion or exchange in the event of the redemption of shares of the series of preferred stock.
Transfer Agent and Registrar
The
transfer agent and registrar for the preferred stock will be Wells Fargo Shareowner Services.
DESCRIPTION OF
OUTSTANDING SERIES A PREFERRED STOCK
The following description is a general summary of the terms of our Senior Non-Cumulative
Perpetual Preferred Stock, Series A, or Series A preferred stock. The description below and in any prospectus supplement relating to the offer for sale of shares of a series of our preferred stock does not purport to be complete and is subject
to and qualified in its entirety by reference to our certificate of formation, as amended, and the applicable certificate of designation to our certificate of formation establishing the terms of the Series A preferred stock being offered for
sale by means of a prospectus supplement and our bylaws, as amended, each of which we will make available upon request. The descriptions herein and in the applicable prospectus supplement do not contain all of the information that you may find
useful or that may be important to you. You should refer to the provisions of our certificate of formation, the applicable certificate of designation and our bylaws because they, and not the summaries, define your rights as a holder of shares of our
Series A preferred stock. See “Where You Can Find More Information” for more information.
Original Issuance
In connection with the consummation of the acquisition of BOH Holdings, Inc. on April 15, 2014, we exchanged a share of our Series A
preferred stock for each share of the BOH Holdings Series C preferred stock then outstanding. Our Series A preferred stock provides the same relative rights, preferences, privileges and voting powers, and is subject to the same limitations and
restrictions as were the shares of the BOH Holdings Series C preferred stock, taken as a whole, existing immediately prior to the consummation of the acquisition. All of our outstanding shares of Series A preferred stock issued in the BOH
Holdings, Inc. acquisition is held and owned by the U.S. Treasury. The following is a summary of the relative rights, privileges and preferences of our Series A preferred stock.
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Authorized Shares
There are 23,938.35 authorized shares of the series of our Series A preferred stock, all of which are issued and outstanding.
Ranking
The Series A preferred stock is
ranked senior to the common stock with respect to dividend rights and rights to participate in our assets upon our winding up or termination.
Exchange/Conversion Rights
Holders of
shares of the Series A preferred stock have no rights to exchange or convert their shares into any other securities of the Company.
Dividends
Holders of Series A preferred stock are entitled to receive at the end of each quarterly dividend period an amount equal to one-quarter of the
applicable dividend rate (which rate is approximately 1%) multiplied by the liquidation amount per each share of Series A preferred stock, which liquidation amount is currently equal to $1,000 per share, or approximately $60,000 per quarter.
Voting Rights
The holders of the Series
A preferred stock have no general voting rights other than as required under Texas law or expressly provided by the Company and summarized below.
The written consent of the U.S. Treasury, as long as the U.S. Treasury holds any shares of Series A preferred stock, or the written consent of
holders of a majority of the outstanding shares of Series A preferred stock if the U.S. Treasury no longer holds any such shares, is required generally to approve the following actions by the Company, subject to certain exceptions as stated in the
statement of designation for the Series A preferred stock:
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Authorization of any shares of, or securities convertible, exchangeable or exercisable for shares of, any Company capital stock ranking senior to the Series A preferred stock with respect to either or both the payment
of dividends and/or the distribution of our assets upon our winding up or termination;
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Any amendment of the statement of designation for the series of the Series A preferred stock that would adversely affect the rights, preferences, privileges or voting powers for such Series A preferred stock;
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Certain share exchanges or reclassifications involving the Series A preferred stock or any merger of the Company unless the shares of Series A preferred stock remain outstanding or become securities of the resulting
entity or its ultimate parent and the shares continue to have equivalent rights, preferences, privileges and voting powers;
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Any sale of all or substantially all of the assets of the Company unless the Series A preferred stock were redeemed in full in connection with such sale; and
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The consummation of certain change of control transactions resulting in the surviving entity continuing as a bank holding company or savings and loan holding company, unless the shares of Series A preferred stock are
converted into securities of the surviving entity or its ultimate parent and the shares continue to have equivalent rights, preferences, privileges and voting powers.
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Board Observer Rights
A majority of the outstanding shares of Series A preferred stock have the right to designate a representative to be invited to attend, in a
nonvoting capacity, all meetings of the Company’s board of directors in the event that the Company has failed to timely pay dividends due upon the Series A preferred stock for an aggregate of five quarterly dividend periods, whether or not
consecutive. This right to select an observer terminates upon timely dividend payments for four consecutive quarterly dividends periods, but would be revived in the event there are additional failures to make timely dividend payments for five
quarters, in the aggregate, following the termination of observer rights.
Director Designation Rights
Whenever dividends on the Series A preferred stock have not been declared and timely paid in full for an aggregate of six quarterly dividend
periods, whether or not consecutive, and the aggregate liquidation preferences of the then-outstanding shares of Series A preferred stock is greater than or equal to $25 million, the authorized number of the Company’s directors will be
increased by two and the holders of Series A preferred stock, voting together as a single class, will have the right to elect two directors to fill those newly created directorships at either its next annual meeting (if one is to be held within
thirty days) or at a special meeting of shareholders, and this right continues until complete and timely dividend payment have been made for four consecutive quarterly dividend periods. This right to appoint directors revives in the event of any
such future failure of the Company to pay complete and timely dividends.
Preemptive Rights
Holders of the Series A preferred stock do not have any preemptive rights.
Liquidation Rights
The holders of Series
A preferred stock have a liquidation preference equal to the “liquidation amount” per share plus any accrued and unpaid dividends on each such share. The current liquidation amount for the Series A preferred stock is $1,000 per share.
Redemption Rights
The Company has the
option to redeem, in whole or in part, any or all of the shares of the Series A preferred stock, subject to any required regulatory approval, for a price per share equal to the sum of the liquidation amount per share plus any unpaid dividends for
the then current quarterly dividend period up to the day before the redemption date.
Restriction on Redemption and Repurchases of Company Securities
Under the terms of the Series A preferred stock, we may not repurchase or redeem any of its shares of its capital stock, including any
equity securities or trust preferred securities issued by us or any of our affiliates, unless after giving effect to such repurchase or redemption, our Tier 1 capital would be at least equal to $79,376,715 and all dividends have been paid on the
Series A preferred stock for the most recently completed quarterly dividend period (or sufficient funds have been reserved).
If the
Company does not declare and pay the required dividends on the Series A preferred stock, then for the period of time beginning on the last day of such quarterly dividend period until the last day of the third quarterly dividend period immediately
following, the Company will be prohibited from redeeming, purchasing, repurchasing or otherwise acquiring any shares of its capital stock at any time, subject to certain enumerated exceptions.
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DESCRIPTION OF UNIT PURCHASE AGREEMENTS
Securities may be offered and sold as part of units consisting of a unit purchase agreement relating the purchase of any combination of:
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debt securities of one or more series;
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one or more series of preferred stock; or
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which may secure the holders’ obligations to purchase the common stock, preferred stock
and/or debt securities under the unit purchase agreements. The applicable prospectus supplement will describe the terms of any unit purchase agreements. Such description may not be complete. For more information, you should review the unit purchase
agreements and, if applicable, any related arrangements relating to those unit purchase agreements. We will file forms of these documents with the SEC before the Company issues any unit purchase agreements.
BOOK ENTRY ISSUANCE
If so provided in the applicable prospectus supplement, we will issue the debt securities of each series offered by means of this prospectus
in the form of one or more fully registered global debt securities, without coupons, each of which we refer to as a “global security.” Each such global security will be registered in the name of a depositary or a nominee of a depositary
and held through one or more domestic clearing systems, principally the book-entry system operated by DTC in the United States. No person who acquires an interest in these global securities will be entitled to receive a certificate or other
instrument representing the person’s interest in the global securities except as set forth under “—Certificated Debt Securities” below or in the applicable prospectus supplement. Unless otherwise provided in the applicable
prospectus supplement, all references in this prospectus or any prospectus supplement to this prospectus to actions by holders of any debt securities that are global securities refer to actions taken by DTC upon instructions from its participants,
and all references herein to payments and notices to the holders refer to payments and notices to DTC or its nominee, as the case may be, as the registered holder of the offered debt securities. Electronic securities and payment transfer,
processing, depositary and custodial links have been established among the DTC system and other systems, either directly or indirectly, which enable global securities to be issued, held and transferred among these clearing systems through these
links.
Although DTC has agreed to the procedures described below in order to facilitate transfers of global securities among participants
in DTC, it is under no obligation to perform or continue to perform those procedures, and those procedures may be modified or discontinued at any time. Neither we, the trustee nor any registrar and transfer agent with respect to our debt securities
of any series offered by means of this prospectus will have any responsibility for the performance by DTC or any of its direct or indirect participants of its obligations under the rules and procedures governing the operations of DTC.
Unless otherwise specified in the applicable prospectus supplement, the debt securities of a series issued in the form of one or more global
securities will be registered in the name of DTC or a nominee of DTC. Where appropriate with respect to the debt securities of a series being offered and sold by means of this prospectus, links will be established among DTC to facilitate
cross-market transfers of those debt securities associated with secondary market trading. While the following information in this prospectus concerning DTC and its book-entry system has been obtained from sources we believe to be reliable, we take
no responsibility for the accuracy of that information. Furthermore, DTC has no obligation to perform or continue to perform the procedures described below, and any of them may discontinue or change those procedures at any time.
DTC
We understand the following
information is applicable with respect to DTC: DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a “clearing corporation” within the meaning of the
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New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for U.S.
and non-U.S. equity issues, corporate and municipal debt issues and money market instruments that DTC’s participating organizations, referred to as “direct DTC participants,” deposit with DTC. DTC also facilitates the clearance and
post-trade settlement among direct DTC participants of sales and other securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry transfers and pledges in direct DTC participants’
accounts, thereby eliminating the need for physical movement of securities certificates. Direct DTC participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other
organizations, some of which, and/or their representatives, indirectly own DTC. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation, or DTCC. DTCC is owned by a number of direct DTC participants and members of
the National Securities Clearing Corporation, the Fixed Income Clearing Corporation, and the Emerging Markets Clearing Corporation (which corporations are also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American
Stock Exchange LLC, and the Financial Industry Regulatory Authority, Inc. Indirect access to the DTC system is also available to others, referred to as “indirect DTC participants” and together with direct DTC participants, referred to as
“DTC participants,” such as U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations, that clear through or maintain a custodial relationship with a direct DTC participant, either directly or
indirectly. DTC rules applicable to DTC participants are on file with the SEC.
Beneficial interests in a global security representing
outstanding debt securities of a series will be shown on, and transfers of beneficial interests in the global security will be made only through, records maintained by DTC and DTC participants. When you purchase our debt securities through the DTC
system, the purchases must be made by or through a direct DTC participant, which will receive credit for the debt securities in its account on DTC’s records. When you actually purchase the debt securities, you will become their beneficial owner
and your ownership interest will be recorded only on the records of the DTC participants. DTC will have no knowledge of your individual ownership of the debt securities. DTC’s records will show only the identity of the direct DTC participants
and the amount of the debt securities held by or through them. When you purchase debt securities through the DTC system, you will not receive a written confirmation of your purchase or sale or any periodic account statement directly from DTC. You
should instead receive these confirmations and account statements from the DTC participant through which you purchase the debt securities. The DTC participants are responsible for keeping accurate account of the holdings of their customers.
The trustee and we will treat DTC or its nominee as the owner of each global security registered in the name of DTC or its nominee for all
purposes. Accordingly, the trustee will wire payments on the debt securities to the DTC nominee that is the registered holder of the debt securities. It is DTC’s current practice, upon receipt of any payment of distributions or liquidation
amounts due on a global security, to proportionately credit direct DTC participants’ accounts on the payment date based on their holdings of the relevant securities. Payments to you with respect to your beneficial interest in any debt
securities in turn will be the responsibility of the DTC participants based on their respective customary practices, and the trustee, any paying agent and we will have no direct responsibility or liability to pay amounts due on a global security to
you or any other beneficial owners in that global security. Any redemption notices likewise will be sent by us or, at our request, by the trustee directly to DTC, which in turn will inform the DTC participants, which will then contact you as a
beneficial holder. In addition, it is DTC’s current practice to pass through any consenting or voting rights to the direct DTC participants by using an omnibus proxy. Those direct DTC participants should, in turn, solicit votes and consents
from you, the ultimate owner of debt securities, based on their respective customary practices.
Under the rules, regulations and
procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers between direct DTC participants on whose behalf it acts with respect to the debt securities and is required to receive and transmit distributions
of principal of and premium, if any, and interest on the debt securities. DTC participants with which investors have accounts with respect to the debt securities similarly are required to make book-entry transfers and receive and transmit payments
on behalf of their respective investors.
Because DTC can only act on behalf of direct DTC participants, who in turn act on behalf of
indirect DTC participants and certain banks, the ability of a person having a beneficial interest in a security held in DTC to transfer or pledge that interest to persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of that interest, may be affected by the lack of a physical certificate representing that interest. The
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laws of some states of the United States require that certain persons take physical delivery of securities in certificated form in order to transfer or perfect a security interest in those
securities. Consequently, the ability to transfer beneficial interests in a security held in DTC to those persons may be limited.
DTC has
advised us that it will take any action permitted to be taken by a holder of debt securities under the terms and conditions of the debt securities (including, without limitation, the presentation of debt securities for exchange) only at the
direction of one or more of the direct DTC participants to whose accounts with DTC interests in the relevant debt securities are credited, and only in respect of the portion of the aggregate principal amount of the debt securities as to which that
direct DTC participant has or those direct DTC participants have given the direction. However, in certain circumstances described below under “—Certificated Debt Securities” below, DTC will exchange the global securities held by it
for certificated debt securities, which it will distribute to the direct DTC participants.
Certificated Debt Securities
Debt securities represented by one or more global securities will be exchangeable for certificated debt securities with the same terms in
authorized denominations only if:
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DTC is unwilling or unable to continue as depositary or ceases to be a clearing agency registered under applicable law, and a successor is not appointed by us within 90 days; or
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we decide to discontinue the book-entry system; or
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an event of default has occurred and is continuing with respect to the applicable debt securities.
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If a global security is exchanged for certificated debt securities, the trustee will keep the registration books for the applicable debt
securities at its corporate office and follow customary practices and procedures regarding those certificated debt securities.
U.S. FEDERAL TAX CONSIDERATIONS
The following is a summary of the material U.S. federal income tax consequences, and to the
limited extent discussed below, the material U.S. federal estate tax consequences, that may be relevant to a prospective holder of our securities. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), the
regulations promulgated by the U.S. Treasury Department, rulings and other administrative pronouncements issued by the Internal Revenue Service (the “IRS”), and judicial decisions, all as currently in effect, and all of which are subject
to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. We have not
sought and do not intend to seek an advance ruling from the IRS regarding any matter discussed in this prospectus. This summary is for general information only and is not tax advice. This summary does not address all possible tax considerations that
may be material to an investor and does not constitute legal or tax advice. Moreover, this summary does not purport to discuss all aspects of U.S. federal taxation that may be important to a particular investor in light of its investment or tax
circumstances, or to investors subject to special tax rules, such as:
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banks or financial institutions;
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regulated investment companies and REITs;
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partnerships or other entities treated as partnerships for U.S. federal income tax purposes and trusts;
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persons who hold our securities on behalf of another person as a nominee;
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persons who hold or receive our securities through the exercise of employee options or otherwise as compensation;
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persons holding our securities as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment;
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persons holding our securities that elect to use a mark-to-market method of accounting for their securities holdings;
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persons subject to the “Medicare contribution tax”;
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persons subject to the alternative minimum tax;
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tax-exempt organizations;
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tax-qualified retirement plans;
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except to extent discussed below, foreign investors.
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This summary assumes that investors will
hold our securities as capital assets, which generally means as property held for investment. For purposes of this discussion, a U.S. holder is a holder of our securities that is for U.S. federal income tax purposes:
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a citizen or resident of the United States,
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a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any of its states, or the District of Columbia,
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an estate, whose income is subject to U.S. federal income taxation regardless of its source, or
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a trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or
(2) it has a valid election to be treated as a U.S. person.
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An individual is generally treated as a resident of the
United States in any calendar year for U.S. federal income tax purposes if the individual is present in the United States for at least 31 days in that calendar year and for an aggregate of at least 183 days during the three-year period ending on the
last day of the current calendar year. For purposes of the 183-day calculation, all of the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the days present in the second preceding
year are counted. Residents are generally taxed for U.S. federal income tax purposes as if they were United States citizens.
If a
partnership, entity or arrangement treated as a partnership for U.S. federal income tax purposes holds our securities, the federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the
activities of the partnership. If you are a partner in a partnership holding our securities, you should consult your tax advisor regarding the consequences of the purchase, ownership and disposition of our securities by the partnership. The
following section addresses the treatment of a non-U.S. holder that holds our stock; the treatment of a U.S. holder that holds our debt securities is discussed below under “— Holders of Debt Securities.”
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THE U.S. FEDERAL INCOME TAX TREATMENT OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR
SECURITIES DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF COMPLEX PROVISIONS OF U.S. FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. IN ADDITION, THE TAX CONSEQUENCES OF THE ACQUISITION,
OWNERSHIP AND DISPOSITION OF OUR SECURITIES TO ANY PARTICULAR HOLDER WILL DEPEND ON THE HOLDER’S PARTICULAR TAX CIRCUMSTANCES. EACH PROSPECTIVE HOLDER OF OUR SECURITIES IS URGED TO CONSULT ITS TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE,
LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES TO SUCH HOLDER OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES IN LIGHT OF SUCH HOLDER’S PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES.
Non-U.S. Holders of Stock
The rules
governing U.S. federal income taxation of non-U.S. holders of our securities are complex. A “non-U.S. holder” means a holder that is not a U.S. holder, as defined above, and is not an entity treated as a partnership for U.S. federal
income tax purposes. This section is only a summary of such rules as they apply to non-U.S. holders of our stock; a summary of such rules as they apply to non-U.S. holders of our debt securities is discussed below under “— Holders of Debt
Securities.” We urge non-U.S. holders to consult their own tax advisors to determine the impact of federal, state, and local income tax laws on ownership of our stock, including any reporting requirements.
Distributions on Shares of Our Stock
If distributions are paid on shares of our stock, the distributions will constitute dividends for U.S. federal income tax purposes to the
extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent a distribution exceeds our current and accumulated earnings and profits, it will constitute a return of capital
that is applied against and reduces, but not below zero, the adjusted tax basis of your shares in our stock. Any remainder will be treated as gain from the sale of shares of our stock. Dividends paid to a non-U.S. holder generally will be subject to
withholding of U.S. federal income tax at the rate of 30% or such lower rate as may be specified by an applicable income tax treaty, the benefits for which a non-U.S. holder is eligible. However, if the dividend is effectively connected with the
non-U.S. holder’s conduct of a trade or business in the United States and, where an income tax treaty applies, is attributable to a U.S. permanent establishment or fixed base maintained by such non-U.S. holder, the dividend will not be subject
to any withholding tax, provided certain certification and disclosure requirements are met, as described below, but will be subject to U.S. federal income tax imposed on net income on the same basis that applies to U.S. persons generally. A
corporate non-U.S. holder under certain circumstances also may be subject to a branch profits tax equal to 30%, or such lower rate as may be specified by an applicable income tax treaty, the benefits for which a non-U.S. holder is eligible, on a
portion of its effectively connected earnings and profits for the taxable year. Non-U.S. holders are urged to consult their own tax advisors regarding the potential applicability of any income tax treaty.
To claim the benefit of an applicable income tax treaty or to claim exemption from withholding because the income is effectively connected
with the conduct of a trade or business in the United States, a non-U.S. holder must provide to the applicable withholding agent a properly executed IRS Form W-8BEN for treaty benefits or W-8ECI for effectively connected income, or such successor
forms as the IRS designates, and certify under penalties of perjury that such holder is not a U.S. person prior to the payment of distributions on our stock. These forms must be periodically updated. Special certification and other requirements
apply to certain non-U.S. holders that are pass-through entities and non-U.S. holders whose stock is held through certain foreign intermediaries. Non-U.S. holders may obtain a refund or credit of any excess amounts withheld by timely filing an
appropriate claim with the IRS.
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Gain on Disposition
A non-U.S. holder generally will not be subject to U.S. federal income tax, including by way of withholding, on gain recognized on a sale or
other disposition of shares of our stock unless any one of the following is true:
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the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States and, where an applicable income tax treaty applies, is attributable to a U.S. permanent establishment
or fixed base maintained by such non-U.S. holder;
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the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more in the taxable year of the disposition and certain other requirements are met; or
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our stock constitutes a U.S. real property interest by reason of our status as a “United States real property holding corporation,” or USRPHC, for U.S. federal income tax purposes at any time during the
shorter of (1) the period during which you hold our stock and (2) the five-year period ending on the date you dispose of our stock.
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We believe that we are not currently, and will not become, a USRPHC for U.S. federal income tax purposes. However, because the determination
of whether we are a USRPHC depends on the fair market value of our U.S. real property interests relative to the fair market value of our other business assets, we cannot assure you that we will not become a USRPHC in the future. As a general matter,
as long as our stock is regularly traded on an established securities market, however, it will not be treated as a U.S. real property interest with respect to any non-U.S. holder that holds no more than 5% of such regularly traded stock. If we are
determined to be a USRPHC and the foregoing exception does not apply, among other things, a purchaser may be required to withhold 10% of the proceeds payable to a non-U.S. holder from a disposition of shares of our stock, and the non-U.S. holder
generally will be taxed on its net gain derived from the disposition at the graduated U.S. federal income tax rates applicable to U.S. persons.
Unless an applicable income tax treaty provides otherwise, gain described in the first bullet point above will be subject to the U.S. federal
income tax imposed on net income on the same basis that applies to U.S. persons generally but will generally not be subject to withholding. Corporate non-U.S. holders also may be subject to a branch profits tax on such gain. Gain described in the
second bullet point above will be subject to a flat 30% U.S. federal income tax, which may be offset by certain U.S. source capital losses. Non-U.S. holders are urged to consult any potentially applicable income tax treaties that may provide for
different rules.
U.S. Federal Estate Taxes
Shares of our stock owned or treated as owned by an individual who at the time of death is a non-U.S. holder are considered U.S. situs assets
and will be included in the individual’s estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.
Information Reporting Requirements and Backup Withholding
Information reporting and backup withholding (currently at a 28% rate) generally will apply to dividends paid with respect to our stock. In
certain circumstances, non-U.S. holders may avoid information reporting and backup withholding if they provide to the applicable withholding agent a properly executed IRS Form W-8BEN for treaty benefits or W-8ECI for effectively connected income, or
such successor forms as the IRS designates, and certify under penalties of perjury as to their status as non-U.S. holders and meet certain other requirements, or otherwise establish an exemption. Copies of information returns may also be made
available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an applicable income tax treaty. Non-U.S. holders are urged to consult their own tax advisors regarding the application of the information
reporting and backup withholding rules to them.
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The gross proceeds from the disposition of shares of our stock may be subject to information
reporting and backup withholding. If a non-U.S. holder sells shares of our stock outside the United States through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to such holder outside the United States, then the U.S. backup
withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting will generally apply to a payment of sale proceeds, even if that payment is made outside the United States, if a
non-U.S. holder sells shares of our stock through a non-U.S. office of a broker that:
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is a U.S. person for U.S. federal tax purposes;
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is a foreign person that derives 50% or more of its gross income in specific periods from the conduct of a trade or business in the United States;
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is a “controlled foreign corporation” for U.S. tax purposes; or
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is a foreign partnership, if at any time during its tax year (1) one or more of its partners are U.S. persons who in the aggregate hold more than 50% of the income or capital interests in the partnership; or
(2) the foreign partnership is engaged in a U.S. trade or business,
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unless the broker has documentary evidence in its files that the
non-U.S. holder is not a U.S. person and certain other conditions are met, or the non-U.S. holder otherwise establishes an exemption. In such circumstances, backup withholding will not apply unless the broker has actual knowledge or reason to know
that the non-U.S. holder is not a non-U.S. person.
If a non-U.S. holder receives payments of the proceeds of a sale of shares of our
stock to or through a U.S. office of a broker, the payment is subject to both backup withholding and information reporting unless such non-U.S. holder provides to the applicable withholding agent a properly executed IRS Form W-8BEN (or valid
substitute or successor form) certifying under penalties of perjury that such stockholder is not a U.S. person or otherwise establishes an exemption.
Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules from a payment to a non-U.S. holder can be
refunded or credited against the non-U.S. holder’s U.S. federal income tax liability, if any, provided that an appropriate claim is timely filed with the IRS.
Redemption and Conversion of Preferred Stock
Cash
Redemption of Preferred Stock
A redemption of preferred stock will be treated for U.S. federal income tax purposes as a
distribution taxable as a dividend (to the extent of our current and accumulated earnings and profits), unless the redemption satisfies one of the tests set forth in Section 302(b) of the Code and is therefore treated as a sale or exchange of
the redeemed shares. Such a redemption will be treated as a sale or exchange if it (i) is “substantially disproportionate” with respect to the holder (which will not be the case if only nonvoting preferred stock is redeemed),
(ii) results in a “complete termination” of the holder’s equity interest in us, or (iii) is “not essentially equivalent to a dividend” with respect to the holder, all within the meaning of Section 302(b) of
the Code.
In determining whether any of these tests has been met, shares of our common stock and preferred stock considered to be owned
by the holder by reason of certain constructive ownership rules set forth in the Code, as well as shares of our common stock and preferred stock actually owned by the holder, must generally be taken into account. If a holder of preferred stock owns
(actually and constructively) no shares of our outstanding common stock or an insubstantial percentage thereof, a redemption of shares of preferred stock of that holder is likely to qualify for sale or exchange treatment because the redemption would
be “not essentially equivalent to a dividend.” However, the determination as to whether any of the alternative tests of Section 302(b) of the Code will be satisfied with respect to any particular holder of preferred stock depends upon
the facts and circumstances at the time the determination must be made. We urge prospective holders of preferred stock to consult their own tax advisors to determine such tax treatment.
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If a redemption of preferred stock is not treated as a distribution taxable as a dividend to a
particular holder, it will be treated as a taxable sale or exchange by that holder. As a result, the holder will recognize gain or loss for federal income tax purposes in an amount equal to the difference between (i) the amount of cash and the
fair market value of any property received (less any portion thereof attributable to accumulated and declared but unpaid dividends, which will be taxable as a dividend to the extent of our current and accumulated earnings and profits) and
(ii) the holder’s adjusted tax basis in the shares of the preferred stock. Such gain or loss will be capital gain or loss if the shares of preferred stock were held as a capital asset, and will be long-term gain or loss if such shares were
held for more than one year. If a redemption of preferred stock is treated as a distribution taxable as a dividend, the amount of the distribution will be measured by the amount of cash and the fair market value of any property received by the
holder, and the holder’s adjusted tax basis in the redeemed shares of the preferred stock will be transferred to the holder’s remaining shares of our stock. If the holder owns no other shares of our stock, such basis may, under certain
circumstances, be transferred to a related person or it may be lost entirely.
Conversion of Preferred Stock into Common Stock
In general, no gain or loss will be recognized for federal income tax purposes upon conversion of the preferred stock solely into shares of
common stock. The basis that a stockholder will have for tax purposes in the shares of common stock received upon conversion will be equal to the adjusted basis for the stockholder in the shares of preferred stock so converted, and provided that the
shares of preferred stock were held as a capital asset, the holding period for the shares of common stock received would include the holding period for the shares of preferred stock converted. A stockholder will, however, generally recognize gain or
loss on the receipt of cash in lieu of fractional shares of common stock in an amount equal to the difference between the amount of cash received and the stockholder’s adjusted basis for tax purposes in the preferred stock for which cash was
received. Furthermore, under certain circumstances, a stockholder of shares of preferred stock may recognize gain or dividend income to the extent that there are accumulated and unpaid dividends on the shares at the time of conversion into common
stock.
Adjustments to Conversion Price
Adjustments in the conversion price, or the failure to make such adjustments, pursuant to the anti-dilution provisions of the preferred stock
or otherwise, may result in constructive distributions to the stockholders of preferred stock that could, under certain circumstances, be taxable to them as dividends pursuant to Section 305 of the Code. If such a constructive distribution were
to occur, a stockholder of preferred stock could be required to recognize ordinary income for tax purposes without receiving a corresponding distribution of cash.
Holders of Debt Securities
U.S. Holders
Payments of Interest
.
In general, except as described below under “— Original Issue Discount,”
interest on debt securities will be taxable to a U.S. holder as ordinary income at the time it accrues or is received, in accordance with the U.S. holder’s regular method of accounting for U.S. federal income tax purposes. In general, if the
terms of a debt instrument entitle a holder to receive payments other than “qualified stated interest” (generally, stated interest that is unconditionally payable in cash or in property (other than debt instruments of the issuer) at least
annually at a single fixed or qualifying floating rate), such holder might be required to recognize additional interest as “original issue discount” over the term of the instrument.
Original Issue Discount
.
If you own debt securities issued with original issue discount (“OID”), you will be
subject to special tax accounting rules, as described in greater detail below. In that case, you should be aware that you generally must include OID in gross income in advance of the receipt of cash attributable to that income. However, you
generally will not be required to include separately in income cash payments received on the debt securities, even if denominated as interest, to the extent those payments do not constitute “qualified stated interest,” as defined below. If
we determine that a particular debt security will be issued with OID (an “OID debt security”), we will disclose that determination in the prospectus supplement or supplements relating to those debt securities.
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A debt security with an “issue price” that is less than the “stated redemption
price at maturity” (the sum of all payments to be made on the debt security other than “qualified stated interest”) generally will be issued with OID if that difference is at least 0.25% of the stated redemption price at maturity
multiplied by the number of complete years to maturity. The “issue price” of each debt security in a particular offering will be the first price at which a substantial amount of that particular offering is sold to the public. The term
“qualified stated interest” means stated interest that is unconditionally payable in cash or in property, other than debt instruments of the issuer, and the interest to be paid meets all of the following conditions:
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it is payable at least once per year;
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it is payable over the entire term of the debt security; and
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it is payable at a single fixed rate or, subject to certain conditions, based on one or more interest indices.
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If we determine that particular debt securities of a series will bear interest that is not qualified stated interest, we will disclose that
determination in the prospectus supplement or supplements relating to those debt securities.
If you own a debt security issued with
“de minimis” OID, which is discount that is not OID because it is less than 0.25% of the stated redemption price at maturity multiplied by the number of complete years to maturity, you generally must include the de minimis OID in income at
the time principal payments on the debt securities are made in proportion to the amount paid. Any amount of de minimis OID that you have included in income will be treated as capital gain.
Certain of the debt securities may contain provisions permitting them to be redeemed prior to their stated maturity at our option and/or at
your option. OID debt securities containing those features may be subject to rules that differ from the general rules discussed herein. If you are considering the purchase of OID debt securities with those features, you should carefully examine the
applicable prospectus supplement or supplements and should consult your own tax advisors with respect to those features since the tax consequences to you with respect to OID will depend, in part, on the particular terms and features of the debt
securities.
If you own OID debt securities with a maturity upon issuance of more than one year you generally must include OID in income
in advance of the receipt of some or all of the related cash payments using the “constant yield method” described in the following paragraphs. This method takes into account the compounding of interest.
The amount of OID that you must include in income if you are the initial U.S. holder of an OID debt security is the sum of the “daily
portions” of OID with respect to the debt security for each day during the taxable year or portion of the taxable year in which you held that debt security (“accrued OID”). The daily portion is determined by allocating to each day in
any “accrual period” a pro rata portion of the OID allocable to that accrual period. The “accrual period” for an OID debt security may be of any length and may vary in length over the term of the debt security, provided that each
accrual period is no longer than one year and each scheduled payment of principal or interest occurs on the first day or the final day of an accrual period. The amount of OID allocable to any accrual period other than the final accrual period is an
amount equal to the excess, if any, of:
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the debt security’s “adjusted issue price” at the beginning of the accrual period multiplied by its yield to maturity, determined on the basis of compounding at the close of each accrual period and
properly adjusted for the length of the accrual period, over
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the aggregate of all qualified stated interest allocable to the accrual period.
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OID allocable
to a final accrual period is the difference between the amount payable at maturity, other than a payment of qualified stated interest, and the adjusted issue price at the beginning of the final accrual period. Special rules will apply for
calculating OID for an initial short accrual period. The “adjusted issue price” of a debt security at the beginning of any accrual period is equal to its issue price increased by the accrued OID for each prior
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accrual period, determined without regard to the amortization of any acquisition or bond premium, as described below, and reduced by any payments previously made on the debt security (other than
a payment of qualified stated interest). Under these rules, you will generally have to include in income increasingly greater amounts of OID in successive accrual periods. We are required to provide information returns stating the amount of OID
accrued on debt securities held by persons of record other than corporations and other exempt holders.
Floating rate debt securities are
subject to special OID rules. In the case of an OID debt security that is a floating rate debt security, both the “yield to maturity” and “qualified stated interest” will be determined solely for purposes of calculating the
accrual of OID as though the debt security will bear interest in all periods at a fixed rate generally equal to the rate that would be applicable to interest payments on the debt security on its date of issue or, in the case of certain floating rate
debt securities, the rate that reflects the yield to maturity that is reasonably expected for the debt security. Additional rules may apply if either:
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the interest on a floating rate debt security is based on more than one interest index; or
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the principal amount of the debt security is indexed in any manner.
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This discussion does not
address the tax rules applicable to debt securities with an indexed principal amount or other contingent payments, or debt securities that may be convertible into or exchangeable for other securities. If you are considering the purchase of floating
rate OID debt securities, debt securities with indexed principal amounts or other contingent payments, or debt securities that may be convertible into or exchangeable for other securities, you should carefully examine the prospectus supplement or
supplements relating to those debt securities, and should consult your own tax advisors regarding the U.S. federal income tax consequences to you of holding and disposing of those debt securities.
You may elect to treat all interest on any debt securities as OID and calculate the amount includible in gross income under the constant yield
method described above. For purposes of this election, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium. You must make this election for the taxable year in which you acquired the debt security, and you may not revoke the election without the consent of the IRS. If this election were to be made with respect to a debt security with
market discount, you would be deemed to have made an election to currently include in income market discount with respect to all other debt instruments having market discount that you acquire during the year of the election or thereafter, as
described below in “— Market Discount.” Similarly, if you make this election for a debt security that is acquired at a premium you will be deemed to have made an election to amortize bond premium with respect to all debt instruments
having amortizable bond premium that you own or acquire during the year of the election or thereafter, as described below in “— Amortizable Premium.” You should consult with your own tax advisors about this election.
Market Discount
.
If you purchase a debt security for less than the stated redemption price of the debt security at
maturity, if the debt security was issued without OID, or the adjusted issue price, if the debt security was issued with OID, the difference is considered market discount to the extent it exceeds a specified de minimis exception. Under the de
minimis exception, market discount is treated as zero if the market discount is less than 1/4 of one percent of the stated redemption price of the debt security multiplied by the number of complete years to maturity from the date acquired. If you
acquire a debt security at a market discount, you will be required to treat as ordinary income any partial principal payment or gain recognized on the disposition of that debt security to the extent of the market discount which has not previously
been included in your income and is treated as having accrued at the time of the payment or disposition. In addition, you may be required to defer the deduction of a portion of the interest on any indebtedness incurred or maintained to purchase or
carry the debt security until the debt security is disposed of in a taxable transaction, unless you elect to include market discount in income as it accrues.
Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the debt
security, unless you elect to accrue on a constant interest method. You may elect to include market discount in income currently as it accrues on either a ratable or constant interest method, in which case the rule described above regarding deferral
of interest deductions will not apply. This election to include market discount in income currently, once made, applies to all market discount obligations acquired on or after the first taxable year to which the election applies and may not be
revoked without the consent of the IRS.
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Amortizable Premium
.
If you purchase a debt security for an amount in excess of the
sum of all amounts payable on the debt security after the purchase date other than qualified stated interest, you will be considered to have purchased the debt security with amortizable bond premium equal to the amount of that excess. You generally
may elect to amortize the premium using a constant yield method over the remaining term of the debt security. The amount amortized in any year will be treated as a reduction of your interest income from the debt security. If you do not elect to
amortize bond premium, that premium will decrease the gain or increase the loss you would otherwise recognize on disposition of the debt security. This election to amortize premium on a constant yield method will also apply to all debt obligations
you hold or subsequently acquire on or after the first taxable year to which the election applies and may not be revoked without the consent of the IRS.
If you purchase OID debt securities for an amount that is greater than their adjusted issue price but equal to or less than the sum of all
amounts payable on the debt securities after the purchase date other than payments of qualified stated interest, you will be considered to have purchased those debt securities at an “acquisition premium.” Under the acquisition premium
rules, the amount of OID that you must include in gross income with respect to those debt securities for any taxable year will be reduced by the portion of the acquisition premium properly allocable to that year.
Sale, Exchange and Retirement of Debt Securities
.
Your tax basis in the debt securities that you beneficially own will,
in general, be your cost for those debt securities increased by OID and market discount that you previously included in income, and reduced by any amortized premium and any cash payments received with respect to that debt security other than
payments of qualified stated interest.
Upon your sale, exchange, retirement or other taxable disposition of the debt securities, you will
recognize capital gain or loss equal to the difference between the amount you realize upon the sale, exchange, retirement or other disposition (less an amount equal to any accrued and unpaid qualified stated interest that will be taxable as interest
for U.S. federal income tax purposes if not previously taken into income) and your adjusted tax basis in the debt securities. Capital gains of individuals derived in respect of capital assets held for more than one year are eligible for reduced
rates of taxation. The deductibility of capital losses is subject to limitations.
Extendible Debt Securities, Renewable Debt
Securities and Reset Debt Securities
.
If so specified in the prospectus supplement or supplements relating to the debt securities of a series, we or you may have the option to extend the maturity of those debt securities. In addition, we
may have the option to reset the interest rate, the spread or the spread multiplier.
The U.S. federal income tax treatment of a debt
security with respect to which such an option has been exercised is unclear and will depend, in part, on the terms established for such debt securities by us pursuant to the exercise of the option. You may be treated for U.S. federal income tax
purposes as having exchanged your debt securities for new debt securities with revised terms. If this is the case, you would realize gain or loss equal to the difference between the issue price of the new debt securities and your tax basis in the
old debt securities.
If the exercise of the option is not treated as an exchange of old debt securities for new debt securities, you will
not recognize gain or loss as a result of such exchange.
The presence of such options may also affect the calculation of OID, among other
things. Solely for purposes of the accrual of OID, if we issue debt securities and have an option or combination of options to extend the term of those debt securities, we will be presumed to exercise such option or options in a manner that
minimizes the yield on those debt securities. Conversely, if you are treated as having a put option, such an option will be presumed to be exercised in a manner that maximizes the yield on those debt securities. If we exercise such option or options
to extend the term of those debt securities, or your option to put does not occur (contrary to the assumptions made), then solely for purposes of the accrual of OID, those debt securities will be treated as reissued on the date of the change in
circumstances for an amount equal to their adjusted issue price on the date.
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You should carefully examine the prospectus supplement or supplements relating to any such debt
securities, and should consult your own tax advisor regarding the U.S. federal income tax consequences of the holding and disposition of such debt securities.
Information Reporting and Backup Withholding
.
In general, information reporting requirements will apply to certain
payments of principal, premium, if any, redemption price, if any, OID, if any, interest and other amounts paid to you on the debt securities and to the proceeds of sales of the debt securities made to you unless you are an exempt recipient. A backup
withholding tax may apply to such payments if you fail to provide a correct taxpayer identification number or certification of foreign or other exempt status or fail to report in full dividend and interest income.
Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability
provided the required information is timely furnished to the IRS.
Non-U.S. Holders
U.S. Federal Withholding Tax
.
Under the “portfolio interest” rule, the 30% U.S. federal withholding tax will not
apply to any payment of interest, including OID, on the debt securities, provided that:
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interest paid on the debt securities is not effectively connected with your conduct of a trade or business in the United States;
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you do not actually or constructively own 10% or more of the total combined voting power of all classes of our voting stock within the meaning of Section 871(h)(3) of the Code and related U.S. Treasury regulations;
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you are not a controlled foreign corporation that is related to us through stock ownership;
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you are not a bank whose receipt of interest on the debt securities is described in Section 881(c)(3)(A) of the Code;
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the interest is not considered contingent interest under Section 871(h)(4)(A) of the Code and the related U.S. Treasury regulations; and
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you provide your name and address on an IRS Form W-8BEN (or successor form), and certify, under penalty of perjury, that you are not a U.S. person or (2) you hold your debt securities through certain foreign
intermediaries, and you satisfy the certification requirements of applicable U.S. Treasury regulations. Special certification rules apply to certain non-U.S. holders that are pass-through entities rather than corporations or individuals.
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If you cannot satisfy the requirements described above, payments of interest, including OID, made to you will be subject to
the 30% U.S. federal withholding tax (which will be deducted from such interest payments by the paying agent), unless you provide us with a properly executed:
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IRS Form W-8BEN (or successor form) claiming an exemption from or reduction in the rate of withholding under the benefit of an applicable tax treaty; or
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IRS Form W-8ECI (or successor form) stating that interest paid on the debt securities is not subject to withholding tax because it is effectively connected with your conduct of a trade or business in the United States
as discussed below.
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Special certification rules apply to certain non-U.S. holders that are pass-through entities rather
than corporations or individuals. The 30% U.S. federal withholding tax generally will not apply to any payment of principal or gain that you realize on the sale, exchange, retirement or other taxable disposition of any of the debt securities.
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U.S. Federal Income Tax.
If you are engaged in a trade or business in the United States
and interest, including OID, on the debt securities is effectively connected with the conduct of that trade or business, you will be subject to U.S. federal income tax on that interest, including OID, on a net income basis (although you will be
exempt from the 30% withholding tax, provided the certification requirements discussed above are satisfied) in the same manner as if you were a U.S. person as defined in the Code. In addition, if you are a foreign corporation, you may be subject to
a branch profits tax equal to 30% (or lower applicable treaty rate) of your earnings and profits for the taxable year, subject to adjustments, that are effectively connected with the conduct by you of a trade or business in the United States. For
this purpose, interest, including OID, on debt securities will be included in your earnings and profits.
Any gain realized on the
disposition of debt securities generally will not be subject to U.S. federal income tax unless:
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that gain is effectively connected with your conduct of a trade or business in the United States and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment; or
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you are an individual who is present in the United States for 183 days or more in the taxable year of that disposition and certain other conditions are met.
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U.S. Federal Estate Tax
.
Your estate will not be subject to U.S. federal estate tax on the debt securities beneficially
owned by you at the time of your death, provided that any payment to you on the debt securities, including OID, would be eligible for exemption from the 30% U.S. federal withholding tax under the “portfolio interest” rule described above
under “— U.S. Federal Withholding Tax,” without regard to the certification requirement described in the sixth bullet point of that section.
Information Reporting and Backup Withholding
.
Generally, we must report to the IRS and to you the amount of interest,
including OID, on the debt securities paid to you and the amount of tax, if any, withheld with respect to such payments. Copies of the information returns reporting such interest payments and any withholding may also be made available to the tax
authorities in the country in which you reside under the provisions of an applicable income tax treaty.
In general, backup withholding
will not apply to payments that we make or any of our paying agents (in its capacity as such) makes to you if you have provided the required certification that you are a non-U.S. holder as described above and provided that neither we nor any of our
paying agents has actual knowledge or reason to know that you are a U.S. holder (as described above).
In addition, you will not be
subject to backup withholding and information reporting with respect to the proceeds of the sale of debt securities within the United States or conducted through certain U.S.-related financial intermediaries, if the payor receives the certification
described above and does not have actual knowledge or reason to know that you are a U.S. person, as defined under the Code, or you otherwise establish an exemption.
Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability
provided the required information is timely furnished to the IRS.
Additional U.S. Federal Income Tax Withholding Rules
Additional U.S. federal income tax withholding rules apply to certain payments made to foreign financial institutions and certain other
non-U.S. entities. A withholding tax of 30% would apply to the following payments to certain foreign entities unless various withholding and information reporting requirements are satisfied: (i) interest payments and dividends paid after
June 30, 2014, and (ii) the gross proceeds paid on a disposition of our debt securities after December 31, 2016 and the gross proceeds of a disposition of our stock paid after December 31, 2016. For these purposes, a foreign
financial institution generally is defined as any non-U.S. entity that (i) accepts deposits in the ordinary course of a banking or similar business, (ii) as a substantial portion of its business, holds financial assets for the account of
others, or (iii) is engaged or holds itself out as being engaged primarily in the business of investing, reinvesting, or trading in securities, partnership interests, commodities, or any interest in such assets. Prospective investors are urged
to consult their tax advisors regarding the implications of these rules with respect to their investment in our stock and debt securities as well as the status of any related federal regulations.
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PLAN OF DISTRIBUTION
The Company or the selling securityholders may sell the offered securities:
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directly to purchasers,
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directly to its stockholders, or
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through a combination of any of these methods of sale.
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The prospectus supplement relating to
the offered securities will set forth the terms of the offering, including the name or names of any underwriters, dealers or agents, the initial offering price of the offered securities to the public and the proceeds to the Company and/or selling
securityholder from the sale, any underwriting discounts, commissions and other items constituting underwriters’ compensation, and any underwriting discounts, commissions and other allowances and reallowances paid to dealers or agents and any
securities exchanges on which the offered securities may be listed.
The Company or the selling securityholders may use one or more
underwriters in the sale of the offered securities, in which case the offered securities will be acquired by the underwriter or underwriters for their own account and may be resold from time to time in one or more transactions either:
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at a fixed price or prices, which may be changed,
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at market prices prevailing at the time of sale,
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at prices related to the prevailing market prices, or
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The Company or a selling securityholder may directly solicit offers to
purchase offered securities. Agents designated by the Company or a selling securityholder from time to time may also solicit offers to purchase offered securities. Any agent designated by the Company or a selling securityholder, who may be deemed to
be an “underwriter” as that term is defined in the Securities Act, involved in the offer or sale of the offered securities in respect of which this prospectus is delivered will be named, and any commissions payable by the Company or a
selling securityholder to such agent will be set forth, in the prospectus supplement.
If a dealer is utilized in the sale of the offered
securities in respect of which this prospectus and a related prospectus supplement is delivered, the Company or the selling securityholder will sell the offered securities to the dealer, as principal. The dealer, who may be deemed to be an
“underwriter” as that term is defined in the Securities Act, may then resell the offered securities to the public at varying prices to be determined by the dealer at the time of resale.
If an underwriter is, or underwriters are, used in the sale, the Company or a selling securityholder (if any) will execute an underwriting
agreement with the underwriters at the time of sale to the underwriters. The names of the underwriters will be set forth in the prospectus supplement, which, along with this prospectus, will be used by
48
the underwriter to make resales of the offered securities in respect of which this prospectus is delivered to the public. In connection with the sale of offered securities, the underwriter may be
deemed to have received compensation from the Company or the selling securityholder in the form of underwriting discounts or commissions and may also receive commissions from purchasers of offered securities for whom they may act as agents.
Underwriters may also sell offered securities to or through dealers, and the dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as
agents.
If so indicated in the applicable prospectus supplement, the Company or a selling securityholder will authorize underwriters,
dealers or other persons to solicit offers by certain institutions to purchase offered securities from the Company or a selling securityholder at the public offering price set forth in the applicable prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a future date or dates. Institutions with which these contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others. The obligations of any purchasers under any delayed delivery contract will not be subject to any conditions except that:
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the purchase of the offered securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the purchaser is subject, and
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if the offered securities are also being sold to underwriters, the Company or a selling securityholder will have sold to the underwriters the offered securities not sold for delayed delivery.
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The underwriters, dealers and other persons will not have any responsibility in respect of the validity or performance of such contracts. The
prospectus supplement relating to the contracts will set forth the price to be paid for offered securities pursuant to the contracts, the commission payable for solicitation of the contracts and the date or dates in the future for delivery of
offered securities pursuant to the contracts.
Offered securities may also be offered and sold, if so indicated in the prospectus
supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as agents for the
Company or a selling securityholder. Any remarketing firm will be identified and the terms of its agreement, if any, with the Company or a selling securityholder and its compensation will be described in the applicable prospectus supplement.
Remarketing firms may be deemed to be underwriters in connection with their remarketing of offered securities.
Unless otherwise set forth
in the applicable prospectus supplement, the obligations of underwriters to purchase the offered securities will be subject to certain conditions precedent and such underwriters will be obligated to purchase all such securities, if any are
purchased. In connection with the offering of securities, we or the selling securityholder may grant to the underwriters an option to purchase additional securities to cover over-allotments at the initial public offering price, with an additional
underwriting commission, as may be set forth in the accompanying prospectus supplement. If we or the selling securityholder grants any over-allotment option, the terms of such over-allotment option will be set forth in the prospectus supplement for
such securities.
Underwriters, dealers, remarketing firms and agents may be entitled, under agreements that may be entered into with the
Company or a selling securityholder, to indemnification by the Company or a selling securityholder against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which they may be
required to make in respect thereof and may engage in transactions with, or perform services for, the Company or the selling securityholder in the ordinary course of business.
Any underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with
Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum. Short-covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a
49
dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may cause the price of the securities to be higher than
it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.
The anticipated date of delivery
of offered securities will be set forth in the applicable prospectus supplement relating to each offer.
Sales by Selling Securityholders
Selling securityholders may use this prospectus in connection with the resale of securities. The applicable prospectus supplement will identify
the selling securityholders, the securities to be offered by the selling securityholders, the terms of the offering and the terms of the securities. Selling securityholders may be deemed to be underwriters in connection with the securities they
resell and any profits on the sales may be deemed to be underwriting discounts and commissions under the Securities Act. The selling securityholders will receive all the proceeds from the sale of securities. We will not receive any proceeds from
sales by selling securityholders.
The shares of common stock that may be offered and resold by selling securityholders were initially
acquired upon formation of our Company in 2002, in one of several separate private stock purchase transactions with our Company and with other shareholders of our Company ocurring at various times between 2002 and 2013, in a private acquisition by
the Company in 2009, in our initial public offering, which was consummated on April 8, 2013, or pursuant to grants we made to the selling securityholders who were employees of our Company as a part of the compensation we paid them for various
periods. As discussed above under “Description of Outstanding Series A Preferred Stock—Original Issuance,” the shares of our Series A preferred stock that may be offered and resold by one or more selling securityholders were
originally issued by us to the U.S. Treasury in connection with our acquisition by merger of BOH Holdings, Inc. on April 15, 2014 and in exchange for BOH Holdings, Inc.’s series C preferred stock previously held by the U.S. Treasury.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Exchange Act and file annual, quarterly and current reports, proxy statements,
information statements and other information with the SEC. Because our common stock trades on the NASDAQ Global Select Market under the symbol “IBTX,” those materials can also be inspected and copied at the offices of that organization.
Here are ways you can review and obtain copies of this information:
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What is Available
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Where to Get it
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Paper copies of information
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SEC’s Public Reference Room
100 F Street,
N.E.
Washington, D.C. 20549
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NASDAQ Stock Market, Inc. Global Select Market
One Liberty Plaza
165 Broadway
New York, NY 10006
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On-line
information, free of charge
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SEC’s Internet website at
www.sec.gov
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Information about the SEC’s Public Reference Room
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Call the SEC at
1-800-SEC-0330
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We have filed with the SEC a registration statement on
Form S-3
under the Securities Act (File
No. 333-196627),
relating to the securities covered by this prospectus. The registration statement, including the
attached exhibits and schedules, contains additional relevant information about us and the securities. This prospectus does not contain all of the information set forth in the registration statement. Whenever a reference is made in this prospectus
to a contract or other document, the reference is only a summary and you should refer to the exhibits that form a part of the registration statement for a copy of the contract or other document. You can get a copy of the registration statement, at
prescribed rates, from the sources listed above. The registration statement and the documents referred to below under “Incorporation of Certain Documents by Reference” are also available on our Internet website,
www.ibtx.com
. You
can also obtain these documents from us, without charge (other than exhibits, unless the exhibits are specifically incorporated by reference), by requesting them in writing or by telephone at the following address:
1600 Redbud Boulevard, Suite 400
McKinney, Texas 75069-3257
(972)
562-9004
Attention: Jan Webb, Executive Vice President and Secretary
50
THE INFORMATION CONTAINED ON OUR WEBSITE DOES NOT CONSTITUTE A PART OF THIS
PROSPECTUS, PROSPECTUS SUPPLEMENT OR OTHER OFFERING MATERIALS.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” information into this prospectus, which means:
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incorporated documents are considered part of this prospectus;
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we can disclose important information to you by referring you to those documents; and
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information that we file later with the SEC automatically will update and supersede information contained in this prospectus.
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This prospectus incorporates by reference the documents listed below that we have previously filed with the SEC (File No. 001-35854).
These documents contain important information about us:
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our Annual Report on
Form 10-K
for the year ended December 31, 2013, filed with the SEC on March 27, 2014, including the information in our proxy statement that is
part of our Schedule 14A filed with the SEC on April 18, 2014, that is incorporated by reference in that Annual Report on Form
10-K;
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our Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2014, filed with the SEC on May 5, 2014;
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our Current Reports on
Form 8-K
(and any amendments thereto) filed with the SEC on April 17, 2014, May 5, 2014, May 16, 2014, June 3, 2014, June 5, 2014 and June 9,
2014, (other than any portions thereof deemed furnished and not filed in accordance with SEC rules); and
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the description of our common stock contained in our Registration Statement on
Form 8-A,
filed with the SEC on April 2, 2013, and any other amendment or report filed for
the purposes of updating such description.
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We incorporate by reference any additional documents that we may file with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than those furnished pursuant to Item 2.02 or Item 7.01 of
Form 8-K
or other information “furnished” to the
SEC), from the date of the registration statement of which this prospectus is a part until the termination of the offering of the securities. These documents may include annual, quarterly and current reports, as well as proxy statements. Any
material that we later file with the SEC will automatically update and supersede, where appropriate, the information previously filed with the SEC. These documents are available to you without charge. See “Where You Can Find More
Information.”
For purposes of this registration statement, any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated herein by reference modifies or
supersedes such statement in such document.
LEGAL MATTERS
Unless otherwise stated in the applicable prospectus supplement, the validity of our securities offered pursuant to this prospectus and
related prospectus supplements will be passed upon for us by Andrews Kurth LLP, Dallas, Texas, and for the underwriters or agents by counsel named in the applicable prospectus supplement.
51
EXPERTS
The consolidated financial statements of the Company appearing in the Company’s Annual Report on
Form 10-K
for the year ended December 31, 2013, have been audited by McGladrey LLP, an independent registered public accounting firm, as set forth in their report thereon, included therein, and
incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
The December 31, 2013 and 2012 consolidated financial statements of BOH Holdings, Inc., which company was acquired by the Company on
April 15, 2014, and appearing in the Company’s Current Report on Form 8-K/A, filed with the SEC on June 9, 2014, have been audited by Harper & Pearson Company, P.C., an independent public accounting firm, as set forth in
their report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference upon such report given on the authority of such firm as experts in accounting and auditing.
52
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated fees and expenses, other than underwriting discounts and commissions, payable by the Company in connection with the issuance and
distribution of the offered securities as follows:
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SEC Registration Fee
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$
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32,200
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Accounting Fees and Expenses
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40,000
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Legal Fees and Expenses
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300,000
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Printing and Engraving Expenses
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10,000
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Trustees’ and Depositary Fees and Expenses
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20,000
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Miscellaneous Expenses
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10,000
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Total
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$
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412,000
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Item 15. Indemnification of Officers and Directors.
Article VI of the Company’s certificate of formation and Article VI of the Company’s bylaws provide that the Company shall indemnify
any person made a party to or involved in any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person is or was a director or officer of the
Company or is or was serving at the request of the Company as a director or officer of another foreign or domestic association, corporation, partnership, joint venture, trust or other entity, or employee benefit plan (whether such action, suit or
proceeding is based in whole or in part on the sole or contributory gross or ordinary negligence of such person or otherwise).
Article
VII of the Company’s certificate of formation provides that a director of the Company shall not be liable to the Company or its shareholders for monetary damages for an act or omission in the director’s capacity as a director, subject to
certain limitations.
In Article VI of the Company’s certificate of formation and Article VI of the Company’s bylaws, the
Company makes mandatory for directors and officers the indemnification provided for in Section 8.101 of the Texas Business Organizations Code (“TBOC”), which provides that, subject to certain limitations, a corporation may indemnify a
governing person, former governing person, or delegate who was, is, or is threatened to be made a respondent in a proceeding to the extent permitted by Section 8.102 of the TBOC if it is determined in accordance with Section 8.103 of the
TBOC that:
(1) the person:
(A) acted in good faith;
(B)
reasonably believed:
(i) in the case of conduct in the person’s official capacity, that the person’s conduct was in the
corporation’s best interests; and
(ii) in any other case, that the person’s conduct was not opposed to the corporation’s
best interests; and
(C) in the case of a criminal proceeding, did not have a reasonable cause to believe the person’s conduct was
unlawful.
II-1
(2) with respect to expenses, the amount of expenses other than a judgment is reasonable; and
(3) indemnification should be paid.
The Company has entered into indemnification agreements with the members of its board of directors (each an “indemnitee”). Each
indemnification agreement requires the Company to indemnify each indemnitee to the fullest extent permitted by the TBOC and any successor statute thereto when such successor statute becomes applicable to the Company. The Company will also, among
other things, make the indemnitee whole for costs in any action to establish indemnitee’s right to indemnification, whether or not wholly successful.
The Company also maintains directors’ and officers’ liability insurance.
The Amended and Restated Certificate of Formation and Third Amended and Restated Bylaws of the Registrant were previously filed with the SEC
and are incorporated by reference into the registration statement.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
Item 16. Exhibits
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Exhibit Number
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Description
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1.1
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Form of Underwriting Agreement.*
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3.1
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Amended and Restated Certificate of Formation of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 (Registration No. 333-186354) (the “Form S-1
Registration Statement”)).
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3.2
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Certificate of Amendment to Amended and Restated Certificate of Formation of the Registrant (incorporated herein by reference to Exhibit 3.3 to the Form S-1 Registration Statement).
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3.3
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Third Amended and Restated Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.2 to the Form S-1 Registration Statement).
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3.4
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Statement of Designations of Senior Non-Cumulative Perpetual Preferred Stock, Series A of Independent Bank Group, Inc., as filed with the Office of the Secretary of State of the State of Texas on April 15, 2014 (incorporated
herein by reference to Exhibit 3.1 to the Current Report on Form 8-K of Independent Bank Group, Inc., filed with the SEC on April 17, 2014).
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3.5
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Certificate of Merger, dated January 2, 2014, of Live Oak Financial Corp. with and into Independent Bank Group, Inc.****
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3.6
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Certificate of Merger, dated April 15, 2014, of BOH Holdings, Inc. with and into Independent Bank Group, Inc.****
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4.1
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Form of certificate representing shares of the Registrant’s common stock (incorporated herein by reference to Exhibit 4.1 to the Form S-1 Registration Statement).
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4.2
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Form of Common Stock Purchase Warrant, with schedules of differences (incorporated herein by reference to Exhibit 4.2 to the Form S-1 Registration Statement).
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4.3
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Form of certificate representing shares of the Registrant’s Series A preferred stock.**
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4.4
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Form of Preferred Stock Certificate.*
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II-2
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4.5
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Senior Debt Indenture dated June 25, 2014 by and between Independent Bank Group, Inc. and Wells Fargo Bank, National Association, in its capacity as indenture trustee.***
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4.6
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Subordinated Debt Indenture dated June 25, 2014 by and between Independent Bank Group, Inc. and Wells Fargo Bank, National Association, in its capacity as indenture trustee.***
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4.7
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Form of Senior Debt Securities.*
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4.8
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Form of Subordinated Debt Securities.*
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4.9
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Forms of Supplemental Indentures to Establish One or More Series of Senior Debt Securities.*
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4.10
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Forms of Supplemental Indentures to Establish One or More Series of Subordinated Debt Securities.*
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4.11
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Form of Unit Agreement.*
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The other instruments defining the rights of holders of the long-term debt securities of the Registrant and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Registrant hereby agrees
to furnish copies of these instruments to the SEC upon request.
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5.1
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Opinion of Andrews Kurth LLP regarding the legality of the securities being registered.***
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10.1
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Form of Indemnification Agreement for directors and officers (incorporated herein by reference to Exhibit 10.16 to the Form S-1 Registration Statement).
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10.2
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Form of S-Corporation Revocation, Tax Allocation and Indemnification Agreement (incorporated herein by reference to Exhibit 10.17 to the Form S-1 Registration Statement).
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10.3
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2005 Stock Grant Plan, with Form of Notice of Grant Letter Agreement, as amended, and related Form of Notice of Grant Letter Agreement relating to the written compensation contracts (incorporated herein by reference to
Exhibit 10.18 to the Form S-1 Registration Statement).
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10.4
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2012 Stock Grant Plan, with Form of Notice of Grant Letter Agreement (incorporated herein by reference to Exhibit 10.19 to the Form S-1 Registration Statement).
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10.5
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2013 Equity Incentive Plan, with Form of Restricted Stock Award Agreement (incorporated herein by reference to Exhibit 10.20 to the Form S-1 Registration Statement).
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10.6
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Agreement and Plan of Reorganization, dated December 22, 2011, between Independent Bank Group, Inc. and I Bank Holding Company, Inc. (incorporated herein by reference to Exhibit 10.21 to the Form S-1 Registration
Statement).
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10.7
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Agreement and Plan of Reorganization, dated July 2, 2012, between Independent Bank Group, Inc. and The Community Group, Inc. (incorporated herein by reference to Exhibit 10.22 to the Form S-1 Registration Statement).
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10.8
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Purchase and Assumption Agreement, dated June 29, 2012, between Independent Bank and Citizens National Bank (incorporated herein by reference to Exhibit 10.24 to the Form S-1 Registration Statement).
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10.9
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Agreement and Plan of Reorganization by and between Independent Bank Group, Inc. and Collin Bank dated as of July 18, 2013 (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-4
(Registration No. 333-190946).
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II-3
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10.10
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Agreement and Plan of Reorganization by and between Independent Bank Group, Inc. and Live Oak Financial Corp. dated as of August 22, 2013 (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on
Form S-4 (Registration No. 333-191670).
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10.11
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Agreement and Plan of Reorganization, dated as of November 21, 2013, by and among Independent Bank Group, Inc. and BOH Holdings, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company’s Registration Statement
on Form S-4 (Registration No.
333-193373)).
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10.12
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Employment Agreement, dated November 21, 2013, between Independent Bank Group, Inc. and James D. Stein, including related Restricted Stock Grant (incorporated herein by reference to Exhibit 10.28 to the Company’s
Registration Statement on Form S-4 (Registration Statement No.
33-193373)).
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10.13
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Agreement and Plan of Reorganization, dated as of June 2, 2014, by and among Independent Bank Group, Inc. and Houston City Bancshares, Inc. ****
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10.14
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Credit Agreement, dated June 4, 2014, by and among Independent Bank Group, Inc. and U.S. Bank, National Association, and related Revolving Credit Note and Negative Pledge Agreement.****
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12.1
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Computation of Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends.**
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23.1
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Consent of McGladrey LLP.***
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23.2
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Consent of Harper & Pearson Company, P.C.***
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23.3
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Consent of Andrews Kurth LLP (included as part of Exhibit 5.1).
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24.1
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Power of Attorney (included on original signature page to this Registration Statement).
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25.1
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Form T-1 of Trustee for the Senior Debt Indenture.**
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25.2
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Form T-1
of Trustee for the Subordinated Debt Indenture.**
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*
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To be filed, if necessary, by amendment or incorporated by reference to a Current Report on
Form 8-K
in connection with the offering of securities registered hereunder.
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***
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Filed herewith; amended exhibit.
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Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the
Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided,
however, that paragraphs (i), (ii) and (iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule
424(b) that is part of the registration statement.
II-4
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by a Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date
the filed prospectus was deemed part of and included in the registration statement; and
(ii) Each prospectus required to be filed pursuant
to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by
Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that
no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or
made in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of a Registrant
under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser
and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of an undersigned
Registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of an undersigned Registrant or used or referred to by an undersigned Registrant;
(iii) The portion of any other
free writing prospectus relating to the offering containing material information about an undersigned Registrant or its securities provided by or on behalf of an undersigned Registrant; and
(iv) Any other communication that is an offer in the offering made by an undersigned Registrant to the purchaser.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of
Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
II-5
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of each Registrant pursuant to the foregoing provisions, or otherwise, each Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a Registrant of expenses incurred or paid by a director, officer or
controlling person of a Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, that Registrant will, unless in the
opinion of its counsel the has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(d) To file an application for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Securities and Exchange Commission under Section 305(b)(2) of the Trust Indenture Act.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on
Form S-3
and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of McKinney, State of
Texas, on June 25, 2014.
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INDEPENDENT BANK GROUP, INC.
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By:
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/s/ David R. Brooks
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David R. Brooks
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Chairman and Chief Executive Officer
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Pursuant to the requirement of the Securities Act of 1933, this Registration Statement has been
signed below by the following persons in the capacities and on the dates indicated:
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Signature
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Title
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|
Date
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|
/s/ David R. Brooks
David R. Brooks
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|
Chairman, Chief Executive Officer and Director (Principal Executive Officer)
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June 25, 2014
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/s/ Michelle S. Hickox
Michelle S. Hickox
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Executive Vice President and Chief Financial Officer (Principal Financial and Principal Accounting Officer)
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June 25, 2014
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*
Torry
Berntsen
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President, Chief Operating Officer and Director
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June 25, 2014
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*
Daniel W.
Brooks
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Vice Chairman, Chief Risk Officer and Director
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June 25, 2014
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*
James D.
Stein
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Vice Chairman, Houston Region Chief Executive Officer and Director
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June 25, 2014
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II-7
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*
M. Brian
Aynesworth
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Director
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June 25, 2014
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*
Douglas A.
Cifu
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Director
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June 25, 2014
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*
William E.
Fair
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Director
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June 25, 2014
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*
Craig E.
Holmes
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Director
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June 25, 2014
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*
J. Webb
Jennings III
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Director
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June 25, 2014
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*
Donald L.
Poarch
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Director
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June 25, 2014
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*
Jack M.
Radke
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Director
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June 25, 2014
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*
G. Stacy
Smith
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Director
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June 25, 2014
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*
Michael T.
Viola
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Director
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June 25, 2014
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By:
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/s/ David R. Brooks
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David R. Brooks
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Attorney-in-fact
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*
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By David R. Brooks pursuant to the Power of Attorney executed by the directors and officers above, which Power of Attorney has previously been filed with the Securities and Exchange Commission.
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II-8
INDEX TO EXHIBITS
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Exhibit Number
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Description
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1.1
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Form of Underwriting Agreement.*
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3.1
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Amended and Restated Certificate of Formation of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 (Registration No. 333-186354) (the “Form S-1
Registration Statement”)).
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3.2
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Certificate of Amendment to Amended and Restated Certificate of Formation of the Registrant (incorporated herein by reference to Exhibit 3.3 to the Form S-1 Registration Statement).
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3.3
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Third Amended and Restated Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.2 to the Form S-1 Registration Statement).
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3.4
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Statement of Designations of Senior Non-Cumulative Perpetual Preferred Stock, Series A of Independent Bank Group, Inc., as filed with the Office of the Secretary of State of the State of Texas on April 15, 2014 (incorporated
herein by reference to Exhibit 3.1 to the Current Report on Form 8-K of Independent Bank Group, Inc., filed with the SEC on April 17, 2014).
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3.5
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Certificate of Merger, dated January 2, 2014, of Live Oak Financial Corp. with and into Independent Bank Group, Inc.****
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3.6
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Certificate of Merger, dated April 15, 2014, of BOH Holdings, Inc. with and into Independent Bank Group, Inc.****
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4.1
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Form of certificate representing shares of the Registrant’s common stock (incorporated herein by reference to Exhibit 4.1 to the Form S-1 Registration Statement).
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4.2
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Form of Common Stock Purchase Warrant, with schedules of differences (incorporated herein by reference to Exhibit 4.2 to the Form S-1 Registration Statement).
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4.3
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|
Form of certificate representing shares of the Registrant’s Series A preferred stock.**
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4.4
|
|
Form of Preferred Stock Certificate.*
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4.5
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|
Senior Debt Indenture dated June 25, 2014 by and between Independent Bank Group, Inc. and Wells Fargo Bank, National Association, in its capacity as indenture trustee.***
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4.6
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Subordinated Debt Indenture dated June 25, 2014 by and between Independent Bank Group, Inc. and Wells Fargo Bank, National Association, in its capacity as indenture trustee.***
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4.7
|
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Form of Senior Debt Securities.*
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4.8
|
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Form of Subordinated Debt Securities.*
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4.9
|
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Forms of Supplemental Indentures to Establish One or More Series of Senior Debt Securities.*
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4.10
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|
Forms of Supplemental Indentures to Establish One or More Series of Subordinated Debt Securities.*
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4.11
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Form of Unit Agreement.*
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The other instruments defining the rights of holders of the long-term debt securities of the Registrant and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Registrant hereby agrees
to furnish copies of these instruments to the SEC upon request.
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5.1
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Opinion of Andrews Kurth LLP regarding the legality of the securities being registered.***
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10.1
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Form of Indemnification Agreement for directors and officers (incorporated herein by reference to Exhibit 10.16 to the Form S-1 Registration Statement).
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10.2
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Form of S-Corporation Revocation, Tax Allocation and Indemnification Agreement (incorporated herein by reference to Exhibit 10.17 to the Form S-1 Registration Statement).
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10.3
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2005 Stock Grant Plan, with Form of Notice of Grant Letter Agreement, as amended, and related Form of Notice of Grant Letter Agreement relating to the written compensation contracts (incorporated herein by reference to
Exhibit 10.18 to the Form S-1 Registration Statement).
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10.4
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2012 Stock Grant Plan, with Form of Notice of Grant Letter Agreement (incorporated herein by reference to Exhibit 10.19 to the Form S-1 Registration Statement).
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10.5
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2013 Equity Incentive Plan, with Form of Restricted Stock Award Agreement (incorporated herein by reference to Exhibit 10.20 to the Form S-1 Registration Statement).
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10.6
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Agreement and Plan of Reorganization, dated December 22, 2011, between Independent Bank Group, Inc. and I Bank Holding Company, Inc. (incorporated herein by reference to Exhibit 10.21 to the Form S-1 Registration
Statement).
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10.7
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Agreement and Plan of Reorganization, dated July 2, 2012, between Independent Bank Group, Inc. and The Community Group, Inc. (incorporated herein by reference to Exhibit 10.22 to the Form S-1 Registration
Statement).
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10.8
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Purchase and Assumption Agreement, dated June 29, 2012, between Independent Bank and Citizens National Bank (incorporated herein by reference to Exhibit 10.24 to the Form S-1 Registration Statement).
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10.9
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Agreement and Plan of Reorganization by and between Independent Bank Group, Inc. and Collin Bank dated as of July 18, 2013 (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-4
(Registration No. 333-190946).
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10.10
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Agreement and Plan of Reorganization by and between Independent Bank Group, Inc. and Live Oak Financial Corp. dated as of August 22, 2013 (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on
Form S-4 (Registration No. 333-191670).
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10.11
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Agreement and Plan of Reorganization, dated as of November 21, 2013, by and among Independent Bank Group, Inc. and BOH Holdings, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company’s Registration Statement
on Form S-4 (Registration No.
333-193373)).
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10.12
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Employment Agreement, dated November 21, 2013, between Independent Bank Group, Inc. and James D. Stein, including related Restricted Stock Grant (incorporated herein by reference to Exhibit 10.28 to the Company’s
Registration Statement on Form S-4 (Registration Statement
No. 33-193373)).
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10.13
|
|
Agreement and Plan of Reorganization, dated as of June 2, 2014, by and among Independent Bank Group, Inc. and Houston City Bancshares, Inc. ****
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10.14
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Credit Agreement, dated June 4, 2014, by and among Independent Bank Group, Inc. and U.S. Bank, National Association, and related Revolving Credit Note and Negative Pledge Agreement.****
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12.1
|
|
Computation of Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends.**
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23.1
|
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Consent of McGladrey LLP.***
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23.2
|
|
Consent of Harper & Pearson Company, P.C.***
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23.3
|
|
Consent of Andrews Kurth LLP (included as part of Exhibit 5.1).
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24.1
|
|
Power of Attorney (included on original signature page to this Registration Statement).
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25.1
|
|
Form T-1 of Trustee for the Senior Debt Indenture.**
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|
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25.2
|
|
Form T-1
of Trustee for the Subordinated Debt Indenture.**
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|
*
|
To be filed, if necessary, by amendment or incorporated by reference to a Current Report on
Form 8-K
in connection with the offering of securities registered hereunder.
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|
***
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Filed herewith; amended exhibit.
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Exhibit 3.5
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|
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|
|
CERTIFICATE OF MERGER
OF
LIVE OAK FINANCIAL
CORP
with and into
INDEPENDENT BANK GROUP, INC
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Pursuant to the provisions of Chapter 10 of the Texas Business Organizations Code (the
“
TBOC
”) Independent Bank Group, Inc (“
IBG
”) and Live Oak Financial Corp (“
LOFC
”) (together with IBG, the “
Merging Parties
”) certify the following certificate of merger was adopted
for the purpose of effecting a merger in accordance with Chapter 10 of the TBOC (the “
Merger
”)
1
Parties to the
Merger
The name, organizational form, state of incorporation, and secretary of state file number of each corporation that is a party to the Merger are as follows
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Name of Parent Corporation
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|
Entity Type
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|
State of
Organization
|
|
Texas SOS
File Number
|
|
Surviving
Entity
|
|
|
|
|
|
|
|
Independent Bank Group, Inc
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|
For profit corporation
|
|
Texas
|
|
800125042
|
|
Yes
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Name of Subsidiary Corporation
|
|
Entity Type
|
|
State of
Organization
|
|
Texas SOS
File Number
|
|
Surviving
Entity
|
|
|
|
|
|
|
|
Live Oak Financial Corp
|
|
For profit corporation
|
|
Texas
|
|
162219900
|
|
No
|
2 The number of outstanding shares of each class of stock of the subsidiary corporation and the number of
shares of each class owned by the parent corporation are as follows
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|
Name of Subsidiary Corporation
|
|
Designation of Class
|
|
Number of
Shares
Outstanding
|
|
|
Number of Shares
Owned by the Parent
Corporation
|
|
|
|
|
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|
Live Oak Financial Corp
|
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Common
|
|
|
1,000
|
|
|
|
1,000 (100
|
%)
|
3 Attached hereto as
Exhibit ‘A”
is a true and correct copy of the resolutions adopted by the
Board of Directors of IBG, the parent corporation, on December 12 2013, authorizing the merger of LOFC into IBG The attached resolutions were adopted and approved by the governing authority of the parent corporation as required by the laws of
its jurisdiction of formation and by its governing documents
1
4
Organizations Created by Merger
No new domestic corporation or other entity will
be created pursuant to the Agreement
5
Tax Certificate
IBG, as the surviving corporation, will be responsible for and
obligated to pay all fees and franchise taxes of each Merging Party
6
Effectiveness of Filing
The Merger shall become
effective as of 12 02 a m, Dallas, Texas time, January 1, 2014, in accordance with the provisions of the IBOC
[Signature Page to
Follow]
2
Execution
The undersigned signs this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument
The undersigned certifies that the statements contained herein are true and correct, and that the person signing is authorized under the provisions of the Business Organizations Code, or other law applicable to and governing the parent organization,
to execute the filing instrument.
Date: December 18, 2013
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|
|
INDEPENDENT BANK GROUP, INC
|
|
|
|
|
By
|
|
|
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|
|
|
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David R Brooks
|
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Chairman of the Board and CEO
|
Signature Page to Certificate of Merger
RESOLUTIONS OF BOARD OF DIRECTORS
OF INDEPENDENT BANK GROUP, INC. APPROVING THE
MERGER OF LIVE OAK FINANCIAL CORP.
WITH AND INTO
INDEPENDENT BANK GROUP, INC
WHEREAS
, Independent Bank Group, Inc (“
IBG
”) is a corporation duly organized and existing under the laws of the State
of Texas, and
WHEREAS
, Live Oak Financial Corp will be the surviving corporation in the merger of IBGLO Acquisition Corporation
(
IBGLO
”) with and into LOFC (the ‘
LOFC Merger
”) and, as a result of the LOFC Merger, will continue to be a corporation duly organized and existing under the laws of the State of Texas, with authorized capital consisting
solely of 1,000 shares of common stock, $1 00 par value per share, (the “
LOFC Stock
”), of which 1,000 shares are issued and outstanding, and
WHEREAS
, as a result of the LOFC Merger, IBG will own 1,000 shares, or 100 percent, of the issued and outstanding shares of LOFC Stock,
and
WHEREAS
, the Board of Directors (the “
Board
”) of IBG considers it to be in the best interests of IBG to merge
(the ‘
Affiliate Merger
”) LOFC with and into IBG, under the title of ‘Independent Bank Group, Inc”, and
WHEREAS
, Section 10 006 of the Texas Business Organizations Code (the “
TBOC
’) permits a corporation that owns at
least 90 percent of the outstanding shares of each class of the stock of another corporation to merge the other corporation into itself, and
WHEREAS
, the Board of IBG considers it to be in the best interests of IBG to merge LOFC with and into IBG under the Certificate of
Formation of IBG and with the name “Independent Bank Group, Inc”, pursuant to Section 10 006 of the TBOC upon the terms and subject to the conditions set forth herein, and
1
WHEREAS
, the Board of IBG desires to take any and all actions that may be necessary or
appropriate to consummate the Affiliate Merger, and
WHEREAS
, it is not necessary to obtain the approval of the shareholders of IBG
for such Affiliate Merger
NOW, THEREFORE, BE IT RESOLVED
, that the Board of IBG hereby authorizes IBG to merge LOFC into IBG
pursuant to Section 10 006 of the TBOC, and IBG does hereby have LOFC merge into IBG, with IBG being the corporation surviving the Affiliate Merger, to be effective at 12 02 am on January 1, 2014 or such later time and date (the
“
Effective Time
’) as the management of IBG deems to be in the best interests of IBG
FURTHER RESOLVED
, that the
officers and directors of IBG consummate such Affiliate Merger as soon as practicable following consummation of the transactions contemplated by that certain Agreement and Plan of Reorganization, dated as of August 22, 2013, 2013, by and
between IBG and LOFC, providing for the LOFC Merger
FURTHER RESOLVED
, that IBG shall be the corporation surviving the Affiliate
Merger (the “
Surviving Corporation
”) and its name shall continue to be “Independent Bank Group Inc” and that the established offices and locations of IBGLO and IBG shall be the offices and locations of the Surviving
Corporation
FURTHER RESOLVED
, that, at the Effective Time, the Certificate of Formation and the Bylaws of IBG shall be and remain
the Certificate of Formation and Bylaws of the Surviving Corporation, until such Certificate of formation or Bylaws arc amended, altered or repealed as provided by law
FURTHER RESOLVED
, that the directors and officers of IBG immediately prior to the Effective Time shall continue to serve as the
directors and officers of the Surviving Corporation, and each of them, subject to the Bylaws of the Surviving Corporation and the laws of the State of Texas, shall serve until his successor is elected or appointed and qualified or until his earlier
death, incapacity resignation or removal
FURTHER RESOLVED
, that, at the Effective Time IBG shall receive all of the property,
rights, privileges, franchises, patents, trademarks, trade names, licenses, registrations and other assets of every kind and description of IBGLO, such assets shall be vested in and devolve upon IBG without further act and deed, and IBG shall assume
all the liabilities of every kind and description of IBGLO
FURTHER RESOLVED
, that the Chairman of the Board, the President, any
Vice President and the Secretary or Treasurer of IBG be, and they hereby are, authorized, empowered and directed to make execute and deliver the Certificate of Merger setting forth a copy of these resolutions and the date of adoption thereof, and to
file the same in the office of the Secretary of State of the State of Texas
2
FURTHER RESOLVED
, that such officers of IBG be, and they hereby are, authorized, empowered
and directed, for, on behalf of and in the name of IBG to make, execute, acknowledge and deliver any and all instruments, agreements, documents and certificates, and do and perform all necessary acts and deeds to carry out the Affiliate Merger into
full force and effect, including, without limitation the delegation of authority to execute any such instruments, agreements, documents and certificates and perform any such acts to any employee of IBG and such agreements, documents and acts are
hereby approved, authorized and adopted as duly authorized acts of IBG in all respects and for all purposes
FURTHER RESOLVED
, that
all previous action taken or agreements entered into by the officers, directors or representatives of IBG on behalf of IBG in negotiating or carrying out the Affiliate Merger into full force and effect are hereby ratified, confirmed, approved and
adopted as duly authorized acts of IBG in all respects and for all purposes
3
Exhibit 3.6
|
|
|
|
|
|
|
|
|
CERTIFICATE OF MERGER
OF
BOH HOLDINGS, INC.
with and into
INDEPENDENT BANK GROUP, INC.
|
|
|
Pursuant to the provisions of Chapter 10 of the Texas Business Organizations Code (the
“
TBOC
”) Independent Bank Group, Inc. (“
IBG
”) and BOH Holdings, Inc. (“
BOHI
”) (together with IBG, the “
Merging Parties
”) certify the following certificate of merger was adopted for
the purpose of effecting a merger in accordance with Chapter 10 of the TBOC (the “
Merger
”).
1.
Parties to the
Merger
. The name, organizational form, state of incorporation, and secretary of state file number of each corporation that is a party to the Merger are as follows:
|
|
|
|
|
|
|
|
|
|
|
Name of Merging Party
|
|
Entity Type
|
|
State of
Organization
|
|
Texas SOS
Filing Number
|
|
Surviving
Entity
|
|
Independent Bank Group, Inc.
|
|
For profit corporation
|
|
Texas
|
|
800125042
|
|
Yes
|
|
BOH Holdings, Inc.
|
|
For profit corporation
|
|
Texas
|
|
801004423
|
|
No
|
2.
Plan of Merger
. An Agreement and Plan of Reorganization (the “
Agreement
”)
was approved and adopted in accordance with Chapter 10 of the TBOC providing for the combination of IBG and BOHI and resulting in IBG being the surviving entity in the Merger, An executed copy of the Agreement is on file at the principal place of
business of IBG, at 1600 Redbud Blvd., Suite 400, McKinney, Texas 75069, and a copy of the Agreement will be furnished by such entity, on written request and without cost, to any shareholder of each domestic corporation that is a party to the
Agreement and to any creditor or obligee of the parties to the Merger at the time of the Merger if such obligations are then outstanding.
3.
Amendments
. In accordance with the Agreement, from and after the date hereof, the Certificate of Formation and Bylaws of IBG
shall continue in effect as the Certificate of Formation and the Bylaws of the surviving entity until amended in accordance with applicable law. No amendments to the Certificate of Formation will be effected by the Merger.
4.
Organizations Created by Merger
. No new domestic corporation or other entity will be created pursuant to the Agreement.
5.
Approval of the Agreement
. The Agreement and the performance of its terms were duly authorized by all action required by the
laws under which each corporation was incorporated and by each corporation’s constituent documents.
6.
Tax
Certificate
. IBG, as the surviving corporation, will be responsible for and obligated to pay all fees and franchise taxes of each Merging Party,
7.
Effectiveness of Filing
. The Merger shall become effective as of 3:00 p.m.,
Texas time, April 15, 2014, in accordance with the provisions of the TBOC.
[Signature Page to Follow]
2
Execution
The undersigned sign this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument.
The undersigned certify that the statements contained herein are true and correct, and that the persons signing are authorized under the provisions of the TBOC, or other law applicable to and governing the merging entity, to execute the filing
instrument.
Date: Effective as of April 15, 2014
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INDEPENDENT BANK GROUP, INC.
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BOH HOLDINGS, INC.
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By:
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By:
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David R. Brooks
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James D, Stein
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Chairman of the Board and CEO
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President and CEO
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Signature Page to Certificate of Merger
3
Execution
The undersigned sign this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument.
The undersigned certify that the statements contained herein are true and correct, and that the persons signing are authorized under the provisions of the TBOC, or other law applicable to and governing the merging entity, to execute the filing
instrument.
Date: Effective as of April 15, 2014
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INDEPENDENT BANK GROUP, INC.
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BOH HOLDINGS, INC.
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By:
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By:
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David R. Brooks
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James D. Stein
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Chairman of the Board and CEO
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President and CEO
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Signature Page to Certificate of Merger
3
Exhibit 4.5
INDEPENDENT BANK GROUP, INC.,
Issuer
to
WELLS FARGO
BANK, NATIONAL ASSOCIATION,
Trustee
SENIOR DEBT INDENTURE
Dated as of June 25, 2014
Senior Debt Securities
Reconciliation and tie between
Trust Indenture Act of 1939 (the “
Trust Indenture Act
”) and Indenture
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Trust Indenture Act Section
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Indenture
Section
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§310(a)(1)
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608
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(a)(2)
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608
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(b)
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609
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§312(a)
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701
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(b)
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702
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(c)
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702
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§313(a)
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703
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(b)(2)
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703
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(c)
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703
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(d)
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703
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§314(a)
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704
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(c)(1)
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102
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(c)(2)
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102
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(e)
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102
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§315(b)
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603
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(e)
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515
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§316(a) (last sentence)
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101
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(a)(1)(A)
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502, 512
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(a)(1)(B)
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513
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(b)
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508
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§317(a)(1)
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503
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(a)(2)
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504
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(b)
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1003
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§318(a)
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108
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Note:
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This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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1
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Section 101.
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Definitions.
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1
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Section 102.
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Compliance Certificates and Opinions.
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7
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Section 103.
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Form of Documents Delivered to Trustee.
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7
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Section 104.
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Acts of Holders.
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7
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Section 105.
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Notices, etc. to Trustee and Company.
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8
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Section 106.
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Notice to Holders of Securities; Waiver.
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9
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Section 107.
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Language of Notices.
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9
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Section 108.
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Conflict with Trust Indenture Act.
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9
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Section 109.
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Effect of Headings and Table of Contents.
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9
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Section 110.
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Successors and Assigns.
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9
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Section 111.
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Separability Clause.
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9
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Section 112.
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Benefits of Indenture.
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9
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Section 113.
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Governing Law.
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10
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Section 114.
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Legal Holidays.
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10
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Section 115.
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Counterparts; Electronic Transmission.
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10
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Section 116.
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Immunity of Shareholders, Directors, Officers and Agents of the Company.
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10
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Section 117.
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Waiver of Jury Trial.
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10
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Section 118.
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Force Majeure.
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10
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ARTICLE TWO SECURITIES FORMS
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11
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Section 201.
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Forms Generally.
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11
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Section 202.
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Form of Trustee’s Certificate of Authentication.
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11
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Section 203.
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Securities in Global Form.
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11
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ARTICLE THREE THE SECURITIES
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12
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Section 301.
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Amount Unlimited; Issuable in Series.
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12
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Section 302.
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Currency; Denominations.
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15
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Section 303.
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Execution, Authentication, Delivery and Dating.
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15
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Section 304.
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Temporary Securities.
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16
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Section 305.
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Registration, Transfer and Exchange.
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17
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Section 306.
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Mutilated, Destroyed, Lost and Stolen Securities.
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19
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Section 307.
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Payment of Interest; Rights to Interest Preserved.
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19
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Section 308.
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Persons Deemed Owners.
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20
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Section 309.
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Cancellation.
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20
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Section 310.
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Computation of Interest.
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21
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ARTICLE FOUR SATISFACTION AND DISCHARGE OF INDENTURE
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21
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Section 401.
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Satisfaction and Discharge.
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21
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Section 402.
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Defeasance and Covenant Defeasance.
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22
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Section 403.
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Application of Trust Money.
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24
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Section 404.
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Reinstatement.
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24
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i
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ARTICLE FIVE REMEDIES
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25
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Section 501.
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Events of Default.
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25
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Section 502.
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Acceleration of Maturity; Rescission and Annulment.
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26
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Section 503.
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Collection of Indebtedness and Suits for Enforcement by Trustee.
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27
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Section 504.
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Trustee May File Proofs of Claim.
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28
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Section 505.
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Trustee May Enforce Claims Without Possession of Securities.
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28
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Section 506.
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Application of Money Collected.
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28
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Section 507.
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Limitation on Suits.
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29
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Section 508.
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Unconditional Right of Holders to Receive Principal, Premium and Interest.
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29
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Section 509.
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Restoration of Rights and Remedies.
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29
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Section 510.
|
|
Rights and Remedies Cumulative.
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29
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Section 511.
|
|
Delay or Omission Not Waiver.
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30
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Section 512.
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Control by Holders.
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30
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Section 513.
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Waiver of Past Defaults.
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30
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Section 514.
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|
Waiver of Usury, Stay or Extension Laws.
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30
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Section 515.
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Undertaking for Costs.
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30
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ARTICLE SIX THE TRUSTEE
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31
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Section 601.
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Duties of Trustee.
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31
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Section 602.
|
|
Certain Rights of Trustee.
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31
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Section 603.
|
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Notice of Defaults.
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32
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Section 604.
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Not Responsible for Recitals or Issuance of Securities.
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33
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Section 605.
|
|
May Hold Securities.
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33
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Section 606.
|
|
Money Held in Trust.
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33
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Section 607.
|
|
Compensation and Reimbursement.
|
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33
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Section 608.
|
|
Corporate Trustee Required; Eligibility.
|
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34
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|
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|
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|
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Section 609.
|
|
Resignation and Removal; Appointment of Successor.
|
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|
34
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Section 610.
|
|
Acceptance of Appointment by Successor.
|
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35
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Section 611.
|
|
Merger, Conversion, Consolidation or Succession to Business.
|
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36
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Section 612.
|
|
Appointment of Authenticating Agent.
|
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36
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|
ARTICLE SEVEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
|
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38
|
|
|
|
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|
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Section 701.
|
|
Company to Furnish Trustee Names and Addresses of Holders.
|
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38
|
|
|
|
|
|
|
Section 702.
|
|
Preservation of Information; Communications to Holders.
|
|
|
38
|
|
|
|
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|
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Section 703.
|
|
Reports by Trustee.
|
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|
38
|
|
|
|
|
|
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Section 704.
|
|
Reports by Company.
|
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38
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|
ARTICLE EIGHT CONSOLIDATION, MERGER AND SALES
|
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|
39
|
|
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|
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|
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Section 801.
|
|
Company May Consolidate, Etc., Only on Certain Terms.
|
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39
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Section 802.
|
|
Successor Person Substituted for Company.
|
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40
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|
|
ARTICLE NINE SUPPLEMENTAL INDENTURES
|
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|
40
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|
|
|
|
|
|
Section 901.
|
|
Supplemental Indentures without Consent of Holders.
|
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40
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|
|
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Section 902.
|
|
Supplemental Indentures with Consent of Holders.
|
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42
|
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|
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Section 903.
|
|
Execution of Supplemental Indentures.
|
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42
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|
ii
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Section 904.
|
|
Effect of Supplemental Indentures.
|
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43
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|
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Section 905.
|
|
Reference in Securities to Supplemental Indentures.
|
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|
43
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|
|
|
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|
|
Section 906.
|
|
Conformity with Trust Indenture Act.
|
|
|
43
|
|
|
|
|
|
ARTICLE TEN COVENANTS
|
|
|
43
|
|
|
|
|
|
|
Section 1001.
|
|
Payment of Principal, Premium, Interest.
|
|
|
43
|
|
|
|
|
|
|
Section 1002.
|
|
Maintenance of Office or Agency.
|
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43
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Section 1003.
|
|
Money for Securities Payments to Be Held in Trust.
|
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44
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Section 1004.
|
|
Corporate Existence.
|
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45
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Section 1005.
|
|
Maintenance of Properties.
|
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45
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|
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Section 1006.
|
|
Waiver of Certain Covenants.
|
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|
45
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|
|
|
|
|
|
Section 1007.
|
|
Company Statement as to Compliance.
|
|
|
46
|
|
|
|
|
|
ARTICLE ELEVEN REDEMPTION OF SECURITIES
|
|
|
46
|
|
|
|
|
|
|
Section 1101.
|
|
Applicability of Article.
|
|
|
46
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|
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Section 1102.
|
|
Election to Redeem; Notice to Trustee.
|
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|
46
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|
|
|
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Section 1103.
|
|
Selection by Trustee of Securities to be Redeemed.
|
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|
46
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|
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|
|
Section 1104.
|
|
Notice of Redemption.
|
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|
47
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|
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Section 1105.
|
|
Deposit of Redemption Price.
|
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|
48
|
|
|
|
|
|
|
Section 1106.
|
|
Securities Payable on Redemption Date.
|
|
|
48
|
|
|
|
|
|
|
Section 1107.
|
|
Securities Redeemed in Part.
|
|
|
48
|
|
|
|
|
|
ARTICLE TWELVE SINKING FUNDS
|
|
|
49
|
|
|
|
|
|
|
Section 1201.
|
|
Applicability of Article.
|
|
|
49
|
|
|
|
|
|
|
Section 1202.
|
|
Satisfaction of Sinking Fund Payments with Securities.
|
|
|
49
|
|
|
|
|
|
|
Section 1203.
|
|
Redemption of Securities for Sinking Fund.
|
|
|
49
|
|
|
|
|
|
ARTICLE THIRTEEN [RESERVED]
|
|
|
50
|
|
|
|
|
|
ARTICLE FOURTEEN MEETINGS OF HOLDERS OF SECURITIES
|
|
|
50
|
|
|
|
|
|
|
Section 1401.
|
|
Purposes for Which Meetings May Be Called.
|
|
|
50
|
|
|
|
|
|
|
Section 1402.
|
|
Call, Notice and Place of Meetings.
|
|
|
50
|
|
|
|
|
|
|
Section 1403.
|
|
Persons Entitled to Vote at Meetings.
|
|
|
50
|
|
|
|
|
|
|
Section 1404.
|
|
Quorum; Action.
|
|
|
50
|
|
|
|
|
|
|
Section 1405.
|
|
Determination of Voting Rights; Conduct and Adjournment of Meetings.
|
|
|
51
|
|
|
|
|
|
|
Section 1406.
|
|
Counting Votes and Recording Action of Meetings.
|
|
|
52
|
|
iii
SENIOR DEBT INDENTURE, dated as of June , 2014 (the
“
Indenture
”), between Independent Bank Group, Inc., a corporation duly organized and existing under the laws of the State of Texas (hereinafter called the “
Company
”), having its principal executive office located at
1600 Redbud Blvd., Suite 400, McKinney, Texas 75069, and Wells Fargo Bank, National Association, a national banking association duly organized and existing under the laws of the United States (hereinafter called the “
Trustee
”).
RECITALS
The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its senior, unsecured debt securities (hereinafter called the
“Securities”), unlimited as to principal amount, to bear such rates of interest, to mature at such time or times, to be issued in one or more Series and to have such other provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this Indenture. All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder that are required to be part of this Indenture and, to the extent applicable, shall be governed by such
provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders (as herein defined) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or the Securities of any Series as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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Section 101.
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Definitions.
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Except as
otherwise expressly provided in or pursuant to this Indenture or unless the context otherwise requires, for all purposes of this Indenture:
(1) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular;
(2) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP;
(4) the words “herein,” “hereof,” “hereto” 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;
(5) the word “or” is always used inclusively (for example, the phrase “A or B” means “A or B or both,” not “either A or B but not both”);
(6) provisions apply to successive events and transactions;
(7) the term “merger” includes a statutory share exchange and the terms “merge” and “merged” have correlative meanings;
(8) the masculine gender includes the feminine and the neuter; and
(9) references to agreements and other instruments include subsequent amendments and supplements thereto.
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Certain terms used principally in certain Articles hereof are defined in those Articles.
“
Act
,” when used with respect to any Holders, has the meaning specified in
Section 104
.
“
Affiliate
” means, with respect to any specified Person, 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.
“
Authenticating Agent
” means any Person authorized by the Trustee pursuant to
Section 612
to act on behalf
of the Trustee to authenticate Securities of one or more Series.
“
Authorized Newspaper
” means a newspaper,
in an official language of the place of publication or in the English language, customarily published on each day that is a Business Day in the place of publication, whether or not published on days that are not Business Days in the place of
publication, and of general circulation in each place in connection with which the term is used or in the financial community of each such place. Where successive publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same place meeting the foregoing requirements and in each case on any day that is a Business Day in the place of publication.
“
Authorized Officer
” means each of the Chairman of the Board, the Chief Executive Officer, the President, and the
Executive Vice President and Chief Financial Officer of the Company.
“
Board of Directors
” means the board of
directors of the Company or any committee of that board duly authorized to act generally or in any particular respect for the Company hereunder. The term “board of directors” means the board of directors of the Company and does not include
committees of the board of directors.
“
Board Resolution
” means one or more resolutions, 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, delivered to the Trustee.
“
Business Day
” means, unless otherwise specified with respect to the Securities of any Series pursuant to
Section 301
, any day other than a Saturday, Sunday or other day on which banking institutions in the City of Dallas, Texas, or The City of New York, New York, are authorized or obligated by law, regulation or executive order to close;
provided that such term shall mean, when used with respect to any payment of principal of, or premium or interest, if any, on, the Securities of any Series to be made at any Place of Payment for such Securities, unless otherwise specified pursuant
to
Section 301
with respect to such Securities, any day other than a Saturday, Sunday or other day on which banking institutions in such Place of Payment are authorized or obligated by law, regulation or executive order to close.
“
Commission
” means the Securities and Exchange Commission, as from time to time constituted, 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 Stock
” includes the Company common stock, par value $0.01 per share, and any other authorized stock of any class
of the Company that has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, termination or winding up of the Company and that is not subject to redemption by the Company.
“
Company
” means the Person named as the “Company” in the first paragraph of this instrument until a successor
Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person and any other obligor upon the Securities.
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“
Company Request
” and “
Company Order
” mean, respectively,
a written request or order, as the case may be, signed in the name of the Company by an Authorized Officer and by the Secretary of the Company, and delivered to the Trustee.
“
Corporate Trust Office
” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at
Dallas, Texas, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may
designate from time to time by notice to the Holders and the Company).
“
corporation
” includes corporations,
partnerships, associations, limited liability companies and other companies, statutory trusts and business trusts.
“
Currency
,” with respect to any payment, deposit or other transfer in respect of the principal of or any premium or
interest on any Security, means Dollars.
“
CUSIP number
” means the alphanumeric designation assigned to a
Security by Standard & Poor’s, CUSIP Service Bureau.
“
Dallas, Texas Banking Day
” means any day
except a Saturday, Sunday or a legal holiday in the City of Dallas, Texas, or a day on which banking institutions in the City of Dallas, Texas, are authorized or obligated by law, regulation or executive order to be closed.
“
Defaulted Interest
” has the meaning specified in
Section 307
.
“
Depositary
” means, with respect to any Security issuable or issued in the form of one or more global Securities, the
Person designated as depositary by the Company in or pursuant to this Indenture, and, unless otherwise provided with respect to any Security, any successor to such Person. If at any time there is more than one such Person, “Depositary”
shall mean, with respect to any Securities, the depositary that has been appointed with respect to such Securities.
“
Dollars
” or “
$
” means a dollar or other equivalent unit of legal tender for payment of public or
private debts in the United States of America.
“
Event of Default
” has the meaning specified in
Section 501
.
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended, or any
successor statute thereto, together with all rules and regulations promulgated thereunder, in each case as amended from time to time.
“
GAAP
” and “generally accepted accounting principles” mean, unless otherwise specified with respect to any Series of Securities pursuant to
Section 301
, such
accounting principles as are generally accepted in the United States of America as of the date or time of any computation required hereunder.
“
Government Obligations
” means securities which are (i) direct obligations of the United States of America in each case where the payment or payments thereunder are supported by the
full faith and credit of the United States of America, or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or such other government or governments, in each case
where the timely payment or payments thereunder are unconditionally guaranteed as a full faith and credit obligation by the United States of America, and which, in the case of (i) or (ii), are denominated in, and the principal of and interest
on such securities are payable in, Dollars and are not callable or redeemable at the option of the issuer or issuers thereof.
“
Holder
,” in the case of any Security, means the Person in whose name such Security is registered in the Security
Register.
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“
Indenture
” means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and, with respect to any Security, by the terms and provisions of such Security established pursuant to
Section 301
(as such terms and provisions may be amended pursuant to the applicable provisions hereof), provided, however, that, if at any time more than one Person is acting as Trustee under this instrument, “Indenture” shall
mean, with respect to any one or more Series of Securities for which such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into
pursuant to the applicable provisions hereof and shall include the terms of those particular Series of Securities for which such Person is Trustee established pursuant to
Section 301
, exclusive, however, of any provisions or terms which
relate solely to other Series of Securities for which such Person is not Trustee, regardless of when such terms or provisions were adopted.
“
Indexed Security
” means a Security the terms of which provide that the principal amount thereof payable at Stated Maturity may be more or less than the principal face amount thereof at
original issuance.
“
interest
,” with respect to any Original Issue Discount Security which by its terms bears
interest only after Maturity, means interest payable after Maturity.
“
Interest Payment Date
,” with respect
to any Security, means the Stated Maturity of an installment of interest on such Security.
“
Maturity
,” with
respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as provided in or pursuant to this Indenture or such Security, whether at the Stated Maturity or by an
acceleration of the maturity of such Security in accordance with the terms of such Security, upon redemption at the option of the Company, upon repurchase or repayment at the option of the Holder or otherwise, and includes a Redemption Date for such
Security and a date fixed for the repurchase or repayment of such Security at the option of the Holder.
“
Office
” or “
Agency
,” with respect to any Securities, means an office or agency of the Company
maintained or designated in a Place of Payment for such Securities pursuant to
Section 1002
or any other office or agency of the Company maintained or designated for such Securities pursuant to
Section 1002
or, to the extent
designated or required by
Section 1002
in lieu of such office or agency, the Corporate Trust Office of the Trustee.
“
Officer
”
means, with respect to any Person, the chairman of the board, vice chairman of the board, the
chief executive officer, the president, the chief operating officer, the chief financial officer, the treasurer, any assistant treasurer, the controller, the secretary or any Vice President of such Person.
“
Officers’ Certificate
” means a certificate signed on behalf of the Company by two Officers of the Company, one of
whom must be an Authorized Officer (which, in the case of a certificate provided by the Company to the Trustee pursuant to
Section 704(1)(b)
as required by Section 314(a)(4) of the Trust Indenture Act, shall be the principal
executive officer or the principal financial officer of the Company), that complies with the requirements of Section 314(e) of the Trust Indenture Act and is delivered to the Trustee.
“
Opinion of Counsel
” means a written opinion of counsel, who is reasonably acceptable to the Trustee, that, if required
by the Trust Indenture Act, complies with the requirements of Section 314(e) of the Trust Indenture Act.
“
Original Issue Discount Security
” means a Security issued pursuant to this Indenture that provides for an amount less
than the principal face amount thereof to be due and payable upon declaration of acceleration pursuant to
Section 502
.
“
Outstanding
,” when used with respect to any Securities, means, as of the date of determination, all such Securities theretofore authenticated and delivered under this Indenture, except:
(a) any such Security theretofore cancelled by the Trustee or the Security Registrar or delivered to the
Trustee or the Security Registrar for cancellation;
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(b) any such Security for whose payment at the Maturity thereof money in the
necessary amount (or, to the extent that such Security is payable at such Maturity in shares of Common Stock or other securities or property, Common Stock or such other securities or property in the necessary amount, together with, if applicable,
cash in lieu of fractional shares or securities) has been theretofore deposited pursuant hereto (other than pursuant to
Section 402
) with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities, provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(c) any such Security with respect to which the Company
has effected defeasance or covenant defeasance pursuant to
Section 402
, except to the extent provided in
Section 402
;
(d) any such Security that has been paid pursuant to
Section 306
or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture,
unless there shall have been presented to the Trustee proof satisfactory to the Trustee that such Security is held by a bona fide purchaser in whose hands such Security is a valid obligation of the Company; and
(e) any such Security converted or exchanged as contemplated by this Indenture into Common Stock or other securities or
property, if the terms of such Security provide for such conversion or exchange pursuant to
Section 301
;
provided, however, that
in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder or are present at a meeting of Holders of Securities for
quorum purposes, (i) the principal amount of an Original Issue Discount Security that may be counted in making such determination and that shall be deemed to be Outstanding for such purposes shall be equal to the amount of the principal thereof
that pursuant to the terms of such Original Issue Discount Security would be declared (or shall have been declared to be) due and payable upon a declaration of acceleration thereof pursuant to
Section 502
at the time of such
determination, and (ii) the principal amount of any Indexed Security that may be counted in making such determination and that shall be deemed Outstanding for such purpose shall be equal to the principal face amount of such Indexed Security at
original issuance, unless otherwise provided in or pursuant to this Indenture, and (iii) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in making any such determination or relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned that shall have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee
(A) the pledgee’s right so to act with respect to such Securities and (B) that the pledgee is not the Company or any other obligor upon the Securities or an Affiliate (other than a Trust) of the Company or such other obligor.
“
Paying Agent
” means any Person authorized by the Company, including the Company, to pay the principal of,
or any premium or interest on, any Security on behalf of the Company.
“
Person
” and “
person
”
mean any individual, corporation, partnership, association, limited liability company, other company, statutory trust, business trust, joint venture, joint-stock company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
“
Place of Payment
,” with respect to any Security, means the place or places where the
principal of, or any premium or interest on, such Security are payable as provided in or pursuant to this Indenture or such Security.
“
Predecessor Security
” of any particular Security means every previous Security evidencing all or a portion of the same indebtedness as that evidenced by such particular Security; and,
for the purposes of this definition, any Security authenticated and delivered under
Section 306
in exchange for or in lieu of a lost, destroyed, mutilated or stolen Security shall be deemed to evidence the same indebtedness as the lost,
destroyed, mutilated or stolen Security.
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“
Redemption Date
,” with respect to any Security or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this Indenture or such Security.
“
Redemption
Price
,” with respect to any Security or portion thereof to be redeemed, means the price at which it is to be redeemed as determined by or pursuant to this Indenture or such Security.
“
Regular Record Date
” for the interest payable on any Security on any Interest Payment Date therefor means the date, if
any, specified in or pursuant to this Indenture or such Security as the record date for the payment of such interest.
“
Responsible Officer
” means, when used with respect to the Trustee, any officer within the corporate trust department of
the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the
time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of
this Indenture.
“
Securities Act
” means the Securities Act of 1933, as amended, or any successor statute
thereto, together with all rules and regulations promulgated thereunder, in each case as amended from time to time.
“
Security
” or “
Securities
” means any note or notes, bond or bonds, debenture or debentures, or any
other evidence or evidences of indebtedness, as the case may be, authenticated and delivered under this Indenture; provided, however, that, if at any time there is more than one Person acting as Trustee under this Indenture, “Securities,”
with respect to any such Person, shall mean Securities authenticated and delivered under this Indenture, exclusive, however, of Securities of any Series as to which such Person is not Trustee.
“
Security Register
” and “
Security Registrar
” have the respective meanings specified in
Section 305
.
“
Series
” means a series of Securities designated or established pursuant to
Section 301
, all of which Securities in such Series shall have like terms and conditions (other than the principal amount thereof).
“
Significant Subsidiary
” means any Subsidiary of the Company that is a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X promulgated by the Commission (as such
rule is in effect on the date of this Indenture).
“
Special Record Date
” for the payment of any Defaulted
Interest on any Security means a date fixed pursuant to
Section 307
.
“
Stated Maturity
,” with
respect to any Security or any installment of principal thereof or interest thereon, means the date established by or pursuant to this Indenture or such Security as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
“
Subsidiary
” means a corporation, a partnership, business or
statutory trust or a limited liability company, a majority of the outstanding voting equity securities or a majority of the voting membership or partnership interests, as the case may be, of which is owned or controlled, directly or indirectly, by
the Company or by one or more other Subsidiaries of the Company. For the purposes of this definition, “voting equity securities” means securities having voting power for the election of directors, managers, managing partners or trustees,
as the case may be, whether at all times or only so long as no senior class of stock has voting power by reason of any contingency.
“
Trust Indenture Act
” means the Trust Indenture Act of 1939, as amended, and any reference herein to the Trust Indenture Act or a particular provision thereof shall mean such Act or
provision, as the case may be, as amended or replaced from time to time or as supplemented from time to time by rules or regulations adopted by the Commission under or in furtherance of the purposes of such Act or provision, as the case may be.
“
Trustee
” means the Person named as the “Trustee” in the first paragraph of this instrument until
a successor Trustee shall have become such with respect to one or more Series of Securities pursuant to the applicable
6
provisions of this Indenture, and thereafter “Trustee” shall mean each Person who is then a Trustee hereunder; provided, however, that if at any time there is more than one such Person,
“Trustee” shall mean each such Person and as used with respect to the Securities of any Series shall mean the Trustee with respect to the Securities of such Series.
“
United States
,” means the United States of America (including the states thereof and the District of Columbia), its territories, its possessions and other areas subject to its
jurisdiction; and the term “United States of America” means the United States of America.
“
United States
Alien
,” except as otherwise provided in or pursuant to this Indenture or any Security, means any Person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien
fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a
foreign estate or trust.
“
Vice President
,” when used with respect to the Company or the Trustee, means any
vice president, whether or not designated by a number or a word or words added before or after the title “Vice President.”
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Section 102.
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Compliance Certificates and Opinions
.
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Except as otherwise expressly provided in or pursuant to this Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, 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, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents or any of them is specifically required by any provision of this
Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
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Section 103.
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Form of Documents Delivered to Trustee
.
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In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless such officer knows, or in the exercise of reasonable care should know, that the opinion with respect to the matters upon which his certificate or
opinion is based is erroneous. Any such Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company, a governmental official or officers or
any other Person or Persons, stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate, opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture or any Security, they may, but need not, be consolidated and form one instrument.
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Section 104.
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Acts of Holders
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(1) Any
request, demand, authorization, direction, notice, consent, waiver or other action provided by or pursuant to this Indenture to be made, given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing or a written record of voting at a meeting of the Holders. Except as herein otherwise expressly provided,
7
such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument
or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 315 of the Trust Indenture Act) conclusive
in favor of the Trustee and the Company and any agent of the Trustee or the Company, if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in
Section 1406
.
Without limiting the generality of this
Section 104
, unless otherwise provided in or
pursuant to this Indenture, a Holder, including a Depositary that is a Holder of a global Security, may make, give or take, by a proxy or proxies, duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or
other Act provided in or pursuant to this Indenture or the Securities to be made, given or taken by Holders, and a Depositary that is a Holder of a global Security may provide its proxy or proxies to the beneficial owners of interests in any such
global Security through such Depositary’s standing instructions and customary practices.
(2) The fact and date of the
execution by any Person of any such instrument or writing may be proved in any reasonable manner that the Trustee deems sufficient and in accordance with such reasonable rules as the Trustee may determine; and the Trustee may in any instance require
further proof with respect to any of the matters referred to in this Section.
(3) The ownership, principal amount and serial
numbers of Securities held by any Person, and the date of the commencement and the date of the termination of holding the same, shall be proved by the Security Register.
(4) If the Company shall solicit from the Holders of any Securities any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may at its option (but is not obligated
to), by Board Resolution, fix in advance a record date for the determination of Holders of Securities entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of Securities of record at the close of business on such record date shall be deemed to be Holders
for the purpose of determining whether Holders of the requisite proportion of Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose
the Outstanding Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders of Securities 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.
(5) Any request, demand, authorization, direction, notice,
consent, waiver or other Act by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee, any Security Registrar, any Paying Agent or the Company in reliance thereon, whether or not notation of such Act is made upon such Security.
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Section 105.
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Notices, etc. to Trustee and Company
.
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Any request, demand, authorization, direction, notice, consent, waiver or other Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee by any Holder or the Company shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to the attention of its Treasurer at the address of its principal office
specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.
8
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Section 106.
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Notice to Holders of Securities; Waiver
.
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Except as otherwise expressly provided in or pursuant to this Indenture, where this Indenture provides for notice to Holders of Securities of any event, such notice shall be sufficiently given to Holders
of Securities if in writing and mailed, first-class postage prepaid, to each Holder of a Security affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice.
In any case where notice to Holders of Securities is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Security shall affect the sufficiency of such notice with respect to other Holders of Securities. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided. In the case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders of Securities shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
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Section 107.
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Language of Notices
.
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Any
request, demand, authorization, direction, notice, consent or waiver or other Act required or permitted under this Indenture shall be in the English language, except that, if the Company so elects, any published notice may be in an official language
of the country of publication.
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Section 108.
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Conflict with Trust Indenture Act
.
|
If any provision hereof limits, qualifies or conflicts with any duties under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c)
thereof, such required provision
shall control.
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Section 109.
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Effect of Headings and Table of Contents
.
|
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
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Section 110.
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Successors and Assigns
.
|
All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
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Section 111.
|
Separability Clause
.
|
In
case any provision in this Indenture or any Security shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not, to the fullest extent permitted by law, in any way be affected or
impaired thereby.
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Section 112.
|
Benefits of Indenture
.
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Nothing in this Indenture or any Security, express or implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent and their respective successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.
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Section 113.
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Governing Law
.
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This
Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of Texas applicable to agreements made or instruments entered into and, in each case, performed in said State.
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Section 114.
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Legal Holidays
.
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Unless
otherwise specified in or pursuant to this Indenture or any Securities, in any case where any Interest Payment Date, Stated Maturity or Maturity of, or any other day on which a payment is due with respect to, any Security shall be a day that is not
a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or any Security other than a provision in any Security or in the Board Resolution, Officers’ Certificate or supplemental indenture establishing
the terms of any Security that specifically states that such provision shall apply in lieu hereof) payment need not be made at such Place of Payment on such date, but such payment may be made on the next succeeding day that is a Business Day at such
Place of Payment with the same force and effect as if made on the Interest Payment Date, at the Stated Maturity or Maturity or on any such other payment date, as the case may be, and no interest shall accrue on the amount payable on such date or at
such time for the period from and after such Interest Payment Date, Stated Maturity, Maturity or other payment date, as the case may be, to the next succeeding Business Day.
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Section 115.
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Counterparts; Electronic Transmission
.
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This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Any facsimile or electronically transmitted
copies hereof or signature hereon shall, for all purposes, be deemed originals.
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Section 116.
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Immunity of Shareholders, Directors, Officers and Agents of the Company
.
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No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had against any past, present or
future shareholder, employee, officer or director, as such, of the Company or of any predecessor or successor, either directly or through the Company or any predecessor or successor, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the Holders and as part of the consideration for the issue of the
Securities.
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Section 117.
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Waiver of Jury Trial
.
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EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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Section 118.
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Force Majeure
.
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In no
event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it
being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
10
ARTICLE TWO
SECURITIES FORMS
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Section 201.
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Forms Generally
.
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Each
Security and temporary or permanent global Security issued pursuant to this Indenture shall be in the form established by or pursuant to a Board Resolution and set forth in an Officers’ Certificate, or established in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by or pursuant to this Indenture or any indenture supplemental hereto and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officer of the Company executing such Security as evidenced by the execution of such Security.
The Securities shall be issuable in registered form without coupons.
Definitive Securities may be printed, lithographed or engraved or produced by any combination of these methods on a steel engraved border
or steel engraved borders or may be produced in any other manner, all as determined by the officer of the Company executing such Securities, as evidenced by the execution of such Securities.
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Section 202.
|
Form of Trustee’s Certificate of Authentication
.
|
Subject to
Section 612
, the Trustee’s certificate of authentication shall be in substantially the following form:
This is one of the Securities of the Series designated therein referred to in the within-mentioned Indenture.
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as Trustee
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By:
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Authorized Signatory
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Section 203.
|
Securities in Global Form
.
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Unless otherwise provided in or pursuant to this Indenture or any Securities, the Securities shall not be issuable in global form. If
Securities of a Series shall be issuable in temporary or permanent global form, any such Security may provide that it or any number of such Securities shall represent the aggregate amount of all Outstanding Securities of such Series (or such lesser
amount as is permitted by the terms thereof) from time to time set forth in such Securities in global form, endorsed thereon or reflected on the books and records of the Trustee and may also provide that the aggregate amount of Outstanding
Securities represented thereby may from time to time be increased or reduced to reflect exchanges. Any endorsement of any Security in global form to reflect the amount, or any increase or decrease in the amount, or changes in the rights of Holders,
of Outstanding Securities represented thereby shall be made in such manner and by such Person or Persons as shall be specified therein or pursuant to
Section 301
with respect to such Security or in the Company Order to be delivered
pursuant to
Section 303
or
Section 304
with respect thereto. Subject to the provisions of
Section 303
and, if applicable,
Section 304
, the Trustee shall deliver and redeliver any Security in global
form in the manner and upon instructions given by the Person or Persons specified therein or pursuant to
Section 301
with respect to such Security or in the applicable Company Order. If a Company Order pursuant to
Section 303
or
Section 304
has been, or simultaneously is, delivered, any instructions by the Company with respect to a Security in global form shall be in writing but need not be accompanied by or contained in an Officers’ Certificate and need
not be accompanied by an Opinion of Counsel. Notwithstanding the foregoing provisions of this paragraph, in the event a global Security is exchangeable for definitive Securities as provided in
Section 305
, then, unless otherwise provided
in or pursuant to this Indenture with respect to the Securities of such Series, the Trustee shall deliver and redeliver such global Security to the extent necessary to effect such exchanges, shall endorse such global Security to reflect any decrease
in the principal amount thereto resulting from such exchanges and shall take such other actions, all as contemplated by
Section 305
.
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Notwithstanding the provisions of
Section 307
, unless otherwise specified in or
pursuant to this Indenture or any Securities, payment of principal of, and any premium and interest on, any Security in temporary or permanent global form shall be made to the Person or Persons specified therein.
Notwithstanding the provisions of
Section 308
and except as provided in the preceding paragraph, the Company, the Trustee and
any agent of the Company or the Trustee shall treat as the Holder of such principal amount of Outstanding Securities represented by a global Security, the Holder of such global Security in registered form.
ARTICLE THREE
THE SECURITIES
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Section 301.
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Amount Unlimited; Issuable in Series
.
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The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Company may issue up to the aggregate principal amount of Securities of a Series
from time to time authorized by or pursuant to one or more Board Resolutions.
The Securities may be issued in one or more
Series. All Securities of each Series issued under this Indenture shall in all respects be equally and ratably entitled to the benefits hereof with respect to that Series without preference, priority or distinction on account of the actual time or
times of the authentication and delivery or Maturity of the Securities of such Series. Unless expressly provided otherwise with respect to a Series, not all Securities of a Series need be issued at the same time, and, unless otherwise provided in
the Securities of that Series or in this Indenture, a Series may be reopened and the aggregate principal amount of the Securities of a Series may be increased and additional Securities of that Series may be issued up to a maximum aggregate principal
amount authorized for that Series, as that maximum aggregate principal amount may be increased from time to time. All Securities of a Series shall rank equally among themselves and with the other existing and future unsecured, unsubordinated
indebtedness of the Company.
The Company may from time to time establish one or more Series pursuant to this Indenture. A
Series shall be established by (1) the execution and delivery of a Supplemental Indenture or (2) the adoption of a Board Resolution by the Board of Directors establishing that Series. The specific terms and conditions of the Securities of
any Series established shall be determined and set either (1) by the Supplemental Indenture that establishes the Series, (2) if the Series is established by a Supplemental Indenture, to the extent that those specific terms and conditions
are not determined and set by that Supplemental Indenture, by the adoption of a Board Resolution or Board Resolutions by the Board of Directors and, to the extent that those specific terms and conditions are not determined and set by the
Supplemental Indenture or by the adoption of a Board Resolution or Board Resolutions by the Board of Directors or by a combination of those means of determining and setting the specific terms and conditions of the Securities of that Series, by the
action of one or more Authorized Officers pursuant to authority to determine and set the specific terms and conditions of the Securities of that Series specifically delegated by the Board of Directors to that Authorized Officer or those Authorized
Officers or (3) if the Series is established by action of the Board of Directors, to the extent that those specific terms and conditions are not set by the adoption of a Board Resolution or Board Resolutions by the Board of Directors, by the
action of one or more Authorized Officers pursuant to authority to determine and set the specific terms and conditions of the Securities of that Series specifically delegated by the Board of Directors to that Authorized Officer or those Authorized
Officers. If the specific terms and specific conditions of the Securities of a Series are determined and set by action of the Board of Directors, that action shall be evidenced by a Board Resolution. If the specific terms and conditions of the
Securities of a Series established by action of the Board of Directors are determined and set by an Authorized Officer or Authorized Officers pursuant to authority delegated to them by the Board of Directors, that action shall be evidenced by an
Officers’ Certificate executed by the Authorized Officer or Authorized Officers determining and setting those terms and conditions, which certificate shall also be attested to by the Secretary or an Assistant Secretary of the Company. If the
specific terms and conditions of the Securities of a Series established by action of
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the Board of Directors are determined and set by an Authorized Officer or Authorized Officers pursuant to authority delegated to them by the Board of Directors and an Officers’ Certificate
has been delivered in connection with the establishment of the terms and conditions of the Securities of a Series and the issuance of the Securities of that Series, an additional Officers’ Certificate shall not be required to be delivered in
connection with any subsequent issuance of additional Securities of that Series.
Upon a Series being established and the
specific terms and conditions of the Securities of that Series being determined and set otherwise than through a Supplemental Indenture, the Company shall cause to be delivered to the Trustee an Officers’ Certificate certifying that the Series
has been established and the specific terms and conditions of the Securities of the Series have been determined and set and attaching to that Officers’ Certificate (1) the Board Resolution establishing the Series, (2) the Board
Resolution or Board Resolutions determining and setting the specific terms and conditions of the Securities of that Series or providing for the delegation of authority to one or more Authorized Officers to determine and set the specific terms and
conditions of the Securities of that Series and (3) if an Authorized Officer or Authorized Officers has determined and set the specific terms and conditions of the Securities of that Series, attaching the Certificate evidencing the action of
that Authorized Officer or those Authorized Officers. The Officers’ Certificate that is required to be delivered to the Trustee in accordance with the immediately preceding sentence, may be provided before or at the time of the consummation of
the first issuance of Securities of the Series to which the Officers’ Certificate relates.
Each Board Resolution of the
Company determining and setting the specific terms and conditions of the Securities of a Series, each Officers’ Certificate evidencing the specific terms and conditions of the Securities of a Series, and each Supplemental Indenture setting
forth the terms and conditions of the Securities of a Series, shall set forth the following information as to the terms and conditions of that Series:
(1) the title of the Securities of such Series;
(2) the aggregate principal
amount of the Securities of such Series to be initially issued and sold by the Company and any limit upon the aggregate principal amount of Securities of such Series that may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of such Series pursuant to
Section 304
,
Section 305
,
Section 306
,
Section 905
or
Section 1107
or upon surrender in part of any Security for conversion or exchange into Common Stock or other securities or property pursuant to its terms), and if from time to time the Company may issue additional Securities of such
Series or establish additional terms of the Securities of such Series;
(3) if any of such Securities of such Series are to be
issuable in global form, when any of such Securities are to be issuable in global form and (i) whether such Securities are to be issued in temporary or permanent global form or both, (ii) the conditions upon which Securities in definitive
form will be issued to beneficial owners of Securities of Series; (iii) whether beneficial owners of interests in any such global Security may exchange such interests for Securities of the same Series and of like tenor and of any authorized
form and denomination, and the circumstances under which any such exchanges may occur, if other than in the manner specified in
Section 305
, (iv) the name of the Depositary with respect to any such global Security and (v) if
applicable and in addition to the Persons specified in
Section 305
, the Person or Persons who shall be entitled to make any endorsements on any such global Security and to give the instructions and take the other actions with respect to
such global Security contemplated by the first paragraph of
Section 203
;
(4) the date or dates, or the method or
methods, if any, by which such date or dates shall be determined, on which the principal and premium, if any, of such Securities is payable;
(5) the rate or rates at which such Securities shall bear interest, if any, or the method or methods, if any, by which such rate or rates are to be determined, the date or dates, if any, from which such
interest shall accrue or the method or methods, if any, by which such date or dates are to be determined, the Interest Payment Dates, if any, on which such interest shall be payable and the Regular Record Date, if any, for the interest payable on
such Securities on any Interest Payment Date, the notice, if any, to Holders regarding the determination of interest on a floating rate Security and the manner of giving such notice, and the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
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(6) if in addition to or other than Dallas, Texas, the place or places where the principal
of, any premium and interest on, such Securities shall be payable, any of such Securities may be surrendered for registration of transfer or exchange, any of such Securities may be surrendered for conversion or exchange, and notices or demands to or
upon the Company in respect of such Securities and this Indenture may be served;
(7) whether any of the Securities are
subject to prepayment and, if so, any premium payable in connection with any such prepayment;
(8) whether any of such
Securities are to be redeemable at the option of the Company and, if so, the date or dates on which, the period or periods within which, the price or prices at which and the other terms and conditions upon which such Securities may be redeemed, in
whole or in part, at the option of the Company;
(9) if the Company is obligated to redeem or purchase any of such Securities
pursuant to any sinking fund or analogous provision or at the option of any Holder thereof and, if so, the date or dates on which, the period or periods within which, the price or prices at which and the other terms and conditions upon which such
Securities shall be redeemed or purchased, in whole or in part, pursuant to such obligation, and any provisions for the remarketing of such Securities so redeemed or purchased;
(10) the denominations in which any of such Securities shall be issuable if other than denominations of $1,000 and any integral multiple
thereof;
(11) whether the Securities of the Series will be convertible into and/or exchangeable for Common Stock or other
securities or property, and if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, and any deletions from or modifications or additions to this Indenture to permit or to facilitate the issuance of such
convertible or exchangeable Securities or the administration thereof;
(12) if other than the principal amount thereof, the
portion of the principal amount of any of such Securities that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 502
or the method by which such portion is to be determined;
(13) if the amount of payments of principal of, or any premium or interest on, such Securities may be determined with reference to an
index, formula or other method or methods (which index, formula or method or methods may be based, without limitation, on one or more commodities, equity indices or other indices), and, if so, the terms and conditions upon which and the manner in
which such amounts shall be determined and paid or payable;
(14) any affirmative, negative or financial covenants to which
the Company shall be subject or obligated to perform so long as any Security of such Series is Outstanding;
(15) any
deletions from, modifications of, or additions to, the Events of Default or covenants of the Company with respect to any of such Securities (whether or not such Events of Default or covenants are consistent with the Events of Default or covenants
set forth herein), and if
Section 1006
shall be applicable with respect to any such additional covenants;
(16) if
any one or more of
Section 401
relating to satisfaction and discharge,
Section 402(2)
relating to defeasance or
Section 402(3)
relating to covenant defeasance shall not be applicable to the Securities of such
Series, and any covenants in addition to or other than those specified in
Section 402(3)
relating to the Securities of such Series that shall be subject to covenant defeasance, if the Company’s obligation to repurchase or repay such
Securities will be subject to satisfaction and discharge pursuant to
Section 401
or to defeasance or covenant defeasance pursuant to
Section 402
, and, if the Holders of such Securities have the right to convert or exchange
such Securities into Common Stock or other securities or property, if the right to effect such conversion or exchange will be subject to satisfaction and discharge pursuant to
Section 401
or to defeasance or covenant defeasance pursuant
to
Section 402
, and any deletions from, or modifications or additions to, the provisions of
Article Four
(including any modification which would permit satisfaction and discharge, defeasance or covenant defeasance to be
effected with respect to less than all of the outstanding Securities of such Series) in respect of the Securities of such Series;
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(17) if any of such Securities are issuable in global form and are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary Security) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or
conditions;
(18) if not the Trustee, the identity of each Security Registrar, Paying Agent or Authenticating Agent with
respect to such Securities;
(19) the Person to whom any interest on any Security of such Series shall be payable, if other
than the Person in whose name the Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, and the extent to which, or the manner in which, any interest payable on a
temporary global Security will be paid if other than in the manner provided in this Indenture;
(20) any other terms of such
Securities and any deletions from or modifications or additions to this Indenture in respect of such Securities.
The terms of
the Securities of any Series may provide, without limitation, that the Securities shall be authenticated and delivered by the Trustee on original issue from time to time upon telephonic or written order of persons designated in the Board Resolution,
Officers’ Certificate or supplemental indenture, as the case may be, pertaining to such Series of Securities (telephonic instructions to be promptly confirmed in writing by such person) and that such persons are authorized to determine,
consistent with such Board Resolution, Officers’ Certificate or supplemental indenture, such terms and conditions of the Securities of such Series as are specified in such Board Resolution, Officers’ Certificate or supplemental indenture.
All Securities of any one Series need not be issued at the same time and, if so provided by the Company as contemplated by this
Section 301
, a Series may be reopened from time to time without the consent of any Holders for issuances of
additional Securities of such Series or to establish additional terms of such Series of Securities.
If any of the terms of
the Securities of any Series shall be established by action taken by or pursuant to a Board Resolution, the Board Resolution shall be delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of
such Series.
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Section 302.
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Currency; Denominations
.
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The principal of, and any premium and interest on, the Securities shall be payable in Dollars. Unless otherwise provided in or pursuant to
this Indenture, Securities shall be issuable in registered form without coupons in denominations of $1,000 and any integral multiple thereof.
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Section 303.
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Execution, Authentication, Delivery and Dating
.
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Securities shall be executed on behalf of the Company by its Chairman, Vice Chairman, Chief Executive Officer, its President or one of its Vice Presidents and by its Treasurer, one of its Assistant
Treasurers, its Secretary or one of its Assistant Secretaries and may (but need not) have its corporate seal or a facsimile thereof reproduced thereon. The signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall, to
the fullest extent permitted by law, bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such
Securities.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver
Securities executed by the Company, to the Trustee for authentication and, provided that the Board Resolution and Officers’ Certificate or supplemental indenture or indentures with respect to such Securities referred to in
Section 301
and a Company Order for the authentication and delivery of such Securities have been delivered to the Trustee, the Trustee in accordance with the Company Order and subject to the provisions hereof and of such Securities shall
authenticate and deliver such Securities. In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive,
15
and (subject to Section 315(a) through Section 315(d) of the Trust Indenture Act) shall be fully protected in relying upon, an Opinion of Counsel to the following effect, which Opinion
of Counsel may contain such assumptions, qualifications and limitations as such counsel shall deem appropriate:
(a) the form or forms and terms of such Securities have been established in conformity with
Section 201
and
Section 301
of this Indenture;
(b) all conditions precedent set forth in
Section 201
,
Section 301
and
Section 303
of this Indenture to the authentication and delivery of such Securities have been complied with and that such Securities, when completed by appropriate insertions (if applicable), executed by duly
authorized officers of the Company, delivered by duly authorized officers of the Company to the Trustee for authentication pursuant to this Indenture, and authenticated and delivered by the Trustee and issued by the Company in the manner and subject
to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be subject to or limited by
bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance, fraudulent transfer or other similar laws relating to or affecting creditors’ rights generally, and subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
If all the Securities of any Series are not to be issued
at one time, it shall not be necessary to deliver an Opinion of Counsel at the time of issuance of each Security, but such opinion, with such modifications as counsel shall deem appropriate, shall be delivered at or before the time of issuance of
the first Security of such Series. After any such first delivery, any separate request by the Company that the Trustee authenticate Securities of such Series for original issue will be deemed to be a certification by the Company that all conditions
precedent provided for in this Indenture relating to authentication and delivery of such Securities continue to have been complied with.
The Trustee shall not be required to authenticate or to cause an Authenticating Agent to authenticate any Securities if the issue of such Securities pursuant to this Indenture will affect the
Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee or if the Trustee, being advised by counsel, determines that such action may not
lawfully be taken.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such
Security a certificate of authentication substantially in the form provided for in
Section 202
or
Section 612
executed by or on behalf of the Trustee or by the Authenticating Agent by the manual signature of one of its
authorized signatories. Such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.
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Section 304.
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Temporary Securities
.
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Pending the preparation of definitive Securities, the Company may execute and deliver to the Trustee and, upon Company Order, the Trustee
shall authenticate and deliver, in the manner provided in
Section 303
, temporary Securities in lieu thereof which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Securities in lieu of which they are issued, in registered form, without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the Company executing such
Securities may determine, as conclusively evidenced by their execution of such Securities. Such temporary Securities may be in global form.
Except in the case of temporary Securities in global form, which shall be exchanged in accordance with the provisions set forth in this Indenture or the provisions established pursuant to
Section 301
, if temporary Securities are issued, the Company shall cause definitive Securities to be prepared without unreasonable delay. Except as otherwise provided in or pursuant to this Indenture, after the preparation of definitive
Securities of the same Series and containing terms and provisions that are identical to those of any temporary Securities, such temporary Securities shall be exchangeable for such definitive Securities upon surrender of such temporary Securities at
an Office or Agency for such Securities, without charge to any Holder thereof. Except as otherwise provided in or
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pursuant to this Indenture, upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor
a like principal amount of definitive Securities of authorized denominations of the same Series and containing identical terms and provisions. Unless otherwise provided in or pursuant to this Indenture with respect to a temporary global Security,
until so exchanged the temporary Securities of any Series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such Series.
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Section 305.
|
Registration, Transfer and Exchange
.
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With respect to the Securities of each Series, if any, the Company shall cause to be kept a register (each such register being herein sometimes referred to as the “
Security Register
”) at
an Office or Agency for such Series in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of the Securities of such Series and of transfers of the Securities of such Series. Such Office
or Agency shall be the “Security Registrar” for that Series of Securities. Unless otherwise specified in or pursuant to this Indenture or the Securities, the initial Security Registrar for each Series of Securities shall be as specified in
the penultimate paragraph of
Section 1002
. The Company shall have the right to remove and replace from time to time the Security Registrar for any Series of Securities; provided that no such removal or replacement shall be effective
until a successor Security Registrar with respect to such Series of Securities shall have been appointed by the Company and shall have accepted such appointment. In the event that the Trustee shall not be or shall cease to be Security Registrar with
respect to a Series of Securities, it shall have the right to examine the Security Register for such Series at all reasonable times. There shall be only one Security Register for each Series of Securities.
Except as otherwise provided in or pursuant to this Indenture, upon surrender for registration of transfer of any Security of any Series
at any Office or Agency for such Series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same Series denominated as authorized in
or pursuant to this Indenture, of a like aggregate principal amount bearing a number not contemporaneously outstanding and containing identical terms and provisions.
Except as otherwise provided in or pursuant to this Indenture, at the option of the Holder, Securities of any Series may be exchanged for other Securities of the same Series containing identical terms and
provisions, in any authorized denominations, and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at any Office or Agency for such Series. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise provided in or pursuant to this Indenture, the global Securities of any Series shall be exchangeable for definitive certificated Securities of such
Series only if (i) the Depositary for such global Securities notifies the Company that it is unwilling or unable to continue as a Depositary for such global Securities or at any time the Depositary for such global Securities ceases to be a
clearing agency registered as such under the Exchange Act, if so required by applicable law or regulation, and no successor Depositary for such Securities shall have been appointed within 90 days of such notification or of the Company becoming aware
of the Depositary’s ceasing to be so registered, as the case may be, (ii) the Company, in its sole discretion, determines that the Securities of such Series shall no longer be represented by one or more global Securities and executes and
delivers to the Trustee a Company Order to the effect that such global Securities shall be so exchangeable, or (iii) an Event of Default has occurred and is continuing with respect to such Securities.
If the beneficial owners of interests in a global Security are entitled to exchange such interests for definitive Securities as the
result of an event described in clause (i), (ii) or (iii) of the preceding paragraph, then without unnecessary delay, but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver
to the Trustee definitive Securities in such form and denominations as are required by or pursuant to this Indenture, and of the same Series, containing identical terms and in aggregate principal amount equal to the principal amount of such global
Security, executed by the Company. On or after the earliest date on which such interests may be so exchanged, such global Security shall be surrendered from time to time by the Depositary (or its custodian) as shall be specified in the Company Order
with respect thereto (which the Company agrees to deliver), and in accordance with instructions given to the Trustee and the Depositary (which instructions shall be in writing but need not be contained in or accompanied by an Officers’
Certificate or be accompanied by an
17
Opinion of Counsel), as shall be specified in the Company Order with respect thereto to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or in part, for
definitive Securities as described above without charge. The Trustee shall authenticate and make available for delivery, in exchange for each portion of such surrendered global Security, a like aggregate principal amount of definitive Securities of
the same Series of authorized denominations and of like tenor as the portion of such global Security to be exchanged, which shall be in the form of Registered Securities, and which shall be in such denominations and registered in such names, as
shall be specified by the Depositary; provided, however, that no such exchanges may occur during a period beginning at the opening of business 15 days before any selection of Securities of the same Series to be redeemed and ending on the relevant
Redemption Date. Promptly following any such exchange in part, such global Security shall be returned by the Trustee to such Depositary (or its custodian) or such other Depositary (or its custodian) referred to above in accordance with the
instructions of the Company referred to above, and the Trustee shall endorse such global Security to reflect the decrease in the principal amount thereof resulting from such exchange. If a Security is issued in exchange for any portion of a global
Security after the close of business at the Office or Agency for such Security where such exchange occurs on or after (i) any Regular Record Date for such Security and before the opening of business at such Office or Agency on the next Interest
Payment Date, or (ii) any Special Record Date for such Security and before the opening of business at such Office or Agency on the related proposed date for payment of interest or Defaulted Interest, as the case may be, interest shall not be
payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such Security, but shall be payable on such Interest Payment Date or proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such global Security shall be payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company evidencing the same debt and entitling the Holders thereof to the same
benefits under this Indenture as the Securities surrendered upon such registration of transfer or exchange.
Every Security
presented or surrendered for registration of transfer or for exchange or redemption shall (if so required by the Company or the Security Registrar for such Security) be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar for such Security duly executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities, or any redemption or repayment of Securities, or any conversion or exchange of Securities for other types of
securities or property, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges
pursuant to
Section 304
,
Section 905
or
Section 1107
, or upon surrender in part of any Security for conversion or exchange into Common Stock or other securities or property pursuant to its terms, in each case not
involving any transfer.
Except as otherwise provided in or pursuant to this Indenture, the Company shall not be required
(i) to issue, register the transfer of or exchange any Securities during a period beginning at the opening of business 15 days before the day of the selection for redemption of Securities of like tenor and terms and of the same Series under
Section 1103
and ending at the close of business on the day of such selection, or (ii) to register the transfer of or exchange any Security, or portion thereof, so selected for redemption, except in the case of any Security to be
redeemed in part, the portion thereof not to be redeemed.
The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants or
beneficial owners of interests in any global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture,
and to examine the same to determine substantial compliance as to form with the express requirements hereof.
Neither the
Trustee nor any Paying Agent shall have any responsibility for any actions taken or not taken by the Depositary.
18
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Section 306.
|
Mutilated, Destroyed, Lost and Stolen Securities
.
|
If any mutilated Security is surrendered to the Trustee, subject to the provisions of this
Section 306
, the Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series containing identical terms and of like principal amount and bearing a number not contemporaneously outstanding.
If there be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security, and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and, upon the
Company’s request the Trustee shall authenticate and deliver, in exchange for or in lieu of any such destroyed, lost or stolen Security, a new Security of the same Series containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding.
Notwithstanding the foregoing provisions of this
Section 306
, in case
the outstanding principal balance of any mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute a separate obligation of the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such Series duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to this Indenture with respect to particular Securities or generally,
shall (to the extent lawful) be exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
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Section 307.
|
Payment of Interest; Rights to Interest Preserved
.
|
Unless otherwise provided in or pursuant to this Indenture, any interest on any Security that shall be payable, and are punctually paid or duly provided for, on any Interest Payment Date shall be paid to
the Person in whose name such Security (or one or more Predecessor Securities) is registered as of the close of business on the Regular Record Date for such interest.
Unless otherwise provided in or pursuant to this Indenture, any interest on any Security that shall be payable, but shall not be punctually paid or duly provided for, on any Interest Payment Date for such
Security (herein called “
Defaulted Interest
”) shall forthwith cease to be payable to the Holder thereof on the relevant Regular Record Date by virtue of having been such Holder; and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make
payment of any Defaulted Interest to the Person in whose name such Security (or a Predecessor Security thereof) shall be registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when so
deposited to be held in trust for the benefit of the Person entitled to such Defaulted Interest as in this Clause provided. Thereupon, the Company shall fix or cause to be fixed a Special Record Date for the payment of such Defaulted Interest, which
shall be not more than 15 days and not less than 10 days prior to the date of the proposed
19
payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Company (or, upon the written request of the Company, the Trustee in the name and at
the expense of the Company), shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to the Holder of such Security (or a Predecessor Security thereof) at
the Holder’s address as it appears in the Security Register not less than 10 days prior to such Special Record Date. The Company may, in its discretion, in the name and at the expense of the Company cause a similar notice to be published at
least once in an Authorized Newspaper of general circulation in the City of Dallas, Texas, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Person in whose name such Security (or a Predecessor Security thereof) shall be registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of
any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Security may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this Clause, such payment shall be deemed practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or the Securities of any particular Series, at the option of the Company,
interest on Securities that bear interest may be paid by mailing a check to the address of the Person entitled thereto as such address shall appear in the Security Register or by transfer to an account maintained by the payee with a bank located in
the United States of America.
Subject to the foregoing provisions of this Section and
Section 305
, each Security
delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
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Section 308.
|
Persons Deemed Owners
.
|
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered in the Security Register as the owner of such Security for the purpose of receiving payment of principal of, any premium and (subject to
Section 305
and
Section 307
) interest on such Security and for all other purposes whatsoever, whether or not any payment with respect to such Security shall be overdue, and neither the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its behalf
by a Depositary shall have any rights under this Indenture with respect to such global Security, and such Depositary may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such global Security for all
purposes whatsoever. None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a
global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, any Paying Agent or the Security Registrar from
giving effect to any written certification, proxy or other authorization furnished by the applicable Depositary, as a Holder, with respect to a global Security or impair, as between such Depositary and the owners of beneficial interests in such
global Security, the operation of customary practices governing the exercise of the rights of such Depositary (or its nominee) as the Holder of such global Security.
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Section 309.
|
Cancellation
.
|
All
Securities surrendered for payment, redemption, registration of transfer, exchange or conversion or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee, and any such
Securities, as well as Securities surrendered directly to the Trustee for any such purpose, shall be cancelled promptly by the Trustee. The Company may at any time deliver to the Trustee for cancellation
20
any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be cancelled promptly by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by or pursuant to this Indenture. All cancelled Securities held by the Trustee shall be
disposed of in accordance with its procedure for the disposition of cancelled Securities, and the Trustee, upon the written request of the Company, shall deliver to the Company a certificate of such disposition, or if directed by a Company Order,
returned to the Company.
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Section 310.
|
Computation of Interest
.
|
Except as otherwise provided in or pursuant to this Indenture or in the Securities of any Series, interest on the Securities shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
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Section 401.
|
Satisfaction and Discharge
.
|
Unless, pursuant to
Section 301
, the provisions of this
Section 401
shall not be applicable with respect to the Securities of any Series, upon the direction of the Company by a
Company Order, this Indenture shall cease to be of further effect with respect to any Series of Securities specified in such Company Order, and the Trustee, on receipt of a Company Order, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to such Series, when
(1) either
(a) all Securities of such Series theretofore authenticated and delivered (other than (i) Securities of such Series
that have been destroyed, lost or stolen and which have been replaced or paid as provided in
Section 306
and (ii) Securities of such Series for whose payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in
Section 1003
) have been delivered to the Trustee for cancellation; or
(b) all Securities of such Series and not theretofore delivered to the Trustee for cancellation (i) have become due
and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) if redeemable at the option of the Company, are to be called for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose, money in Dollars in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, including the principal of, and any premium and interest on
such Securities, to the date of such deposit (in the case of Securities which have become due and payable) or to the Maturity thereof, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Outstanding Securities of such Series; and
(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this Indenture as to such Series have been complied with.
In the event there are Securities of two or more Series Outstanding hereunder, the Trustee for the Series as to which the Indenture is to be discharged shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested to do so with respect to Securities of such Series as to which it is Trustee and if the other conditions thereto are met.
21
Notwithstanding the satisfaction and discharge of this Indenture with respect to any Series
of Securities, the obligations of the Company to the Trustee under
Section 607
and, if money shall have been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations of the Company and
the Trustee with respect to the Securities of such Series under
Section 305
,
Section 306
,
Section 403
,
Section 404
,
Section 1002
and
Section 1003
, any rights of Holders of the
Securities of such Series (unless otherwise provided pursuant to
Section 301
with respect to the Securities of such Series) to require the Company to repurchase or repay, and any rights of Holders of the Securities of such Series (unless
otherwise provided pursuant to
Section 301
with respect to the Securities of such Series) to convert or exchange, and the obligations of the Company to convert or exchange, such Securities into Common Stock or other securities or
property, shall survive.
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Section 402.
|
Defeasance and Covenant Defeasance
.
|
(1) Unless, pursuant to
Section 301
, either or both of (i) defeasance of the Securities of or within a Series under clause (2) of this
Section 402
or (ii) covenant
defeasance of the Securities of or within a Series under clause (3) of this
Section 402
shall not be applicable with respect to the Securities of such Series, then such provisions, together with the other provisions of this
Section 402
(with such modifications thereto as may be specified pursuant to
Section 301
with respect to any Securities), shall be applicable to such Securities, and the Company may at its option by Board Resolution, at any
time, with respect to the Securities of or within such Series, elect to have
Section 402(2)
or
Section 402(3)
be applied to such Outstanding Securities upon compliance with the conditions set forth below in this
Section 402
. Unless otherwise specified pursuant to
Section 301
with respect to the Securities of any Series, defeasance under clause (2) of this
Section 402
and covenant defeasance under clause (3) of
this
Section 402
may be effected only with respect to all, and not less than all, of the Outstanding Securities of any Series. To the extent that the terms of any Security established in or pursuant to this Indenture permit the Company
or any Holder thereof to extend the date on which any payment of principal of, or premium, if any, or interest, if any, on, such Security is due and payable, then unless otherwise provided pursuant to
Section 301
, the right to extend
such date shall terminate upon defeasance or covenant defeasance, as the case may be.
(2) Upon the Company’s exercise of
the above option applicable to this
Section 402(2)
with respect to any Securities of or within a Series, the Company shall be deemed to have been discharged from its obligations with respect to such Outstanding Securities on the date the
conditions set forth in clause (4) of this
Section 402
are satisfied (hereinafter, “
defeasance
”). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities, which shall thereafter be deemed to be “Outstanding” only for the purposes of clause (5) of this
Section 402
and the other Sections of this Indenture referred to in
clauses (i) through (iv) of this paragraph, and to have satisfied all of its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of such Outstanding Securities to receive, solely (except as provided in
clause (ii) below) from the trust fund described in clause (4)(a) of this
Section 402
and as more fully set forth in this
Section 402
and
Section 403
, payments in respect of the principal of (and
premium, if any) and interest, if any, on, such Securities when such payments are due, (ii) the obligations of the Company and the Trustee with respect to such Securities under
Section 305
,
Section 306
,
Section 1002
and
Section 1003
, any rights of Holders of such Securities (unless otherwise provided pursuant to
Section 301
with respect to the Securities of such Series) to require the Company to repurchase or
repay, and any rights of Holders of such Securities (unless otherwise provided pursuant to
Section 301
with respect to the Securities of such Series) to convert or exchange, and the obligations of the Company to convert or exchange, such
Securities into Common Stock or other securities or property, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv) this
Section 402
and
Section 403
and
Section 404
.
The Company may exercise its option under this
Section 402(2)
notwithstanding the prior exercise of its option under
Section 402(3)
with respect to such Securities.
(3) Upon the Company’s exercise of the above option applicable to this
Section 402(3)
with respect to any Securities of
or within a Series, the Company shall be released from its obligations under clauses (ii) and (iii) of
Section 1004
and under
Section 1005
,
Section 1006
and
Section 1007
and any other
covenant applicable to such Securities with respect to such Securities shall cease to be applicable to such Securities on and after the date the conditions set forth in clause (4) of this
Section 402
are satisfied (hereinafter,
“
covenant defeasance
”), and such Securities shall thereafter be deemed to be not “Outstanding” for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in
connection with any such covenant, but shall
22
continue to be deemed “Outstanding” for all other purposes hereunder. For this purpose, such covenant defeasance means that with respect to such Outstanding Securities, the Company may
omit to comply with, and shall have no liability in respect of, any term, condition or limitation set forth in any such Section or any such other covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such
Section or such other covenant or by reason of reference in any such Section or such other covenant to any other provision herein or in any other document and such omission to comply shall not constitute a default or an Event of Default under
Section 501(4)
or
Section 501(8)
or otherwise, as the case may be, but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby.
(4) The following shall be the conditions to application of clause (2) or (3) of this
Section 402
to any
Outstanding Securities of or within a Series:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 608
who shall agree to comply with the provisions of this
Section 402
applicable to it) as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (1) an amount in Dollars or (2) Government Obligations that through the scheduled payment of principal
and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment of principal of (and premium, if any) and interest, if any, on such Securities, money or (3) a combination
thereof, in any case, in an amount, sufficient, without consideration of any reinvestment of such principal and interest, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (y) the principal of (and premium, if any) and interest, if any, on, such Outstanding Securities on
the Stated Maturity of such principal or installment of principal or interest or the applicable Redemption Date, as the case may be, and (z) any mandatory sinking fund payments or analogous payments applicable to such Outstanding Securities on
the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities.
(b) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company or
any Subsidiary is a party or by which it is bound.
(c) No Event of Default or event which
with notice or lapse of time or both would become an Event of Default with respect to such Securities shall have occurred and be continuing on the date of such deposit, and, solely in the case of defeasance under
Section 402(2)
, no Event
of Default with respect to such Securities under clause (5) or (6) of
Section 501
or event which with notice or lapse of time or both would become an Event of Default with respect to such Securities under clause (5) or
(6) of
Section 501
shall have occurred and be continuing at any time during the period ending on and including the 91
st
day after the date of such deposit (it being understood that this condition to defeasance under
Section 402(2)
shall not be deemed satisfied until the expiration of such period).
(d) In the case
of defeasance pursuant to
Section 402(2)
, the Company shall have delivered to the Trustee an opinion of independent counsel reasonably acceptable to the Trustee stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (y) since the date of this Indenture there has been a change in applicable federal income tax law, in either case to the effect that, and based thereon such opinion of independent counsel
shall confirm that, the Holders of such Outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such defeasance had not occurred; or, in the case of covenant defeasance pursuant to
Section 402(3)
, the Company shall have delivered to the Trustee an opinion of independent counsel
reasonably acceptable to the Trustee to the effect that the Holders of such Outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.
23
(e) The Company shall have delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance or covenant defeasance, as the case may be, under this Indenture have been complied with.
(f) If the moneys or Government Obligations or combination thereof, as the case may be, deposited under clause
(a) above are sufficient to pay the principal of, and premium, if any, and interest, if any, on, such Securities provided such Securities are redeemed on a particular Redemption Date, the Company shall have given the Trustee irrevocable
instructions to redeem such Securities on such date and to provide notice of such redemption to Holders as provided in or pursuant to this Indenture.
(g) Notwithstanding any other provisions of this
Section 402(4)
, such defeasance or covenant defeasance shall be effected in compliance with any additional or substitute terms, conditions or
limitations that may be imposed on the Company in connection therewith pursuant to
Section 301
.
(5) Subject to
the provisions of the last paragraph of
Section 1003
, all money and Government Obligations (or other property as may be provided pursuant to
Section 301
) (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee—collectively for purposes of this
Section 402(5)
and
Section 403
, the “
Trustee
”) pursuant to clause (4)(a) of
Section 402
in respect of any Outstanding Securities of
any Series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (other than the Company or any Subsidiary or Affiliate
of the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal (and premium, if any) and interest but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge, imposed on or assessed against the Government Obligations deposited pursuant to this
Section 402
or the principal or 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 such Outstanding Securities.
Anything in this
Section 402
to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or Government Obligations (or other property and any proceeds therefrom) held by it as provided in clause (4)(a) of this
Section 402
which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required
to be deposited to effect a defeasance or covenant defeasance, as applicable, in accordance with this
Section 402
.
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Section 403.
|
Application of Trust Money
.
|
Subject to the provisions of the last paragraph of
Section 1003
, all money and Government Obligations deposited with the Trustee pursuant to
Section 401
or
Section 402
shall be held in trust and applied by it, in accordance with the provisions of the Securities subject to discharge under
Section 401
or defeasance or covenant defeasance under
Section 402,
and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal, premium and interest for whose payment such money has or Government
Obligations have been deposited with or received by the Trustee; but such money and Government Obligations need not be segregated from other funds except to the extent required by law.
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Section 404.
|
Reinstatement
.
|
If the
Trustee (or other qualifying trustee appointed pursuant to
Section 402(4)(a)
) or any Paying Agent is unable to apply any moneys or Government Obligations deposited pursuant to
Section 401(1)
or
Section 402(4)(a)
to pay any principal of or premium, if any, or interest, if any, on, the Securities of any Series by reason of any legal proceeding or any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company’s obligations under this Indenture and the Securities of such Series shall be revived and reinstated as though no such deposit had occurred, until such time as the Trustee (or other qualifying trustee) or Paying
Agent is permitted to apply all such moneys and Government Obligations to pay the
24
principal of and premium, if any, and interest, if any, on the Securities of such Series as contemplated by
Section 401
or
Section 402
as the case may be, and
Section 403
; provided, however, that if the Company makes any payment of the principal of or premium, if any, or interest if any, on the Securities of such Series following the reinstatement of its obligations as aforesaid, the Company
shall be subrogated to the rights of the Holders of such Securities to receive such payment from the funds held by the Trustee (or other qualifying trustee) or Paying Agent.
ARTICLE FIVE
REMEDIES
|
|
Section 501.
|
Events of Default
.
|
“
Event of Default
,” wherever used in this Indenture with respect to Securities of any Series, means any one of the
following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) unless such event is specifically deleted or modified in or pursuant to the supplemental indenture, Board Resolution or Officers’ Certificate establishing the terms of such Series pursuant to this Indenture:
(1) default in the payment of any interest on any of the Securities of such Series when such interest becomes due and
payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of any principal of or
premium, if any, on any of the Securities of such Series when due (whether at Maturity or otherwise and whether payable in cash or in shares of Common Stock or other securities or property); or
(3) default in the deposit of any sinking fund payment or payment under any analogous provision when due with respect to any of the
Securities of such Series; or
(4) default in the performance, or breach, of any covenant or warranty of the Company in this
Indenture or any Security of such Series (other than a covenant or warranty for which the consequences of breach or nonperformance are addressed elsewhere in this
Section 501
or a covenant or warranty which has expressly been included in
this Indenture, whether or not by means of a supplemental indenture, solely for the benefit of Securities of a Series other than such Series), and continuance of such default or breach (without such default or breach having been waived in accordance
of the provisions of this Indenture) for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of such Series 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
(5) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company or any
Significant Subsidiary of the Company in an involuntary case or proceeding under any applicable federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company or any Significant
Subsidiary of the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any Significant Subsidiary of the Company under any
applicable federal or State law, or appointing a custodian, receiver, conservator, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Significant Subsidiary of the Company or of any substantial part of the
property of the Company or any Significant Subsidiary of the Company, or ordering the winding up or liquidation of the affairs of the Company or any Significant Subsidiary of the Company, and the continuance of any such decree or order for relief
unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company or any Significant
Subsidiary of the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company or any Significant Subsidiary of the Company to the entry of a decree or order for relief in respect of the Company or any Significant Subsidiary of the Company in an involuntary case or proceeding under any applicable Federal
or State
25
bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Company or any Significant Subsidiary of the
Company, or the filing by the Company or any Significant Subsidiary of the Company of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by the Company or any Significant
Subsidiary of the Company to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, conservator, liquidator, assignee, trustee, sequestrator or similar official of the Company or any Significant
Subsidiary of the Company or of any substantial part of the property of the Company or any Significant Subsidiary of the Company, or the making by the Company or any Significant Subsidiary of the Company of an assignment for the benefit of
creditors, or the taking of corporate action by the Company or any Significant Subsidiary of the Company in furtherance of any such action; or
(7) default in the delivery of any shares of Common Stock, together with cash in lieu of fractional shares, or any other securities or property (including cash) when required to be delivered upon
conversion of any convertible Security of such Series or upon the exchange of any Security of such Series which is exchangeable for other securities or property, and continuance of such default for a period of 10 days; or
(8) any other Event of Default provided in or pursuant to this Indenture with respect to Securities of such Series.
|
|
Section 502.
|
Acceleration of Maturity; Rescission and Annulment
.
|
If an Event of Default (other than an Event of Default specified in clause (5) or (6) of
Section 501
) with respect to Securities of any Series occurs and is continuing, then either
the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of such Series may declare the principal of all the Securities of such Series, or such lesser amount as may be provided for in the Securities
of such Series, and accrued and unpaid interest, if any, thereon to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders), and upon any such declaration such principal or such lesser
amount, as the case may be, and such accrued and unpaid interest shall become immediately due and payable. If an Event of Default specified in clause (5) or (6) of
Section 501
occurs, then the principal amount of all of the
Securities of such Series Outstanding, or such lesser amount as may be provided for in the Securities of such Series, and accrued and unpaid interest, if any, on all Securities of all Series Outstanding shall become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any Holder of the Securities of such Series.
At
any time after the occurrence of an Event of Default with respect to Securities of one or more Series and before a judgment or decree for payment of the money due has been obtained by the Trustee as provided below in this
Article Five
,
the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of all affected Series (voting as one class), by written notice to the Company and the Trustee may waive all defaults with respect to all affected
Series, and may rescind and annul the consequences of the Event of Default, if:
(1) the Company has paid or deposited with
the Trustee a sum of money sufficient to pay (or, to the extent that the terms of the Securities of such Series established pursuant to
Section 301
expressly provide for payment to be made in shares of Common Stock or other securities or
property, shares of Common Stock or other securities or property, together with cash in lieu of fractional shares or securities, sufficient to pay)
(a) all overdue installments of any interest on any Securities of such Series that have become due otherwise than by such declaration of acceleration,
(b) the principal of and any premium on any Securities of such Series which have become due otherwise than by such
declaration of acceleration and, to the extent permitted by applicable law, interest thereon at the rate or respective rates, as the case may be, provided for in or with respect to such Securities, or, if no such rate or rates are so provided, at
the rate or respective rates, as the case may be, of interest borne by such Securities,
(c) to the extent
permitted by applicable law, interest upon installments of any interest, if any, which have become due otherwise than by such declaration of acceleration at the rate or respective rates, as the case may be, provided for in or with respect to such
Securities, or, if no such rate or rates are so provided, at the rate or respective rates, as the case may be, of interest borne by such Securities, and
(d) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due the Trustee
under
Section 607
; and
(2) all Events of Default with respect to Securities of all affected Series other than the
nonpayment of the principal of, or any premium and interest on, Securities of the affected Series that shall have become due solely by such acceleration, shall have been cured or waived as provided in
Section 513
.
26
No such rescission shall affect any subsequent default or impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall
have been accelerated and declared due and payable pursuant to the provisions of this Indenture, then, from and after the date of such Event of Default, unless such Event of Default has been rescinded and annulled as provided above, the principal
amount of such Original Issue Discount Securities shall be deemed, for all purposes under this Indenture, to be such portion of the principal as shall be due and payable as a result of such acceleration, and the payment of such portion of the
principal as shall be due and payable as a result of such acceleration, together with interest, if any, on such portion and all other amounts owing under such Original Issue Discount Security, shall constitute payment in full of such Original Issue
Discount Securities.
|
|
Section 503.
|
Collection of Indebtedness and Suits for Enforcement by Trustee.
|
The Company covenants that if:
(1) default is made in the payment of any
interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days,
(2)
default is made in the payment of the principal of (or premium, if any, on) any Security at its Maturity, or
(3) default is
made in the making or satisfaction of any sinking fund or analogous obligation when the same becomes due pursuant to the terms of any Security,
the Company will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and
payable with respect to such Securities, with interest upon the overdue principal, any premium and, to the extent permitted by applicable law, upon any overdue installments of interest at the rate or respective rates, as the case may be, provided
for or with respect to such Securities or, if no such rate or rates are so provided, at the rate or respective rates, as the case may be, of interest borne by such Securities, and, in addition thereto, such further amount of money as shall be
sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due to the Trustee under
Section 607
.
If the Company fails to pay the money it is required to pay the Trustee pursuant to the preceding paragraph forthwith upon
the demand of the Trustee, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Securities and collect the monies adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities,
wherever situated.
If an Event of Default with respect to Securities of any Series occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other proper remedy.
27
|
|
Section 504.
|
Trustee May File Proofs of Claim.
|
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other
obligor upon the Securities or the property of the Company or such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities of a Series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of any overdue principal, premium or interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(1) to file and prove a claim for the whole amount, or such lesser amount as may be provided for in the Securities
of such Series, of the principal and any premium or interest owing and unpaid in respect of such Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents or counsel) and of the Holders of such Securities allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is authorized by each
Holder of Securities to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities and to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee under
Section 607
.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Security any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, the Trustee may vote on behalf of the Holders for
the election of a trustee in bankruptcy or similar official and may be a member of a creditors or other similar committee.
|
|
Section 505.
|
Trustee May Enforce Claims Without Possession of Securities.
|
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production of such Securities in
any related proceeding, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses,
disbursements, and advances of the Trustee, its agents, and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
|
|
Section 506.
|
Application of Money Collected.
|
Any money collected by the Trustee pursuant to this
Article Five
or, after an Event of Default, any money or other property distributable in respect of the Company’s obligations under
this Indenture shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation
on such Securities of the payment if only partially paid and upon surrender of such Securities if fully paid:
FIRST: To the
payment of all amounts due the Trustee and any predecessor Trustee under
Section 607
;
SECOND: To the payment of
the amounts then due and unpaid upon the Securities for principal and any premium and interest in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the
aggregate amounts due and payable on such Securities for principal and any premium, interest; and
THIRD: The balance, if any,
to the Person or Persons entitled thereto.
28
|
|
Section 507.
|
Limitation on Suits.
|
No
Holder of any Security of any Series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy under this Indenture, unless:
(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the
Securities of that Series;
(2) the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities
of that Series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee under the Indenture;
(3) such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses, and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request, and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of the Outstanding Securities of that Series;
it being understood and intended that
no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb, or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner provided in this Indenture and for the equal and ratable benefit of all of such Holders.
|
|
Section 508.
|
Unconditional Right of Holders to Receive Principal, Premium and Interest.
|
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and
(subject to
Section 305
and
Section 307
) any interest on such Security on the respective Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and, in the case of any
Security that is convertible into or exchangeable for other securities or property, to convert or exchange, as the case may be, such Security in accordance with its terms), and to institute suit for the enforcement of any such payment and such
rights shall not be impaired without the consent of such Holder.
|
|
Section 509.
|
Restoration of Rights and Remedies.
|
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions under this
Indenture and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
|
|
Section 510.
|
Rights and Remedies Cumulative.
|
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost, or stolen Securities in the last paragraph of
Section 306
, no right or remedy conferred
in this Indenture upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and
remedy given under this Indenture or now or in the future existing at law or in equity or otherwise. The assertion or employment of any right or remedy under this Indenture, or otherwise, shall not prevent the concurrent assertion or employment of
any other appropriate right or remedy.
29
|
|
Section 511.
|
Delay or Omission Not Waiver.
|
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of or
acquiescence in any such Event of Default. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
|
|
Section 512.
|
Control by Holders.
|
The
Holders of a majority in aggregate principal amount of the Outstanding Securities of any Series shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Securities of such Series, provided that
(1) such direction shall not
be in conflict with any rule of law or with this Indenture or with the Securities of any Series,
(2) the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such direction, and
(3) the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability.
|
|
Section 513.
|
Waiver of Past Defaults.
|
Subject to
Section 502
, the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of
any Series may on behalf of the Holders of all the Securities of such Series waive any past default under this Indenture with respect to such Series and its consequences, except a default (1) in the payment of the principal of, or any premium
or interest on, any Security of such Series, or (2) in respect of a covenant or provision of this Indenture which under
Article Nine
cannot be modified or amended without the consent of the Holder of each Outstanding Security of
such affected Series.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising from such
default shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any consequent right.
|
|
Section 514.
|
Waiver of Usury, Stay or Extension Laws.
|
The Company covenants that (to the extent that it may lawfully do so) it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or any other law wherever enacted, now or at any time hereafter in force, which would prohibit or forgive the Company from paying all or any portion of the principal of or premium, if any, or interest, if any, on any
Securities as contemplated herein and therein or which may affect the covenants or the performance of this Indenture or the Securities; and the Company (to the extent that it may lawfully do so) expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee or the Holders, but will suffer and permit the execution of every such power as though no such law had been enacted.
|
|
Section 515.
|
Undertaking for Costs.
|
All parties to this Indenture agree, and each Holder of any Securities by his acceptance of such Securities shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered, or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and that such
30
court may in its discretion assess reasonable costs, including reasonable attorney’s 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 515
shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any Series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or
interest, if any, on any Securities on or after the Stated Maturity or Maturities expressed in such Securities (or, in the case of redemption, on or after the Redemption Date) or for the enforcement of the right, if any, to convert or exchange any
Security into Common Stock or other securities in accordance with its terms).
ARTICLE SIX
THE TRUSTEE
|
|
Section 601.
|
Duties of Trustee.
|
(1)
If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it hereby, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.
(2) Except during the continuance of an Event of Default:
(a) the duties of the Trustee will be determined solely by the express provisions hereof and the Trustee need
perform only those duties that are specifically set forth herein and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements hereof. However, the Trustee will examine the certificates and opinions to determine whether or not they conform
to the requirements hereof.
(3) Whether or not therein expressly so provided, every provision hereof that in any way relates
to the Trustee is subject to paragraphs (1) and (2) of this Section 601 and to Section 602.
(4) No
provision hereof will require the Trustee to expend or risk its own funds or incur any liability.
(5) The Trustee will not be
liable for interest on any money received by it except as the Trustee may agree in writing with the Company.
|
|
Section 602.
|
Certain Rights of Trustee.
|
Subject to Section 315(a) through Section 315(d) of the Trust Indenture Act:
(1) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or a
Company Order (in each case, other than delivery of any Security, to the Trustee for authentication and delivery pursuant to
Section 303
which shall be sufficiently evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence shall be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers’ Certificate;
31
(4) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. The Trustee may
act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.
(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by or pursuant to this Indenture at the request or direction of any of the Holders of Securities of any
Series pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities that might be incurred by it in compliance with such request or
direction;
(6) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine, during business hours and upon reasonable notice, the books, records and premises of the Company,
personally or by agent or attorney, at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation;
(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;
(8) the Trustee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
(9) in no event shall the Trustee be responsible or liable for special, indirect or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;
(10) The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default, except failure by the Company
to pay or cause to be made any of the payments required to be made to the Trustee, unless a Responsible Officer shall be specifically notified by a writing of such Default by the Company or by the Holders of at least 25% in aggregate principal
amount of the Outstanding Securities then outstanding delivered to the Corporate Trust Office of the Trustee and in the absence of such notice so delivered the Trustee may conclusively assume no Default exists.
(11) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and
(12) the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture.
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|
Section 603.
|
Notice of Defaults.
|
Within 90 days after the Trustee is notified of the occurrence of any default hereunder with respect to the Securities of any Series, the
Trustee shall transmit by mail to all Holders of Securities of such Series entitled to receive reports pursuant to
Section 703(3)
, notice of such default hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment of
32
the principal of (or premium, if any), or interest, if any, on, any Security of such Series, the Trustee shall be protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the best interest of the Holders of Securities of such Series; and provided,
further, that in the case of any default of the character specified in
Section 501(4)
or
Section 501(8)
with respect to Securities of such Series, no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term “default” means any event that is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such Series.
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|
Section 604.
|
Not Responsible for Recitals or Issuance of Securities.
|
The recitals contained herein and in the Securities, except the Trustee’s certificate of authentication, shall be taken as the statements of the Company and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities, except that the Trustee represents that it is duly authorized to execute and
deliver this Indenture, authenticate the Securities and perform its obligations hereunder and that the statements made by it in a Statement of Eligibility on Form T-1 supplied to the Company are true and accurate, subject to the qualifications set
forth therein. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of the Securities or the proceeds thereof. The Trustee will not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities or any money paid to the Company or upon the Company’s direction under any provision hereof, it
will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection
with the sale of the Securities or pursuant to this Indenture other than its certificate of authentication.
|
|
Section 605.
|
May Hold Securities.
|
The
Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other Person that may be an agent of the Trustee or the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject
to Section 310(b) and Section 311 of the Trust Indenture Act, may otherwise deal with the Company with the same rights that it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other Person.
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|
Section 606.
|
Money Held in Trust.
|
Except as provided in
Section 403
and
Section 1003
, money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law and shall be held uninvested. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.
|
|
Section 607.
|
Compensation and Reimbursement.
|
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by the Trustee hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as
may be attributable to the Trustee’s negligence or bad faith; and
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(3) to indemnify each of the Trustee or any predecessor Trustee and their agents for, and to
hold them harmless against, any loss, liability or reasonable expense (including, without limitation, the reasonable fees and disbursements of the Trustee’s agents, legal counsel, accountants and experts) and including taxes (other than taxes
based upon, measured by or determined by the income of the Trustee), incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the
reasonable costs and expenses of defending themselves against any claim (whether asserted by the Company, or any Holder or any other Person) or liability in connection with the exercise or performance of any of their powers or duties hereunder, or
in connection with enforcing the provisions of this Section, except to the extent that any such loss, liability or expense was due to the Trustee’s negligence or bad faith.
As security for the performance of the obligations of the Company under this Section, the Trustee shall have a lien prior to the
Securities of any Series upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of, or premium or interest on Securities. Such lien will survive the satisfaction and discharge
hereof.
Any compensation or expense incurred by the Trustee after a default specified by
Section 501(5)
or
Section 501(6)
is intended to constitute an expense of administration under any then applicable bankruptcy or insolvency law. “Trustee” for purposes of this
Section 607
shall include any predecessor Trustee, but the
negligence or bad faith of any Trustee shall not affect the rights of any other Trustee under this
Section 607
. The provisions of this
Section 607
shall, to the extent permitted by law, survive any termination of this
Indenture (including, without limitation, termination pursuant to any Bankruptcy Laws) and the resignation or removal of the Trustee.
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Section 608.
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Corporate Trustee Required; Eligibility.
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(1) There shall at all times be a Trustee hereunder that is a corporation, organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia,
eligible under Section 310(a)(1) of the Trust Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act and that has a combined capital and surplus (computed in accordance with Section 310(a)(2) of the
Trust Indenture Act) of at least $50,000,000 subject to supervision or examination by federal or state authority. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
(2) The following indenture shall be considered
specifically described herein for purposes of clause (i) of the proviso contained in Section 310(b)(1) of the Trust Indenture Act: Senior Debt Indenture dated as of June 25, 2014 between the Company and Wells Fargo Bank, National
Association, as trustee; and, pursuant to Section 310(b)(1)(C)(i) of the Trust Indenture Act, unless otherwise ordered by the Commission, an event of default by the Company under this Indenture will not disqualify the Trustee under this
Indenture because it is the trustee under such other indenture.
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Section 609.
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Resignation and Removal; Appointment of Successor.
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(1) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this
Article Six
shall become effective until the acceptance of appointment by the successor
Trustee pursuant to
Section 610
.
(2) The Trustee may resign at any time with respect to the Securities of one or
more Series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by
Section 610
shall not have been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may, at the Company’s expense, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to such Series.
(3) The Trustee may be removed at any time with respect to the Securities of any Series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such Series, delivered to the Trustee and the Company.
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(4) If at any time:
(a) the Trustee shall fail to comply with the obligations imposed upon it under
Section 310(b)
of the Trust
Indenture Act with respect to Securities of any Series after written request therefor by the Company or any Holder of a Security of such Series who has been a bona fide Holder of a Security of such Series for at least six months, or
(b) the Trustee shall cease to be eligible under
Section 608
and shall fail to resign after written request
therefor by the Company or any such Holder, or
(c) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board Resolution, may remove the Trustee with respect to all
Securities or the Securities of such Series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder of a Security who has been a bona fide Holder of a Security of such Series 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 Trustee with respect to all Securities of such Series and the appointment of a successor Trustee or Trustees.
(5) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any
cause, with respect to the Securities of one or more Series, the Company, by or pursuant to a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those Series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of one or more or all of such Series and that at any time there shall be only one Trustee with respect to the Securities of any particular Series) and shall comply with the
applicable requirements of
Section 610
. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any Series shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities of such Series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of
Section 610
, become the successor Trustee with respect to the Securities of such Series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any Series shall have been so appointed by the Company or the Holders of Securities and accepted appointment in the manner required by
Section 610
, any Holder of a Security who has been a bona fide Holder of a
Security of such Series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such Series.
(6) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any
Series and each appointment of a successor Trustee with respect to the Securities of any Series by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Securities, if any, of such Series as their names and
addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such Series and the address of its Corporate Trust Office.
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Section 610.
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Acceptance of Appointment by Successor.
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(1) Upon the appointment hereunder of any successor Trustee with respect to all Securities, such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties hereunder of the retiring Trustee; but, on the request of the Company or such successor Trustee, such retiring Trustee, upon payment of its charges, shall execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and, subject to
Section 1003
, shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder,
subject nevertheless to its claim, if any, provided for in
Section 607
.
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(2) Upon the appointment hereunder of any successor Trustee with respect to the Securities
of one or more (but not all) Series, the Company, the retiring Trustee and such successor Trustee shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, such successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those Series to
which the appointment of such successor Trustee relates, (ii) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those Series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute
such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible
for any notice given to, or received by, or any act or failure to act on the part of any other Trustee hereunder, and, upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein, such retiring Trustee shall have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture with respect
to the Securities of that or those Series to which the appointment of such successor Trustee relates other than as hereinafter expressly set forth, and such successor Trustee, without any further act, deed or conveyance, shall become vested with all
the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those Series to which the appointment of such successor Trustee relates; but, on request of the Company or such successor Trustee, such retiring
Trustee, upon payment of its charges with respect to the Securities of that or those Series to which the appointment of such successor relates and subject to
Section 1003
shall duly assign, transfer and deliver to such successor Trustee,
to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those Series to which the appointment of such successor Trustee relates, subject to
its claim, if any, provided for in
Section 607
.
(3) Upon request of any Person appointed hereunder as a successor
Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (1) or (2) of this Section, as the case
may be.
(4) No Person shall accept its appointment hereunder as a successor Trustee unless at the time of such acceptance
such successor Person shall be qualified and eligible under this Article.
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Section 611.
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Merger, Conversion, Consolidation or Succession to Business.
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Any corporation into which the 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 Trustee shall
be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder (provided that such corporation shall otherwise be qualified and eligible under
this Article), without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated but not delivered by the Trustee then in office, any such successor to such
authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. In case any Securities shall not have been authenticated by
such predecessor Trustee, any such successor Trustee may authenticate and deliver such Securities in either its own name or that of its predecessor Trustee.
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Section 612.
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Appointment of Authenticating Agent.
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The Trustee may appoint one or more Authenticating Agents acceptable to the Company with respect to one or more Series of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of that or those Series issued upon original issue, exchange, registration of transfer, partial redemption, partial repayment, partial conversion or exchange for Common Stock or other securities or property, or pursuant to
Section 306
, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this
36
Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be reasonably acceptable to the Company and, except as provided in or pursuant to this Indenture, shall at all times be a corporation that would be permitted by the Trust
Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act, is authorized under applicable law and by its charter to act as an Authenticating Agent and has a combined capital and surplus (computed in accordance with
Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000. 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 specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate agency or corporate
trust business of an Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and the Company. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent that shall be acceptable to the Company and
shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities, if any, of the Series with respect to which such Authenticating Agent shall serve, as their names and addresses appear in the Security
Register. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the provisions of this
Section 612
.
The Company agrees to pay each Authenticating Agent from time to time reasonable compensation for its services under this Section. If the
Trustee makes such payments, it shall be entitled to be reimbursed for such payments, subject to the provisions of
Section 607
.
The provisions of
Section 308
,
Section 604
and
Section 605
shall be applicable to each Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more Series of Securities pursuant to this Section, the Securities of such
Series may have endorsed thereon, in addition to or in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in substantially the following form:
This is one of the Securities of the Series designated herein referred to in the within-mentioned Indenture.
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as Trustee
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By:
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As Authenticating Agent
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By:
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Authorized Signatory
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If all of the Securities of any Series may not be originally issued at one time, and if the Trustee
does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the
37
Company desires to have Securities of such Series authenticated upon original issuance, the Trustee, if so requested in writing (which writing need not be accompanied by or contained in an
Officers’ Certificate of the Company), shall appoint in accordance with this Section an Authenticating Agent having an office in a Place of Payment designated by the Company with respect to such Series of Securities.
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
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Section 701.
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Company to Furnish Trustee Names and Addresses of Holders.
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In accordance with Section 312(a) of the Trust Indenture Act, the Company shall furnish or cause to be furnished to the Trustee
(1) semi-annually with respect to Securities of each Series not later than and of the year or upon such other dates as are set forth in
or pursuant to the Board Resolution or indenture supplemental hereto authorizing such Series, a list, in each case in such form as the Trustee may reasonably require, of the names and addresses of Holders as of the applicable date, and
(2) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the time such list is furnished,
provided, however, that so long
as the Trustee is the Security Registrar no such list shall be required to be furnished.
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Section 702.
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Preservation of Information; Communications to Holders.
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The Trustee shall comply with the obligations imposed upon it pursuant to Section 312 of the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company, the Trustee, any Paying Agent or any Security Registrar 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 Section 312(c) of the Trust Indenture Act, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act.
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Section 703.
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Reports by Trustee.
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(1)
Within 60 days after July 15 of each year commencing with the first July 15 following the first issuance of Securities pursuant to
Section 301
, if required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report dated as of such July 15 with respect to any of the events specified in said Section 313(a) and Section 313(b)(2) that may have occurred since the
later of the immediately preceding July 15 and the date of this Indenture.
(2) The Trustee shall transmit the reports
required by Section 313(a) of the Trust Indenture Act at the times specified therein.
(3) Reports pursuant to this
Section shall be transmitted in the manner and to the Persons required by Section 313(c) and Section 313(d) of the Trust Indenture Act.
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Section 704.
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Reports by Company.
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(1)
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
(a) file with the Trustee,
within 15 days after the Company files 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 the Commission may from time to time by
rules and regulations prescribe) that the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and
reports that may be 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) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the
Commission, such additional certificates, information, documents and reports with respect to compliance by the Company, with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and
(c) transmit within 30 days after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).
(2) The Company intends to file the reports referred to in
Section 704(1)
with the Commission in electronic form
pursuant to Regulation S-T of the Commission using the Commission’s Electronic Data Gathering, Analysis and Retrieval system. Compliance with the foregoing, or any successor electronic system approved by the Commission, shall constitute
delivery by the Company of such reports to the Trustee and Holders in compliance with the provision of
Section 704(1)
and TIA Section 314(a). Notwithstanding anything to the contrary herein, the Trustee shall have no duty to search
for or obtain any electronic or other filings that the Company makes with the Commission, regardless of whether such filings are periodic, supplemental or otherwise. Delivery of the reports, information and documents to the Trustee pursuant to this
Section 704(2)
shall be solely for the purposes of compliance with this
Section 704(2)
and with TIA Section 314(a). The Trustee’s receipt of such reports, information and documents shall not constitute notice to it
of the content thereof or of any matter determinable from the content thereof (and the Trustee shall not have any duty to ascertain or inquire as to such content or matter), including the Company’s compliance with any of its covenants
hereunder, as to which the Trustee is conclusively entitled to rely upon Officers’ Certificates.
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
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Section 801.
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Company May Consolidate, Etc., Only on Certain Terms.
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The Company shall not, in any transaction or series of related transactions, consolidate with or merge into any Person or sell, assign, transfer, lease or otherwise convey all or substantially all its
properties and assets to any Person, unless:
(1) either (A) the Company shall be the continuing Person (in the case of a
merger), or (B) the successor Person (if other than the Company) formed by such consolidation or into which the Company is merged or which acquires by sale, assignment, transfer, lease or other conveyance all or substantially all the properties
and assets of the Company shall be a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume, by an indenture (or indentures, if at such time there
is more than one Trustee) supplemental hereto, executed by such successor corporation and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, any premium and
39
interest on, all the Outstanding Securities and the due and punctual performance and observance of every obligation in this Indenture and the Outstanding Securities on the part of the Company to
be performed or observed, and which supplemental indenture shall provide for conversion or exchange rights in accordance with the provisions of the Securities of any Series that are convertible or exchangeable into Common Stock or other securities;
(2) immediately after giving effect to such transaction and treating any indebtedness that becomes an obligation of the
Company or any Subsidiary as a result of that transaction as having been incurred by the Company or any Subsidiary at the time of the transaction, no Event of Default, and no event which, after notice or lapse of time, or both, would become an Event
of Default, shall have occurred and be continuing; and
(3) either the Company or the successor Person shall have delivered to
the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, assignment, transfer, lease or other conveyance and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this
Article Eight
and that all conditions precedent herein provided for relating to such transaction have been complied with.
For purposes of the foregoing, any sale, assignment, transfer, lease or other conveyance of all or any of the properties and assets of
one or more Subsidiaries of the Company (other than to the Company or another Subsidiary), which, if such properties and assets were owned by the Company, would constitute all or substantially all of the Company’s properties and assets, shall
be deemed to be the transfer of all or substantially all of the properties and assets of the Company.
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Section 802.
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Successor Person Substituted for Company.
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Upon any consolidation by the Company with or merger of the Company into any other Person or any sale, assignment, transfer, lease or conveyance of all or substantially all of the properties and assets of
the Company to any Person in accordance with
Section 801
, the successor Person formed by such consolidation or into which the Company is merged or to which such sale, assignment, transfer, lease or other conveyance is made shall succeed
to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; and thereafter, except in the case of a lease, the
predecessor Person shall be released from all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
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Section 901.
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Supplemental Indentures without Consent of Holders.
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Without the consent of any Holders of Securities, the Company (when authorized by or pursuant to a Board Resolution) and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the
succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company contained herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders of all or any Series of Securities (as shall be specified in such supplemental indenture or indentures) or to surrender any right
or power herein conferred upon the Company with respect to all or any Series of Securities issued under this Indenture (as shall be specified in such supplemental indenture or indentures); or
(3) to permit or facilitate the issuance of Securities of a Series in uncertificated or global form, provided any such action shall not
adversely affect the interests of the Holders of Securities of any Series; or
(4) to establish any Series of Securities and
the form or terms of Securities of any Series as permitted by
Section 201
and
Section 301
, including, without limitation, any conversion or exchange provisions applicable to
40
Securities that are convertible into or exchangeable for other securities or property, and any deletions from or additions or changes to this Indenture in connection therewith (provided that any
such deletions, additions and changes shall not be applicable to any other Series of Securities then Outstanding); or
(5) to
evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of
Section 610
; or
(6) (a) to cure any ambiguity or to correct or supplement any provision herein that may be defective or that may be inconsistent with any other provision herein or (b) to make any other provisions
with respect to matters or questions arising under this Indenture that shall not adversely affect the interests of the Holders of Securities of any Series then Outstanding in any material respect; or
(7) to add any additional Events of Default with respect to all or any Series of Securities (as shall be specified in such supplemental
indenture); or
(8) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or
facilitate the defeasance, covenant defeasance and/or satisfaction and discharge of any Series of Securities pursuant to
Article Four
, provided that any such action shall not adversely affect the interests of any Holder of a Security of
such Series or any other Security in any material respect; or
(9) to secure the Securities; or
(10) to make provisions with respect to conversion or exchange rights of Holders of Securities of any Series; or
(11) to amend, supplement or eliminate any provision contained herein or in any supplemental indenture or in any Securities (which
amendment or supplement may apply to one or more Series of Securities or to one or more Securities within any Series as specified in such supplemental indenture or indentures), provided that such amendment, supplement or elimination does not apply
to any Outstanding Security issued prior to the date of such supplemental indenture and entitled to the benefits of such provision; or
(12) in the case of any Series of Securities which are convertible into or exchangeable for Common Stock or other securities or property, to safeguard or provide for the conversion or exchange rights, as
the case may be, of such Securities in the event of any reclassification or change of outstanding shares of Common Stock or any merger, consolidation, statutory share exchange or combination of the Company with or into another Person or any sale,
lease, assignment, transfer, disposition or other conveyance of all or substantially all of the properties and assets of the Company to any other Person or other similar transactions, if expressly required by the terms of such Series of Securities
established pursuant to
Section 301
; or
(13) to add to, delete from or revise the conditions, limitations or
restrictions on issue, authentication and delivery of Securities of any Series; or
(14) to conform any provision in this
Indenture to the requirements of the Trust Indenture Act; or
(15) to make any change that does not adversely affect the legal
rights under this Indenture of any Holder of Securities of any Series issued under this Indenture.
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Section 902.
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Supplemental Indentures with Consent of Holders.
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With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each Series affected by such supplemental indenture, by Act of said Holders delivered to
the Company and the Trustee, the Company (when authorized by or pursuant to a Board Resolution), and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of the Securities of such Series or of modifying in any manner the rights of the Holders of Securities of such Series under this Indenture; provided, that no such supplemental indenture, without
the consent of the Holder of each Outstanding Security affected thereby, shall
(1) change the Stated Maturity of the
principal of, or premium, if any, or any installment of interest, if any, on, any Security, or reduce the principal amount thereof or the premium, if any, thereon or the rate (or modify the calculation of such rate) of interest thereon, or reduce
the amount payable upon redemption thereof at the option of the Company or repayment thereof at the option of the Holder, or reduce the amount of the principal of any Original Issue Discount Security that would be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to
Section 502
or the amount thereof provable in bankruptcy pursuant to
Section 504
, or extend the time of payment of interest on any Security, or change any of the conversion,
exchange or redemption provisions of any Security or change the Place of Payment where the principal of, any premium or interest on, any Security is payable, or impair the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), in each case as such Stated Maturity, Redemption Date or date for repayment may, if applicable, be extended in accordance with the terms of such Security,
or in the case of any Security that is convertible into or exchangeable for other securities or property, impair the right to institute suit to enforce the right to convert or exchange such Security in accordance with its terms or modify the ranking
or priority of the Securities in a manner adverse to the Holders of the Securities, or
(2) reduce the percentage in principal
amount of the Outstanding Securities of any Series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in
Section 513
or
Section 1006
of this Indenture, or reduce the requirements of
Section 1404
for quorum or voting, or
(3) modify any of the provisions of this
Section 902
,
Section 513
or
Section 1006
, except to increase
any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby.
A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture which shall have been included
solely for the benefit of one or more particular Series of Securities, or which modifies the rights of the Holders of Securities of such Series with respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other Series.
Anything in this Indenture to the contrary notwithstanding, if
more than one Series of Securities is Outstanding, the Company shall be entitled to enter into a supplemental indenture under this
Section 902
with respect to any one or more Series of Outstanding Securities without entering into a
supplemental indenture with respect to any other Series of Outstanding Securities.
It shall not be necessary for any Act of
Holders of Securities under this
Section 902
to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
|
|
Section 903.
|
Execution of Supplemental Indentures.
|
As a condition to executing, or accepting the additional trusts created by, any supplemental indenture permitted by this
Article Nine
or the modifications thereby of the trust created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section 315(a) through Section 315(d) of the Trust Indenture Act) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel to the
effect that the execution of such supplemental indenture is authorized or permitted by this Indenture and that such supplemental indenture has been duly authorized, executed and delivered by, and is a valid, binding and enforceable obligation of,
the Company, subject to customary exceptions. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
42
|
|
Section 904.
|
Effect of Supplemental Indentures.
|
Upon the execution of any supplemental indenture under this
Article Nine
, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of a Security theretofore or thereafter authenticated and delivered hereunder.
|
|
Section 905.
|
Reference in Securities to Supplemental Indentures.
|
Securities of any Series authenticated and delivered after the execution of any supplemental indenture pursuant to this
Article Nine
may, and shall if required by the Trustee, bear a notation
in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any Series so modified as to conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such Series.
|
|
Section 906.
|
Conformity with Trust Indenture Act.
|
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.
ARTICLE TEN
COVENANTS
|
|
Section 1001.
|
Payment of Principal, Premium, Interest.
|
The Company covenants and agrees for the benefit of the Holders of the Securities of each Series that it will duly and punctually pay the principal of, any premium and interest on the Securities of such
Series, whether payable in cash, shares of Common Stock or other securities or property, in accordance with the terms thereof and this Indenture.
|
|
Section 1002.
|
Maintenance of Office or Agency.
|
The Company shall maintain in each Place of Payment for any Series of Securities an Office or Agency where Securities of such Series may be presented or surrendered for payment, where Securities of such
Series may be surrendered for registration of transfer or exchange, where Securities of such Series that are convertible or exchangeable may be surrendered for conversion or exchange, and where notices and demands to or upon the Company in respect
of the Securities of such Series relating thereto and this Indenture may be served, provided that, if (i) the City of Dallas, Texas, is a Place of Payment for the Securities of any Series, (ii) there shall be another Place of Payment in
the United States of America for such Securities in addition to the City of Dallas, Texas, and (iii) all Securities of such Series are originally issued solely in the form of one or more permanent global Securities, then the Company shall not
be required to maintain any such office or agency in the City of Dallas, Texas, unless and until all or any portion of such global Securities shall be exchanged for or otherwise issued as definitive certificated Securities of such Series as
contemplated by the last paragraph of this
Section 1002
. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such Office or Agency. If at any time the Company shall fail to
maintain any such required Office or Agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.
The Company may also
from time to time designate one or more other Offices or Agencies where the Securities of one or more Series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no
such designation or rescission shall in any manner relieve the Company of its obligation to maintain an Office or Agency in each Place of Payment for Securities of any Series for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location of any such other Office or Agency.
43
Unless otherwise provided in or pursuant to this Indenture, the Company hereby designates
the City of Dallas, Texas, as a Place of Payment for each Series of Securities, initially appoints the Corporate Trust Office of the Trustee in the City of Dallas, Texas, as the Company’s Office or Agency in the City of Dallas, Texas, for such
purpose and initially appoints the Trustee as the Security Registrar for each Series of Securities and, if the Securities of any Series are convertible into or exchangeable for Common Stock or other securities or property, initially appoints the
Trustee as conversion or exchange agent, as the case may be, for the Securities of such Series. The Company may subsequently appoint a different Office or Agency in the City of Dallas, Texas or the Borough of Manhattan, the City of New York, and, as
provided in
Section 305
, may remove and replace from time to time the Security Registrar.
As set forth above in
this
Section 1002
, and unless otherwise provided pursuant to
Section 301
with respect to any Series of Securities, in the event that the Securities of a Series are originally issued solely in the form of one or more permanent
global Securities and if at any time thereafter Securities of such Series are issued in definitive certificated form in exchange for all or any portion of such global Securities (whether pursuant to
Section 305
or otherwise pursuant to
the terms of such Securities), the Company shall, at all times from and after the date of the first such exchange until such time as no Securities of such Series in definitive certificated form are Outstanding, establish and maintain an Office or
Agency in the City of Dallas, Texas (in addition to any other Offices or Agencies the Company is required to maintain in respect of such Securities) where Securities of such Series may be surrendered and where notices and demands in respect of
Securities of such Series and this Indenture may be served for the purposes specified in, and as contemplated by, the first paragraph of this
Section 1002
.
|
|
Section 1003.
|
Money for Securities Payments to Be Held in Trust.
|
If the Company shall at any time act as its own Paying Agent with respect to any Series of Securities, it shall, on or before each due date of the principal of, any premium or interest on any of the
Securities of such Series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum in Dollars sufficient to pay the principal, any premium and interest, as the case may be, so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided, and shall promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any Series of Securities, it shall, on or prior to each due date of the principal of, or any premium or interest on, any Securities of such
Series, deposit with any Paying Agent a sum in Dollars sufficient to pay the principal, premium and interest, as the case may be, so becoming due, such sum to be held in trust for the benefit of the Persons entitled thereto, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.
The Company shall
cause each Paying Agent for any Series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying
Agent shall:
(1) hold all sums held by it for the payment of the principal of, any premium or interest on the Securities of
such Series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as provided in or pursuant to this Indenture;
(2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of such Series) in the making of any
payment of principal, any premium or interest on the Securities of such Series; and
(3) at any time during the continuance of
any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
To the extent that the terms of any Securities established pursuant to
Section 301
provide that any principal of, or premium or interest, if any, on any such Securities is or may be payable in
Common Stock or other securities or property, then the provisions of this
Section 1003
shall apply,
mutatis mutandis
, to such Common Stock or other securities or property.
44
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same terms as those upon which
such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such sums.
Except as otherwise provided herein or pursuant hereto, any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of, any premium or interest on any Security of any Series and remaining unclaimed for two years after such principal or such premium or interest shall have become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such
repayment, may, not later than 30 days after the Company’s request for such repayment, at the expense of the Company cause to be published once, in an Authorized Newspaper in each Place of Payment for such Series or to be mailed to Holders of
Securities of such Series, or both, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing nor shall it be earlier than two years after
such principal and any premium or interest shall have become due and payable, any unclaimed balance of such money then remaining will be repaid to the Company.
|
|
Section 1004.
|
Corporate Existence.
|
Subject to
Article Eight
, the Company shall do or cause to be done all things necessary to preserve and keep in full force and
effect (i) the corporate existence of the Company, (ii) the existence (corporate or other) of each Significant Subsidiary of the Company and (iii) the rights (charter and statutory), licenses and franchises of the Company and each of
its Significant Subsidiaries; provided, however, that the Company shall not be required to preserve the existence (corporate or other) of any of its Significant Subsidiaries or any such right, license or franchise of the Company or any of its
Significant Subsidiaries if the Board of Directors of the Company determines that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Significant Subsidiaries taken as a whole and that the loss
thereof will not be disadvantageous in any material respect to the Holders.
|
|
Section 1005.
|
Maintenance of Properties.
|
The Company will, and will cause each Significant Subsidiary to, cause all its properties used or useful in the conduct of its business to
be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the
Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company or any Significant Subsidiary from
discontinuing the operation and maintenance of any of their respective properties if such discontinuance is, in the judgment of the Board of Directors of the Company or of any Significant Subsidiary, as the case may be, desirable in the conduct of
its business.
|
|
Section 1006.
|
Waiver of Certain Covenants.
|
The Company may omit in any particular instance to comply with any term, provision or condition set forth in
Section 1002
to
Section 1005
, inclusive, with respect to the Securities
of any Series and, if expressly provided pursuant to
Section 301(13)
, any additional covenants applicable to the Securities of such Series if before the time for such compliance the Holders of at least a majority in principal amount of
the Outstanding Securities of such Series, by Act of such Holders, either shall waive such compliance in such instance or generally shall have waived compliance with such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain
in full force and effect.
45
|
|
Section 1007.
|
Company Statement as to Compliance.
|
The Company shall deliver to the Trustee, within 180 days after the end of each fiscal year, a written statement (which need not be contained in or accompanied by an Officers’ Certificate) signed by
the principal executive officer, the principal financial officer or the principal accounting officer of the Company, stating whether or not, to the best of his or her knowledge, the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (without regard to notice requirements or periods of grace) and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which he or she may have
knowledge.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
|
|
Section 1101.
|
Applicability of Article.
|
Redemption of Securities of any Series at the option of the Company as permitted or required by the terms of such Securities shall be made
in accordance with the terms of such Securities and (except as otherwise provided herein or pursuant hereto) this Article.
|
|
Section 1102.
|
Election to Redeem; Notice to Trustee.
|
The election of the Company to redeem any Securities shall be evidenced by or pursuant to a Board Resolution. In case of any redemption at the election of the Company of less than all of the Securities of
any Series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of
such Series to be redeemed and, in the event that the Company shall determine that the Securities of any Series to be redeemed shall be selected from Securities of such Series having the same issue date, interest rate or interest rate formula,
Stated Maturity and other terms (the “
Equivalent Terms
”), the Company shall notify the Trustee of such Equivalent Terms.
In the case of any redemption of Securities (A) prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture or
(B) pursuant to an election of the Company that is subject to a condition specified in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish to the Trustee an Officers’ Certificate evidencing compliance
with such restriction or condition.
|
|
Section 1103.
|
Selection by Trustee of Securities to be Redeemed.
|
If less than all of the Securities of any Series are to be redeemed or if less than all of the Securities of any Series with Equivalent Terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the Trustee from the Outstanding Securities of such Series or from the Outstanding Securities of such Series with Equivalent Terms, as the case may be, not previously called for
redemption, unless otherwise required by law by lot or such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions of the principal amount of Securities of such Series; provided,
however, that no such partial redemption shall reduce the portion of the principal amount of a Security of such Series not redeemed to less than the minimum denomination for a Security of such Series established herein or pursuant hereto.
The Trustee shall promptly notify the Company and the Security Registrar (if other than itself) in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed
only in part, to the portion of the principal of such Securities which has been or is to be redeemed.
46
Unless otherwise specified in or pursuant to this Indenture or the Securities of any Series,
if any Security selected for partial redemption is converted or exchanged for Common Stock or other securities or property in part before termination of the conversion or exchange right with respect to the portion of the Security so selected, the
converted or exchanged portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted or exchanged during a selection of Securities to be redeemed shall be treated by the
Trustee as Outstanding for the purpose of such selection.
|
|
Section 1104.
|
Notice of Redemption.
|
Notice of redemption shall be given in the manner provided in
Section 106
, not less than 30 nor more than 60 days prior to the
Redemption Date, unless a shorter period is specified in the Securities to be redeemed, to the Holders of Securities to be redeemed. Failure to give notice by mailing in the manner herein provided to the Holder of any Securities designated for
redemption as a whole or in part, or any defect in the notice to any such Holder, shall not affect the validity of the proceedings for the redemption of any other Securities or portions thereof.
Any notice that is mailed to the Holder of any Securities in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any
Series are to be redeemed, the identification (and, in the case of partial redemption, the principal amount) of the particular Security or Securities to be redeemed,
(4) that, in case any Security is to be redeemed in part only, on and after the Redemption Date, upon surrender of such Security, the Holder of such Security will receive, without charge, a new Security
or Securities of authorized denominations for the principal amount thereof remaining unredeemed,
(5) that, on the Redemption
Date, the Redemption Price shall become due and payable upon each such Security or portion thereof to be redeemed, together (if applicable) with accrued and unpaid interest, if any, thereon (subject, if applicable, to the provisos to the first
paragraph of
Section 1106
), and, if applicable, that interest thereon shall cease to accrue on and after said date,
(6) the place or places where such Securities are to be surrendered for payment of the Redemption Price and any accrued interest
pertaining thereto,
(7) that the redemption is for a sinking fund, if such is the case,
(8) in the case of Securities of any Series that are convertible or exchangeable into Common Stock or other securities or property, the
then current conversion or exchange price or rate, the date or dates on which the right to convert or exchange the principal of the Securities of such Series to be redeemed will commence or terminate, as applicable, and the place or places where and
the Persons to whom such Securities may be surrendered for conversion or exchange,
(9) the CUSIP number reference numbers of
such Securities, if any (or any other numbers used by a Depositary to identify such Securities), and
(10) if the Redemption
Price or any portion thereof shall be payable, at the option of the Company or any Holders, in cash or in Common Stock or other securities or property (or a combination thereof), a statement as to whether the Company has elected to pay the
Redemption Price in cash or Common Stock or other securities or property or a combination thereof and, if applicable, the portion of the Redemption Price that is to be paid in cash, Common Stock or other securities or property.
47
A notice of redemption published as contemplated by
Section 106
need not
identify particular Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company’s request delivered at least 10 days before the date such notice is to be given (unless a shorter period shall be acceptable to the Trustee), by the Trustee in the name and at the expense
of the Company.
|
|
Section 1105.
|
Deposit of Redemption Price.
|
On or prior to noon (local time in the City of Dallas, Texas) on any Redemption Date, the Company shall deposit, with respect to the Securities of any Series called for redemption pursuant to
Section 1104
, with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003
) an amount of money in Dollars sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date, unless otherwise specified pursuant to
Section 301
for or in the Securities of such Series) any accrued interest on, all such Securities or
portions thereof which are to be redeemed on that date, except that, if the Securities of such Series are convertible or exchangeable into Common Stock or other securities or property, no such deposit shall be required with respect to any such
Securities (or portions thereof) which have been converted or exchanged prior to such Redemption Date.
|
|
Section 1106.
|
Securities Payable on Redemption Date.
|
Notice of redemption having been given as aforesaid, the Securities so to be redeemed (except, in the case of Securities which are convertible or exchangeable into Common Stock or other securities or
property, any such Securities which shall have been so converted or exchanged prior to the applicable Redemption Date) shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, together with (unless otherwise
provided with respect to the Securities of such Series pursuant to
Section 301
) accrued and unpaid interest, if any, thereon and from and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest, if any) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with, unless
otherwise provided in or pursuant to this Indenture, any accrued and unpaid interest thereon to but excluding the Redemption Date; provided, however, that, except as otherwise specified in or pursuant to this Indenture or the Securities of such
Series, installments of interest on Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the
Regular Record Dates therefor according to their terms and the provisions of
Section 307
.
If any Security called
for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium, until paid, shall bear interest from the Redemption Date at the rate prescribed therefor in the Security or, if no rate is prescribed therefor
in the Security, at the rate of interest, if any, borne by such Security.
|
|
Section 1107.
|
Securities Redeemed in Part.
|
Any Security which is to be redeemed only in part shall be surrendered at any Office or Agency for such Security (with, if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of the same Series, containing identical terms and provisions, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for
the unredeemed portion of the principal of the Security so surrendered. If a Security in global form is so surrendered, the Company shall execute, and the Trustee shall authenticate and deliver to the Depositary for such Security in global form as
shall be specified in the Company Order with respect thereto to the Trustee, without service charge, a new Security in global form in a denomination equal to and in exchange for the unredeemed portion of the principal of the Security in global form
so surrendered.
48
ARTICLE TWELVE
SINKING FUNDS
|
|
Section 1201.
|
Applicability of Article
.
|
The provisions of this
Article Twelve
shall be applicable to any sinking fund for the retirement of Securities of a Series
that by its terms provides for such a sinking fund, except as otherwise permitted or required in or pursuant to this Indenture or any Security of such Series issued pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any Series is herein referred to as a
“mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of such Series is herein referred to as an “optional sinking fund payment.” If provided for by the terms
of Securities of any Series, the cash amount of any sinking fund payment may be subject to reduction as provided in
Section 1202
. Each sinking fund payment shall be applied to the redemption of Securities of any Series as provided for by
the terms of Securities of such Series and this Indenture.
|
|
Section 1202.
|
Satisfaction of Sinking Fund Payments with Securities.
|
The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of such Securities (1) deliver
Outstanding Securities of such Series (other than any of such Securities previously called for redemption or any of such Securities in respect of which cash shall have been released to the Company) and (2) apply as a credit Securities of such
Series that have been redeemed either at the election of the Company pursuant to the terms of such Series of Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, provided that
such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities of any Series in lieu of cash payments pursuant to this
Section 1202
, the principal amount of Securities of such
Series to be redeemed in order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities of such Series for redemption, except upon Company Request, and such cash payment shall be held by the Trustee or
a Paying Agent and applied to the next succeeding sinking fund payment, provided, however, that the Trustee or such Paying Agent shall at the request of the Company from time to time pay over and deliver to the Company any cash payment so being held
by the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that Series purchased by the Company having an unpaid principal amount equal to the cash payment requested to be released to the Company.
|
|
Section 1203.
|
Redemption of Securities for Sinking Fund
.
|
Not less than 75 days prior to each sinking fund payment date for any Series of Securities, the Company shall deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing
mandatory sinking fund payment for that Series pursuant to the terms of that Series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to
Section 1202
, and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers’ Certificate shall specify an optional amount to be added in cash to the next ensuing mandatory sinking fund payment, the Company shall thereupon be obligated to pay the amount therein specified. Not less
than 60 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in
Section 1103
and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided in
Section 1104
. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in
Section 1106
and
Section 1107
.
49
ARTICLE THIRTEEN
[RESERVED]
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
|
|
Section 1401.
|
Purposes for Which Meetings May Be Called.
|
A meeting of Holders of Securities of any Series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice,
consent, waiver or other Act provided by this Indenture to be made, given or taken by Holders of Securities of such Series.
|
|
Section 1402.
|
Call, Notice and Place of Meetings.
|
(1) The Trustee may at any time call a meeting of Holders of Securities of any Series for any purpose specified in
Section 1401
, to be held at such time and at such place in the County of
Dallas, the City of Dallas, Texas. Notice of every meeting of Holders of Securities of any Series, 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 given, in the
manner provided in
Section 106
, not less than 21 nor more than 180 days prior to the date fixed for the meeting.
(2) In case at any time the Company (by or pursuant to a Board Resolution) or the Holders of at least 10% in principal amount of the
Outstanding Securities of any Series shall have requested the Trustee to call a meeting of the Holders of Securities of such Series for any purpose specified in
Section 1401
, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of or made the first publication of the notice of such meeting within 21 days after receipt of such request (whichever shall be required pursuant to
Section 106
) or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of Securities of such Series in the amount above specified, as the case may be, may determine the time and
the place in the County of Dallas, the City of Dallas, Texas, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in clause (1) of this Section.
|
|
Section 1403.
|
Persons Entitled to Vote at Meetings.
|
To be entitled to vote at any meeting of Holders of Securities of any Series, a Person shall be (1) a Holder of one or more Outstanding Securities of such Series, or (2) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such Series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any
Series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.
|
|
Section 1404.
|
Quorum; Action.
|
The
Persons entitled to vote a majority in principal amount of the Outstanding Securities of a Series shall constitute a quorum for a meeting or duly reconvened meeting of Holders of Securities of such Series; provided, however, that if any action is to
be taken at such meeting with respect to a consent or waiver which this Indenture expressly provides may be given by the Holders of at least
66-2/3%
in principal amount of the Outstanding Securities of a
Series, the Persons entitled to vote
66-2/3%
in principal amount of the Outstanding Securities of such Series shall constitute a quorum. In the absence of a quorum within 30 minutes after the time appointed
for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such Series, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to
the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1402(1)
, except that such notice need be given only once not less than
50
five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such Series which shall constitute a quorum.
Except as limited by the
proviso to
Section 902
, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in principal amount of
the Outstanding Securities of such Series; provided, however, that, except as limited by the proviso to
Section 902
, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other Act which
this Indenture expressly provides may be made, given or taken by the Holders of at least
66-2/3%
in principal amount of the Outstanding Securities of a Series may be adopted at a meeting or an adjourned
meeting duly convened and at which a quorum is present as aforesaid only by the affirmative vote of the Holders of at least
66-2/3%
in principal amount of the Outstanding Securities of that Series; and
provided, further, that, except as limited by the proviso to
Section 902
, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other Act that this Indenture expressly provides may be
made, given or taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of a Series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of such Series.
Any resolution passed or decision taken at any meeting of Holders of Securities of any Series duly held in accordance with this Section shall be binding on all the Holders of Securities of such Series,
whether or not such Holders were present or represented at the meeting.
|
|
Section 1405.
|
Determination of Voting Rights; Conduct and Adjournment of Meetings.
|
(1) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of such Series in regard to
proof of the holding of Securities of such Series 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 deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in
Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104
. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in
Section 104
or other proof.
(2) The Trustee shall, by an instrument in
writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in
Section 1402(2)
, in which case the Company or the Holders of Securities of the
Series 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 vote of the Persons entitled to vote a majority in principal amount
of the Outstanding Securities of such Series represented at the meeting.
(3) At any meeting, each Holder of a Security of
such Series or proxy shall be entitled to one vote for each $1,000 principal amount of Securities of such Series 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. If the Securities of such Series are issuable in minimum denominations of less than $1,000, then a Holder of such a Security in a principal amount of less
than $1,000 shall be entitled to a fraction of one vote that is equal to the fraction that the principal amount of such Security bears to $1,000. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such
Series or proxy.
(4) Any meeting of Holders of Securities of any Series duly called pursuant to
Section 1402
at
which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of such Series represented at the meeting; and the meeting may be held as so adjourned without
further notice.
51
|
|
Section 1406.
|
Counting Votes and Recording Action of Meetings.
|
The vote upon any resolution submitted to any meeting of Holders of Securities of any Series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such
Series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such Series 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, at least in triplicate, of the
proceedings of each meeting of Holders of Securities of any Series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in
Section 1402
and, if applicable,
Section 1404
. Each copy
shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the 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.
(Signature page follows)
52
This instrument may be executed in any number of counterparts, each of which so executed
shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written.
|
|
|
|
|
INDEPENDENT BANK GROUP, INC.
|
|
|
|
|
By:
|
|
/s/ David R. Brooks
|
|
Name:
|
|
David R. Brooks
|
|
Title:
|
|
Chairman and Chief Executive Officer
|
|
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION
, as Trustee
|
|
|
|
|
By:
|
|
/s/ Patrick Giordano
|
|
Name:
|
|
Patrick Giordano
|
|
Title:
|
|
Vice President
|
53
Exhibit 4.6
INDEPENDENT BANK GROUP, INC.,
Issuer
to
WELLS FARGO
BANK, NATIONAL ASSOCIATION,
Trustee
SUBORDINATED DEBT INDENTURE
Dated as of June 25, 2014
Subordinated Debt Securities
Reconciliation and tie between
Trust Indenture Act of 1939 (the “
Trust Indenture Act
”) and Indenture
|
|
|
|
|
Trust Indenture Act Section
|
|
Indenture
Section
|
|
§310(a)(1)
|
|
608
|
|
(a)(2)
|
|
608
|
|
(b)
|
|
609
|
|
§312(a)
|
|
701
|
|
(b)
|
|
702
|
|
(c)
|
|
702
|
|
§313(a)
|
|
703
|
|
(b)(2)
|
|
703
|
|
(c)
|
|
703
|
|
(d)
|
|
703
|
|
§314(a)
|
|
704
|
|
(c)(1)
|
|
102
|
|
(c)(2)
|
|
102
|
|
(e)
|
|
102
|
|
§315(b)
|
|
603
|
|
(e)
|
|
515
|
|
§316(a) (last sentence)
|
|
101
|
|
(a)(1)(A)
|
|
502, 512
|
|
(a)(1)(B)
|
|
513
|
|
(b)
|
|
508
|
|
§317(a)(1)
|
|
503
|
|
(a)(2)
|
|
504
|
|
(b)
|
|
1003
|
|
§318(a)
|
|
108
|
|
Note:
|
This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.
|
TABLE OF CONTENTS
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ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
|
|
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1
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|
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|
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|
|
Section 101.
|
|
Definitions.
|
|
|
1
|
|
|
|
|
|
|
Section 102.
|
|
Compliance Certificates and Opinions.
|
|
|
8
|
|
|
|
|
|
|
Section 103.
|
|
Form of Documents Delivered to Trustee.
|
|
|
8
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|
|
|
|
|
|
Section 104.
|
|
Acts of Holders.
|
|
|
9
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|
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|
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|
|
Section 105.
|
|
Notices, etc. to Trustee and Company.
|
|
|
10
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|
|
|
|
|
|
Section 106.
|
|
Notice to Holders of Securities; Waiver.
|
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|
10
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|
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|
|
Section 107.
|
|
Language of Notices.
|
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|
10
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|
|
|
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|
|
Section 108.
|
|
Conflict with Trust Indenture Act.
|
|
|
10
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|
|
|
|
|
|
Section 109.
|
|
Effect of Headings and Table of Contents.
|
|
|
10
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|
|
|
|
|
|
Section 110.
|
|
Successors and Assigns.
|
|
|
10
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|
|
|
|
|
|
Section 111.
|
|
Separability Clause.
|
|
|
11
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|
|
|
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|
|
Section 112.
|
|
Benefits of Indenture.
|
|
|
11
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|
|
|
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|
|
Section 113.
|
|
Governing Law.
|
|
|
11
|
|
|
|
|
|
|
Section 114.
|
|
Legal Holidays.
|
|
|
11
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|
|
|
|
|
|
Section 115.
|
|
Counterparts; Electronic Transmission.
|
|
|
11
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|
|
|
|
|
|
Section 116.
|
|
Immunity of Shareholders, Directors, Officers and Agents of the Company.
|
|
|
11
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|
|
|
|
|
|
Section 117.
|
|
Waiver of Jury Trial.
|
|
|
11
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|
|
|
|
|
|
Section 118.
|
|
Force Majeure.
|
|
|
12
|
|
|
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|
|
ARTICLE TWO SECURITIES FORMS
|
|
|
12
|
|
|
|
|
|
|
Section 201.
|
|
Forms Generally.
|
|
|
12
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|
|
|
|
|
|
Section 202.
|
|
Form of Trustee’s Certificate of Authentication.
|
|
|
12
|
|
|
|
|
|
|
Section 203.
|
|
Securities in Global Form.
|
|
|
13
|
|
|
|
|
|
ARTICLE THREE THE SECURITIES
|
|
|
13
|
|
|
|
|
|
|
Section 301.
|
|
Amount Unlimited; Issuable in Series.
|
|
|
13
|
|
|
|
|
|
|
Section 302.
|
|
Currency; Denominations.
|
|
|
17
|
|
|
|
|
|
|
Section 303.
|
|
Execution, Authentication, Delivery and Dating.
|
|
|
17
|
|
|
|
|
|
|
Section 304.
|
|
Temporary Securities.
|
|
|
18
|
|
|
|
|
|
|
Section 305.
|
|
Registration, Transfer and Exchange.
|
|
|
18
|
|
|
|
|
|
|
Section 306.
|
|
Mutilated, Destroyed, Lost and Stolen Securities.
|
|
|
20
|
|
|
|
|
|
|
Section 307.
|
|
Payment of Interest; Rights to Interest Preserved.
|
|
|
21
|
|
|
|
|
|
|
Section 308.
|
|
Persons Deemed Owners.
|
|
|
22
|
|
|
|
|
|
|
Section 309.
|
|
Cancellation.
|
|
|
22
|
|
|
|
|
|
|
Section 310.
|
|
Computation of Interest.
|
|
|
22
|
|
|
|
|
|
ARTICLE FOUR SATISFACTION AND DISCHARGE OF INDENTURE
|
|
|
22
|
|
|
|
|
|
|
Section 401.
|
|
Satisfaction and Discharge.
|
|
|
22
|
|
|
|
|
|
|
Section 402.
|
|
Defeasance and Covenant Defeasance.
|
|
|
23
|
|
|
|
|
|
|
Section 403.
|
|
Application of Trust Money.
|
|
|
26
|
|
|
|
|
|
|
Section 404.
|
|
Reinstatement.
|
|
|
26
|
|
|
|
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|
|
Section 405.
|
|
Effect on Subordination Provisions.
|
|
|
26
|
|
i
|
|
|
|
|
|
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|
|
ARTICLE FIVE REMEDIES
|
|
|
27
|
|
|
|
|
|
|
Section 501.
|
|
Events of Default.
|
|
|
27
|
|
|
|
|
|
|
Section 502.
|
|
Acceleration of Maturity; Rescission and Annulment.
|
|
|
28
|
|
|
|
|
|
|
Section 503.
|
|
Collection of Indebtedness and Suits for Enforcement by Trustee.
|
|
|
29
|
|
|
|
|
|
|
Section 504.
|
|
Trustee May File Proofs of Claim.
|
|
|
30
|
|
|
|
|
|
|
Section 505.
|
|
Trustee May Enforce Claims Without Possession of Securities.
|
|
|
30
|
|
|
|
|
|
|
Section 506.
|
|
Application of Money Collected.
|
|
|
30
|
|
|
|
|
|
|
Section 507.
|
|
Limitation on Suits.
|
|
|
31
|
|
|
|
|
|
|
Section 508.
|
|
Unconditional Right of Holders to Receive Principal, Premium and Interest.
|
|
|
31
|
|
|
|
|
|
|
Section 509.
|
|
Restoration of Rights and Remedies.
|
|
|
31
|
|
|
|
|
|
|
Section 510.
|
|
Rights and Remedies Cumulative.
|
|
|
31
|
|
|
|
|
|
|
Section 511.
|
|
Delay or Omission Not Waiver.
|
|
|
32
|
|
|
|
|
|
|
Section 512.
|
|
Control by Holders.
|
|
|
32
|
|
|
|
|
|
|
Section 513.
|
|
Waiver of Past Defaults.
|
|
|
32
|
|
|
|
|
|
|
Section 514.
|
|
Waiver of Usury, Stay or Extension Laws.
|
|
|
32
|
|
|
|
|
|
|
Section 515.
|
|
Undertaking for Costs.
|
|
|
33
|
|
|
|
|
|
ARTICLE SIX THE TRUSTEE
|
|
|
33
|
|
|
|
|
|
|
Section 601.
|
|
Duties of Trustee.
|
|
|
33
|
|
|
|
|
|
|
Section 602.
|
|
Certain Rights of Trustee.
|
|
|
33
|
|
|
|
|
|
|
Section 603.
|
|
Notice of Defaults.
|
|
|
35
|
|
|
|
|
|
|
Section 604.
|
|
Not Responsible for Recitals or Issuance of Securities.
|
|
|
35
|
|
|
|
|
|
|
Section 605.
|
|
May Hold Securities.
|
|
|
35
|
|
|
|
|
|
|
Section 606.
|
|
Money Held in Trust.
|
|
|
35
|
|
|
|
|
|
|
Section 607.
|
|
Compensation and Reimbursement.
|
|
|
35
|
|
|
|
|
|
|
Section 608.
|
|
Corporate Trustee Required; Eligibility.
|
|
|
36
|
|
|
|
|
|
|
Section 609.
|
|
Resignation and Removal; Appointment of Successor.
|
|
|
36
|
|
|
|
|
|
|
Section 610.
|
|
Acceptance of Appointment by Successor.
|
|
|
37
|
|
|
|
|
|
|
Section 611.
|
|
Merger, Conversion, Consolidation or Succession to Business.
|
|
|
38
|
|
|
|
|
|
|
Section 612.
|
|
Appointment of Authenticating Agent.
|
|
|
39
|
|
|
|
|
|
ARTICLE SEVEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
|
|
|
40
|
|
|
|
|
|
|
Section 701.
|
|
Company to Furnish Trustee Names and Addresses of Holders.
|
|
|
40
|
|
|
|
|
|
|
Section 702.
|
|
Preservation of Information; Communications to Holders.
|
|
|
40
|
|
|
|
|
|
|
Section 703.
|
|
Reports by Trustee.
|
|
|
40
|
|
|
|
|
|
|
Section 704.
|
|
Reports by Company.
|
|
|
41
|
|
|
|
|
|
ARTICLE EIGHT CONSOLIDATION, MERGER AND SALES
|
|
|
42
|
|
|
|
|
|
|
Section 801.
|
|
Company May Consolidate, Etc., Only on Certain Terms.
|
|
|
42
|
|
|
|
|
|
|
Section 802.
|
|
Successor Person Substituted for Company.
|
|
|
42
|
|
|
|
|
|
ARTICLE NINE SUPPLEMENTAL INDENTURES
|
|
|
43
|
|
|
|
|
|
|
Section 901.
|
|
Supplemental Indentures without Consent of Holders.
|
|
|
43
|
|
|
|
|
|
|
Section 902.
|
|
Supplemental Indentures with Consent of Holders.
|
|
|
44
|
|
ii
|
|
|
|
|
|
|
|
|
Section 903.
|
|
Execution of Supplemental Indentures.
|
|
|
45
|
|
|
|
|
|
|
Section 904.
|
|
Effect of Supplemental Indentures.
|
|
|
45
|
|
|
|
|
|
|
Section 905.
|
|
Reference in Securities to Supplemental Indentures.
|
|
|
45
|
|
|
|
|
|
|
Section 906.
|
|
Effect on Senior Indebtedness.
|
|
|
45
|
|
|
|
|
|
|
Section 907.
|
|
Conformity with Trust Indenture Act.
|
|
|
45
|
|
|
|
|
|
ARTICLE TEN COVENANTS
|
|
|
45
|
|
|
|
|
|
|
Section 1001.
|
|
Payment of Principal, Premium, Interest.
|
|
|
45
|
|
|
|
|
|
|
Section 1002.
|
|
Maintenance of Office or Agency.
|
|
|
46
|
|
|
|
|
|
|
Section 1003.
|
|
Money for Securities Payments to Be Held in Trust.
|
|
|
46
|
|
|
|
|
|
|
Section 1004.
|
|
Corporate Existence.
|
|
|
47
|
|
|
|
|
|
|
Section 1005.
|
|
Maintenance of Properties.
|
|
|
48
|
|
|
|
|
|
|
Section 1006.
|
|
Waiver of Certain Covenants.
|
|
|
48
|
|
|
|
|
|
|
Section 1007.
|
|
Company Statement as to Compliance.
|
|
|
48
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ARTICLE ELEVEN REDEMPTION OF SECURITIES
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48
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Section 1101.
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Applicability of Article.
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48
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Section 1102.
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Election to Redeem; Notice to Trustee.
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48
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Section 1103.
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Selection by Trustee of Securities to be Redeemed.
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49
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Section 1104.
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Notice of Redemption.
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49
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Section 1105.
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Deposit of Redemption Price.
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50
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Section 1106.
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Securities Payable on Redemption Date.
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50
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Section 1107.
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Securities Redeemed in Part.
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51
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ARTICLE TWELVE SINKING FUNDS
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51
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Section 1201.
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Applicability of Article.
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51
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Section 1202.
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Satisfaction of Sinking Fund Payments with Securities.
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51
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Section 1203.
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Redemption of Securities for Sinking Fund.
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52
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ARTICLE THIRTEEN
[RESERVED]
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52
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ARTICLE FOURTEEN MEETINGS OF HOLDERS OF SECURITIES
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52
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Section 1401.
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Purposes for Which Meetings May Be Called.
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52
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Section 1402.
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Call, Notice and Place of Meetings.
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52
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Section 1403.
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Persons Entitled to Vote at Meetings.
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53
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Section 1404.
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Quorum; Action.
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53
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Section 1405.
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Determination of Voting Rights; Conduct and Adjournment of Meetings.
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53
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Section 1406.
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Counting Votes and Recording Action of Meetings.
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54
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ARTICLE FIFTEEN SUBORDINATION OF SECURITIES
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54
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Section 1501.
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Agreement to Subordinate.
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54
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iii
SUBORDINATED DEBT INDENTURE, dated as of June , 2014 (the
“
Indenture
”), between Independent Bank Group, Inc., a corporation duly organized and existing under the laws of the State of Texas (hereinafter called the “
Company
”), having its principal executive office located at
1600 Redbud Blvd., Suite 400, McKinney, Texas 75069, and Wells Fargo Bank, National Association, a national banking association duly organized and existing under the laws of the United States (hereinafter called the “
Trustee
”).
RECITALS
The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its subordinated unsecured debt securities (hereinafter called the
“Securities”), unlimited as to principal amount, to bear such rates of interest, to mature at such time or times, to be issued in one or more Series, to have such relative rankings in priority of payment, and to have such other provisions
as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this Indenture. All
things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
This
Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder that are required to be part of this Indenture and, to the extent
applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders (as herein defined) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or the Securities of any Series as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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Section 101.
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Definitions
.
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Except as
otherwise expressly provided in or pursuant to this Indenture or unless the context otherwise requires, for all purposes of this Indenture:
(1) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular;
(2) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP;
(4) the words “herein,” “hereof,” “hereto” 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;
(5) the word “or” is always used inclusively (for example, the phrase “A or B” means “A or B or both,” not “either A or B but not both”);
(6) provisions apply to successive events and transactions;
(7) the term “merger” includes a statutory share exchange and the terms “merge” and “merged” have correlative meanings;
1
(8) the masculine gender includes the feminine and the neuter; and
(9) references to agreements and other instruments include subsequent amendments and supplements thereto.
Certain terms used principally in certain Articles hereof are defined in those Articles.
“
Act
,” when used with respect to any Holders, has the meaning specified in
Section 104
.
“
Affiliate
” means, with respect to any specified Person, 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.
“
Authenticating Agent
” means any Person authorized by the Trustee pursuant to
Section 612
to act on behalf
of the Trustee to authenticate Securities of one or more Series.
“
Authorized Newspaper
” means a newspaper,
in an official language of the place of publication or in the English language, customarily published on each day that is a Business Day in the place of publication, whether or not published on days that are not Business Days in the place of
publication, and of general circulation in each place in connection with which the term is used or in the financial community of each such place. Where successive publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same place meeting the foregoing requirements and in each case on any day that is a Business Day in the place of publication.
“
Authorized Officer
” means each of the Chairman of the Board, the Chief Executive Officer, the President, and the
Executive Vice President and Chief Financial Officer of the Company.
“
Board of Directors
” means the board of
directors of the Company or any committee of that board duly authorized to act generally or in any particular respect for the Company hereunder. The term “board of directors” means the board of directors of the Company and does not include
committees of the board of directors.
“
Board Resolution
” means one or more resolutions, 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, delivered to the Trustee.
“
Business Day
” means, unless otherwise specified with respect to the Securities of any Series pursuant to
Section 301
, any day other than a Saturday, Sunday or other day on which banking institutions in the City of Dallas, Texas, or The City of New York, New York, are authorized or obligated by law, regulation or executive order to close;
provided that such term shall mean, when used with respect to any payment of principal of, or premium or interest, if any, on, the Securities of any Series to be made at any Place of Payment for such Securities, unless otherwise specified pursuant
to
Section 301
with respect to such Securities, any day other than a Saturday, Sunday or other day on which banking institutions in such Place of Payment are authorized or obligated by law, regulation or executive order to close.
“
Commission
” means the Securities and Exchange Commission, as from time to time constituted, 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 Stock
” includes the Company common stock, par value $0.01 per share, and any other authorized stock of any class
of the Company that has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, termination or winding up of the Company and that is not subject to redemption by the Company.
2
“
Company
” means the Person named as the “Company” in the first
paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person and any other obligor upon the Securities.
“
Company Request
” and “
Company Order
” mean, respectively, a written request or order, as
the case may be, signed in the name of the Company by an Authorized Officer and by the Secretary of the Company, and delivered to the Trustee.
“
Corporate Trust Office
” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at
Dallas, Texas, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may
designate from time to time by notice to the Holders and the Company).
“
corporation
” includes corporations,
partnerships, associations, limited liability companies and other companies, statutory trusts and business trusts.
“
Currency
,” with respect to any payment, deposit or other transfer in respect of the principal of or any premium or
interest on any Security, means Dollars.
“
CUSIP number
” means the alphanumeric designation assigned to a
Security by Standard & Poor’s, CUSIP Service Bureau.
“
Dallas, Texas Banking Day
” means any day
except a Saturday, Sunday or a legal holiday in the City of Dallas, Texas, or a day on which banking institutions in the City of Dallas, Texas, are authorized or obligated by law, regulation or executive order to be closed.
“
Defaulted Interest
” has the meaning specified in
Section 307
.
“
Depositary
” means, with respect to any Security issuable or issued in the form of one or more global Securities, the
Person designated as depositary by the Company in or pursuant to this Indenture, and, unless otherwise provided with respect to any Security, any successor to such Person. If at any time there is more than one such Person, “Depositary”
shall mean, with respect to any Securities, the depositary that has been appointed with respect to such Securities.
“
Dollars
” or “
$
” means a dollar or other equivalent unit of legal tender for payment of public or
private debts in the United States of America.
“
Event of Default
” has the meaning specified in
Section 501
.
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended, or any
successor statute thereto, together with all rules and regulations promulgated thereunder, in each case as amended from time to time.
“
GAAP
” and “generally accepted accounting principles” mean, unless otherwise specified with respect to any Series of Securities pursuant to
Section 301
, such
accounting principles as are generally accepted in the United States of America as of the date or time of any computation required hereunder.
“
Government Obligations
” means securities which are (i) direct obligations of the United States of America in each case where the payment or payments thereunder are supported by the
full faith and credit of the United States of America, or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or such other government or governments, in each case
where the timely payment or payments thereunder are unconditionally guaranteed as a full faith and credit obligation by the United States of America, and which, in the case of (i) or (ii), are denominated in, and the principal of and interest
on such securities are payable in, Dollars and are not callable or redeemable at the option of the issuer or issuers thereof.
3
“
Holder
,” in the case of any Security, means the Person in whose name such
Security is registered in the Security Register.
“
Indenture
” means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and, with respect to any Security, by the terms and provisions of such Security
established pursuant to
Section 301
(as such terms and provisions may be amended pursuant to the applicable provisions hereof), provided, however, that, if at any time more than one Person is acting as Trustee under this instrument,
“Indenture” shall mean, with respect to any one or more Series of Securities for which such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of those particular Series of Securities for which such Person is Trustee established pursuant to
Section 301
, exclusive, however,
of any provisions or terms which relate solely to other Series of Securities for which such Person is not Trustee, regardless of when such terms or provisions were adopted.
“
Indexed Security
” means a Security the terms of which provide that the principal amount thereof payable at Stated Maturity may be more or less than the principal face amount thereof at
original issuance.
“
interest
,” with respect to any Original Issue Discount Security which by its terms bears
interest only after Maturity, means interest payable after Maturity.
“
Interest Payment Date
,” with respect
to any Security, means the Stated Maturity of an installment of interest on such Security.
“
Maturity
,” with
respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as provided in or pursuant to this Indenture or such Security, whether at the Stated Maturity or by an
acceleration of the maturity of such Security in accordance with the terms of such Security, upon redemption at the option of the Company, upon repurchase or repayment at the option of the Holder or otherwise, and includes a Redemption Date for such
Security and a date fixed for the repurchase or repayment of such Security at the option of the Holder.
“
Office
” or “
Agency
,” with respect to any Securities, means an office or agency of the Company
maintained or designated in a Place of Payment for such Securities pursuant to
Section 1002
or any other office or agency of the Company maintained or designated for such Securities pursuant to
Section 1002
or, to the extent
designated or required by
Section 1002
in lieu of such office or agency, the Corporate Trust Office of the Trustee.
“
Officer
” means, with respect to any Person, the chairman of the board, vice chairman of the board, the chief executive
officer, the president, the chief operating officer, the chief financial officer, the treasurer, any assistant treasurer, the controller, the secretary or any Vice President of such Person.
“
Officers’ Certificate
” means a certificate signed on behalf of the Company by two Officers of the Company, one of
whom must be an Authorized Officer (which, in the case of a certificate provided by the Company to the Trustee pursuant to
Section 704(1)(b)
as required by Section 314(a)(4) of the Trust Indenture Act, shall be the principal
executive officer or the principal financial officer of the Company), that complies with the requirements of Section 314(e) of the Trust Indenture Act and is delivered to the Trustee.
“
Opinion of Counsel
” means a written opinion of counsel, who is reasonably acceptable to the Trustee, that, if required
by the Trust Indenture Act, complies with the requirements of Section 314(e) of the Trust Indenture Act.
“
Original Issue Discount Security
” means a Security issued pursuant to this Indenture that provides for an amount less
than the principal face amount thereof to be due and payable upon declaration of acceleration pursuant to
Section 502
.
“
Outstanding
,” when used with respect to any Securities, means, as of the date of determination, all such Securities theretofore authenticated and delivered under this Indenture, except:
(a) any such Security theretofore cancelled by the Trustee or the Security Registrar or delivered to the
Trustee or the Security Registrar for cancellation;
4
(b) any such Security for whose payment at the Maturity thereof money in the
necessary amount (or, to the extent that such Security is payable at such Maturity in shares of Common Stock or other securities or property, Common Stock or such other securities or property in the necessary amount, together with, if applicable,
cash in lieu of fractional shares or securities) has been theretofore deposited pursuant hereto (other than pursuant to
Section 402
) with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities, provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(c) any such Security with respect to which the Company
has effected defeasance or covenant defeasance pursuant to
Section 402
, except to the extent provided in
Section 402
;
(d) any such Security that has been paid pursuant to
Section 306
or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture,
unless there shall have been presented to the Trustee proof satisfactory to the Trustee that such Security is held by a bona fide purchaser in whose hands such Security is a valid obligation of the Company; and
(e) any such Security converted or exchanged as contemplated by this Indenture into Common Stock or other securities or
property, if the terms of such Security provide for such conversion or exchange pursuant to
Section 301
;
provided, however, that
in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder or are present at a meeting of Holders of Securities for
quorum purposes, (i) the principal amount of an Original Issue Discount Security that may be counted in making such determination and that shall be deemed to be Outstanding for such purposes shall be equal to the amount of the principal thereof
that pursuant to the terms of such Original Issue Discount Security would be declared (or shall have been declared to be) due and payable upon a declaration of acceleration thereof pursuant to
Section 502
at the time of such
determination, and (ii) the principal amount of any Indexed Security that may be counted in making such determination and that shall be deemed Outstanding for such purpose shall be equal to the principal face amount of such Indexed Security at
original issuance, unless otherwise provided in or pursuant to this Indenture, and (iii) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in making any such determination or relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned that shall have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee
(A) the pledgee’s right so to act with respect to such Securities and (B) that the pledgee is not the Company or any other obligor upon the Securities or an Affiliate (other than a Trust) of the Company or such other obligor.
“
Paying Agent
” means any Person authorized by the Company, including the Company, to pay the principal of,
or any premium or interest on, any Security on behalf of the Company.
“
Person
” and “
person
”
mean any individual, corporation, partnership, association, limited liability company, other company, statutory trust, business trust, joint venture, joint-stock company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
“
Place of Payment
,” with respect to any Security, means the place or places where the
principal of, or any premium or interest on, such Security are payable as provided in or pursuant to this Indenture or such Security.
“
Predecessor Security
” of any particular Security means every previous Security evidencing all or a portion of the same indebtedness as that evidenced by such particular Security; and,
for the purposes of this definition, any
5
Security authenticated and delivered under
Section 306
in exchange for or in lieu of a lost, destroyed, mutilated or stolen Security shall be deemed to evidence the same indebtedness
as the lost, destroyed, mutilated or stolen Security.
“
Redemption Date
,” with respect to any Security or
portion thereof to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture or such Security.
“
Redemption Price
,” with respect to any Security or portion thereof to be redeemed, means the price at which it is to be
redeemed as determined by or pursuant to this Indenture or such Security.
“
Regular Record Date
” for the
interest payable on any Security on any Interest Payment Date therefor means the date, if any, specified in or pursuant to this Indenture or such Security as the record date for the payment of such interest.
“
Responsible Officer
” means, when used with respect to the Trustee, any officer within the corporate trust department of
the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the
time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of
this Indenture.
“
Securities Act
” means the Securities Act of 1933, as amended, or any successor statute
thereto, together with all rules and regulations promulgated thereunder, in each case as amended from time to time.
“
Security
” or “
Securities
” means any note or notes, bond or bonds, debenture or debentures, or any
other evidence or evidences of indebtedness, as the case may be, authenticated and delivered under this Indenture; provided, however, that, if at any time there is more than one Person acting as Trustee under this Indenture, “Securities,”
with respect to any such Person, shall mean Securities authenticated and delivered under this Indenture, exclusive, however, of Securities of any Series as to which such Person is not Trustee.
“
Security Register
” and “
Security Registrar
” have the respective meanings specified in
Section 305
.
“
Senior Indebtedness
” means the principal of, and premium, if any, and interest,
including interest accruing after the commencement of any bankruptcy proceeding relating to the Company, on, or substantially similar payments the Company makes in respect of the following categories of debt, whether that debt was outstanding on the
date of execution of this Indenture or thereafter incurred, created or assumed:
(1) the indebtedness in the amount of up to
$35,000,000 that the Company may incur pursuant to its revolving credit facility established pursuant to the Credit Agreement, dated as of June 4, 2014, by and between the Company and U.S. Bank, National Association, and any renewal or
extension thereof or any new credit facility replacing such revolving credit facility;
(2) other indebtedness of the Company
evidenced by notes, debentures, or bonds or other securities issued under the provisions of any indenture, fiscal agency agreement, debenture or note purchase agreement or other agreement, including any senior debt securities that may be offered;
(3) indebtedness of the Company for money borrowed or represented by purchase-money obligations, as defined below;
(4) the Company’s obligations as lessee under leases of property whether made as part of a sale and leaseback
transaction to which it is a party or otherwise;
(5) indebtedness, obligations and liabilities of others in respect of which
the Company is liable contingently or otherwise to pay or advance money or property or as guarantor, endorser or otherwise or which it has agreed to purchase or otherwise acquire and indebtedness of partnerships and joint ventures that is included
in the Company’s consolidated financial statements;
6
(6) reimbursement and other obligations relating to letters of credit, bankers’
acceptances and similar obligations;
(7) obligations under various hedging arrangements and agreements, including interest
rate and currency hedging agreements and swap and non-swap forward agreements;
(8) all of the Company’s obligations
issued or assumed as the deferred purchase price of property or services, but excluding trade accounts payable and accrued liabilities arising in the ordinary course of business; and
(9) deferrals, renewals or extensions of any of the indebtedness or obligations described in clauses (1) through (8) above.
However, clauses (1) through (9) above exclude:
|
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(x)
|
any indebtedness, obligation or liability referred to in clauses (1) through (9) above as to which, in the instrument creating or evidencing that
indebtedness, obligation or liability, it is expressly provided that the indebtedness, obligation or liability is not senior in right of payment, is junior in right of payment to, or ranks equally in right of payment with, other specified types of
indebtedness, obligations and liabilities of the Company, which other specified types of indebtedness, obligations and liabilities of the Company include the Securities;
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(y)
|
any indebtedness, obligation or liability that is subordinated to indebtedness, obligations or liabilities of the Company to substantially the same extent as or to a
greater extent than the Securities are subordinated; and
|
|
|
(z)
|
the Securities and the Company’s outstanding junior subordinated debentures and, unless expressly provided in the terms thereof, any indebtedness of the Company to
its Subsidiaries.
|
As used above, the term “purchase money obligations” means indebtedness,
obligations evidenced by a note, debenture, bond or other instrument, whether or not secured by a lien or other security interest, issued to evidence the obligation to pay or a guarantee of the payment of, and any deferred obligation for the payment
of, the purchase price of property but excluding indebtedness or obligations for which recourse is limited to the property purchased, issued or assumed as all or a part of the consideration for the acquisition of property or services, whether by
purchase, merger, consolidation or otherwise, but does not include any trade accounts payable.
“
Series
”
means a series of Securities designated or established pursuant to
Section 301
, all of which Securities in such Series shall have like terms and conditions (other than the principal amount thereof).
“
Significant Subsidiary
” means any Subsidiary of the Company that is a “significant subsidiary” as defined in
Rule 1-02 of Regulation S-X promulgated by the Commission (as such rule is in effect on the date of this Indenture).
“
Special Record Date
” for the payment of any Defaulted Interest on any Security means a date fixed pursuant to
Section 307
.
“
Stated Maturity
,” with respect to any Security or any installment of principal
thereof or interest thereon, means the date established by or pursuant to this Indenture or such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
“
Subordination Provisions
,” when used with respect to the Securities of any Series, shall have the meaning established
pursuant to
Section 301(20)
with respect to the Securities of such Series.
“
Subsidiary
” means a
corporation, a partnership, business or statutory trust or a limited liability company, a majority of the outstanding voting equity securities or a majority of the voting membership or partnership interests, as the case may be, of which is owned or
controlled, directly or indirectly, by the Company or by one or more other Subsidiaries of the Company. For the purposes of this definition, “voting equity securities” means securities having voting power for the election of directors,
managers, managing partners or trustees, as the case may be, whether at all times or only so long as no senior class of stock has voting power by reason of any contingency.
7
“
Trust Indenture Act
” means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision thereof shall mean such Act or provision, as the case may be, as amended or replaced from time to time or as supplemented from time to time by rules or regulations adopted
by the Commission under or in furtherance of the purposes of such Act or provision, as the case may be.
“
Trustee
” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor
Trustee shall have become such with respect to one or more Series of Securities pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean each Person who is then a Trustee hereunder; provided, however,
that if at any time there is more than one such Person, “Trustee” shall mean each such Person and as used with respect to the Securities of any Series shall mean the Trustee with respect to the Securities of such Series.
“
United States
,” means the United States of America (including the states thereof and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction; and the term “United States of America” means the United States of America.
“
United States Alien
,” except as otherwise provided in or pursuant to this Indenture or any Security, means any Person who, for United States federal income tax purposes, is a foreign
corporation, a nonresident alien individual, a nonresident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States federal income tax purposes, a foreign corporation, a
nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust.
“
Vice
President
,” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “Vice President.”
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Section 102.
|
Compliance Certificates and Opinions.
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Except as otherwise expressly provided in or pursuant to this Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, 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, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents or any of them is specifically required by any provision of this
Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
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Section 103.
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Form of Documents Delivered to Trustee.
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In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless such officer knows, or in the exercise of reasonable care should know, that the opinion with respect to the matters upon which his certificate or
opinion is based is erroneous. Any such Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company, a governmental official or officers or
any other Person or Persons, stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate, opinion or
representations with respect to such matters are erroneous.
8
Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture or any Security, they may, but need not, be consolidated and form one instrument.
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Section 104.
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Acts of Holders.
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(1) Any
request, demand, authorization, direction, notice, consent, waiver or other action provided by or pursuant to this Indenture to be made, given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing or a written record of voting at a meeting of the Holders. Except as herein otherwise expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the “Act” of the Holders signing such instrument or instruments or so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee and the Company and any agent of the Trustee or the Company, if made in the manner
provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in
Section 1406
.
Without limiting the generality of this
Section 104
, unless otherwise provided in or pursuant to this Indenture, a Holder, including a Depositary that is a Holder of a global Security, may
make, give or take, by a proxy or proxies, duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other Act provided in or pursuant to this Indenture or the Securities to be made, given or taken by
Holders, and a Depositary that is a Holder of a global Security may provide its proxy or proxies to the beneficial owners of interests in any such global Security through such Depositary’s standing instructions and customary practices.
(2) The fact and date of the execution by any Person of any such instrument or writing may be proved in any reasonable manner
that the Trustee deems sufficient and in accordance with such reasonable rules as the Trustee may determine; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section.
(3) The ownership, principal amount and serial numbers of Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, shall be proved by the Security Register.
(4) If the Company shall solicit from the
Holders of any Securities any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may at its option (but is not obligated to), by Board Resolution, fix in advance a record date for the determination of
Holders of Securities entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of Securities of record at the close of business on such record date shall be deemed to be Holders for the purpose of determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of such record date; provided that no
such authorization, agreement or consent by the Holders of Securities 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.
(5) Any request, demand, authorization, direction, notice, consent, waiver or other Act by the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent or the Company in reliance thereon, whether or not notation of such Act is made upon such Security.
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Section 105.
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Notices, etc. to Trustee and Company.
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Any request, demand, authorization, direction, notice, consent, waiver or other Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee by any Holder or the Company shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to the attention of its Treasurer at the address of its principal office
specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.
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Section 106.
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Notice to Holders of Securities; Waiver.
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Except as otherwise expressly provided in or pursuant to this Indenture, where this Indenture provides for notice to Holders of Securities of any event, such notice shall be sufficiently given to Holders
of Securities if in writing and mailed, first-class postage prepaid, to each Holder of a Security affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice.
In any case where notice to Holders of Securities is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Security shall affect the sufficiency of such notice with respect to other Holders of Securities. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided. In the case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders of Securities shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
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Section 107.
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Language of Notices.
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Any
request, demand, authorization, direction, notice, consent or waiver or other Act required or permitted under this Indenture shall be in the English language, except that, if the Company so elects, any published notice may be in an official language
of the country of publication.
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Section 108.
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Conflict with Trust Indenture Act.
|
If any provision hereof limits, qualifies or conflicts with any duties under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c)
thereof, such required provision
shall control.
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Section 109.
|
Effect of Headings and Table of Contents.
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The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
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Section 110.
|
Successors and Assigns.
|
All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
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Section 111.
|
Separability Clause.
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In
case any provision in this Indenture or any Security shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not, to the fullest extent permitted by law, in any way be affected or
impaired thereby.
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Section 112.
|
Benefits of Indenture.
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Nothing in this Indenture or any Security, express or implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent and their respective successors hereunder and the Holders of Securities, and the holders of Senior Indebtedness with respect to such Series, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
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Section 113.
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Governing Law
.
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This
Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of Texas applicable to agreements made or instruments entered into and, in each case, performed in said State.
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Section 114.
|
Legal Holidays.
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Unless
otherwise specified in or pursuant to this Indenture or any Securities, in any case where any Interest Payment Date, Stated Maturity or Maturity of, or any other day on which a payment is due with respect to, any Security shall be a day that is not
a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or any Security other than a provision in any Security or in the Board Resolution, Officers’ Certificate or supplemental indenture establishing
the terms of any Security that specifically states that such provision shall apply in lieu hereof) payment need not be made at such Place of Payment on such date, but such payment may be made on the next succeeding day that is a Business Day at such
Place of Payment with the same force and effect as if made on the Interest Payment Date, at the Stated Maturity or Maturity or on any such other payment date, as the case may be, and no interest shall accrue on the amount payable on such date or at
such time for the period from and after such Interest Payment Date, Stated Maturity, Maturity or other payment date, as the case may be, to the next succeeding Business Day.
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Section 115.
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Counterparts; Electronic Transmission.
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This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Any facsimile or electronically transmitted
copies hereof or signature hereon shall, for all purposes, be deemed originals.
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Section 116.
|
Immunity of Shareholders, Directors, Officers and Agents of the Company.
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No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had against any past, present or
future shareholder, employee, officer or director, as such, of the Company or of any predecessor or successor, either directly or through the Company or any predecessor or successor, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the Holders and as part of the consideration for the issue of the
Securities.
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Section 117.
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Waiver of Jury Trial.
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EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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Section 118.
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Force Majeure.
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In no
event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it
being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
ARTICLE TWO
SECURITIES FORMS
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Section 201.
|
Forms Generally.
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Each
Security and temporary or permanent global Security issued pursuant to this Indenture shall be in the form established by or pursuant to a Board Resolution and set forth in an Officers’ Certificate, or established in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by or pursuant to this Indenture or any indenture supplemental hereto and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officer of the Company executing such Security as evidenced by the execution of such Security.
The Securities shall be issuable in registered form without coupons.
Definitive Securities may be printed, lithographed or engraved or produced by any combination of these methods on a steel engraved border
or steel engraved borders or may be produced in any other manner, all as determined by the officer of the Company executing such Securities, as evidenced by the execution of such Securities.
In the event Securities of any Series are intended to qualify as Tier 2 capital (as that term is contemplated in 12 Code of Federal
Regulations §250.166 or any successor rule or regulation thereto) of the Company, the definitive Securities representing such Securities or such Securities in global form shall bear a legend to read substantially as follows:
This Security and the obligations of the Company (as defined herein) evidenced hereby (1) are not deposits with or held by the
Company and are not insured by any federal agency, including, without limitation, the Federal Deposit Insurance Corporation, and (2) are subordinate in right of payment to the Senior Indebtedness (as defined in the Subordinated Debt Indenture
identified herein).
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Section 202.
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Form of Trustee’s Certificate of Authentication.
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Subject to
Section 612
, the Trustee’s certificate of authentication shall be in substantially the following form:
This is one of the Securities of the Series designated therein referred to in the within-mentioned Indenture.
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as Trustee
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By:
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Authorized Signatory
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Section 203.
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Securities in Global Form.
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Unless otherwise provided in or pursuant to this Indenture or any Securities, the Securities shall not be issuable in global form. If
Securities of a Series shall be issuable in temporary or permanent global form, any such Security may provide that it or any number of such Securities shall represent the aggregate amount of all Outstanding Securities of such Series (or such lesser
amount as is permitted by the terms thereof) from time to time set forth in such Securities in global form endorsed thereon or reflected on the books and records of the Trustee and may also provide that the aggregate amount of Outstanding Securities
represented thereby may from time to time be increased or reduced to reflect exchanges. Any endorsement of any Security in global form to reflect the amount, or any increase or decrease in the amount, or changes in the rights of Holders, of
Outstanding Securities represented thereby shall be made in such manner and by such Person or Persons as shall be specified therein or pursuant to
Section 301
with respect to such Security or in the Company Order to be delivered pursuant
to
Section 303
or
Section 304
with respect thereto. Subject to the provisions of
Section 303
and, if applicable,
Section 304
, the Trustee shall deliver and redeliver any Security in global form in the
manner and upon instructions given by the Person or Persons specified therein or pursuant to
Section 301
with respect to such Security or in the applicable Company Order. If a Company Order pursuant to
Section 303
or
Section 304
has been, or simultaneously is, delivered, any instructions by the Company with respect to a Security in global form shall be in writing but need not be accompanied by or contained in an Officers’ Certificate and need
not be accompanied by an Opinion of Counsel. Notwithstanding the foregoing provisions of this paragraph, in the event a global Security is exchangeable for definitive Securities as provided in
Section 305
, then, unless otherwise provided
in or pursuant to this Indenture with respect to the Securities of such Series, the Trustee shall deliver and redeliver such global Security to the extent necessary to effect such exchanges, shall endorse such global Security to reflect any decrease
in the principal amount thereto resulting from such exchanges and shall take such other actions, all as contemplated by
Section 305
.
Notwithstanding the provisions of
Section 307
, unless otherwise specified in or pursuant to this Indenture or any Securities, payment of principal of, and any premium and interest on, any
Security in temporary or permanent global form shall be made to the Person or Persons specified therein.
Notwithstanding the
provisions of
Section 308
and except as provided in the preceding paragraph, the Company, the Trustee and any agent of the Company or the Trustee shall treat as the Holder of such principal amount of Outstanding Securities represented by
a global Security, the Holder of such global Security in registered form.
ARTICLE THREE
THE SECURITIES
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Section 301.
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Amount Unlimited; Issuable in Series.
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The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Company may issue up to the aggregate principal amount of Securities of a Series
from time to time authorized by or pursuant to one or more Board Resolutions. The Securities shall be subordinated in right of payment to Senior Indebtedness as provided in
Article Fifteen
.
The Securities may be issued in one or more Series. All Securities of each Series issued under this Indenture shall in all respects be
equally and ratably entitled to the benefits hereof with respect to that Series without preference, priority or distinction on account of the actual time or times of the authentication and delivery or Maturity of the Securities of such Series.
Unless expressly provided otherwise with respect to a Series, not all Securities of a Series need be issued at the same time, and, unless otherwise provided in the Securities of that Series or in this Indenture, a Series may be reopened and the
aggregate principal amount of the Securities of a Series may be increased and additional Securities of that Series may be issued up to a maximum aggregate principal amount authorized for that Series, as that maximum aggregate principal amount may be
increased from time to time. All Securities of a Series shall rank equally among themselves and with the other existing and future indebtedness of the Company that is subordinated in right of payment to the Senior Indebtedness to the same extent as
the Securities of that Series.
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The Company may from time to time establish one or more Series pursuant to this Indenture. A
Series shall be established by (1) the execution and delivery of a Supplemental Indenture or (2) the adoption of a Board Resolution by the Board of Directors establishing that Series. The specific terms and conditions of the Securities of
any Series established shall be determined and set either (1) by the Supplemental Indenture that establishes the Series, (2) if the Series is established by a Supplemental Indenture, to the extent that those specific terms and conditions
are not determined and set by that Supplemental Indenture, by the adoption of a Board Resolution or Board Resolutions by the Board of Directors and, to the extent that those specific terms and conditions are not determined and set by the
Supplemental Indenture or by the adoption of a Board Resolution or Board Resolutions by the Board of Directors or by a combination of those means of determining and setting the specific terms and conditions of the Securities of that Series, by the
action of one or more Authorized Officers pursuant to authority to determine and set the specific terms and conditions of the Securities of that Series specifically delegated by the Board of Directors to that Authorized Officer or those Authorized
Officers or (3) if the Series is established by action of the Board of Directors, to the extent that those specific terms and conditions are not set by the adoption of a Board Resolution or Board Resolutions by the Board of Directors, by the
action of one or more Authorized Officers pursuant to authority to determine and set the specific terms and conditions of the Securities of that Series specifically delegated by the Board of Directors to that Authorized Officer or those Authorized
Officers. If the specific terms and specific conditions of the Securities of a Series are determined and set by action of the Board of Directors, that action shall be evidenced by a Board Resolution. If the specific terms and conditions of the
Securities of a Series established by action of the Board of Directors are determined and set by an Authorized Officer or Authorized Officers pursuant to authority delegated to them by the Board of Directors, that action shall be evidenced by an
Officers’ Certificate executed by the Authorized Officer or Authorized Officers determining and setting those terms and conditions, which certificate shall also be attested to by the Secretary or an Assistant Secretary of the Company. If the
specific terms and conditions of the Securities of a Series established by action of the Board of Directors are determined and set by an Authorized Officer or Authorized Officers pursuant to authority delegated to them by the Board of Directors and
an Officers’ Certificate has been delivered in connection with the establishment of the terms and conditions of the Securities of a Series and the issuance of the Securities of that Series, an additional Officers’ Certificate shall not be
required to be delivered in connection with any subsequent issuance of additional Securities of that Series.
Upon a Series
being established and the specific terms and conditions of the Securities of that Series being determined and set otherwise than through a Supplemental Indenture, the Company shall cause to be delivered to the Trustee an Officers’ Certificate
certifying that the Series has been established and the specific terms and conditions of the Securities of the Series have been determined and set and attaching to that Officers’ Certificate (1) the Board Resolution establishing the
Series, (2) the Board Resolution or Board Resolutions determining and setting the specific terms and conditions of the Securities of that Series or providing for the delegation of authority to one or more Authorized Officers to determine and
set the specific terms and conditions of the Securities of that Series and (3) if an Authorized Officer or Authorized Officers has determined and set the specific terms and conditions of the Securities of that Series, attaching the Certificate
evidencing the action of that Authorized Officer or those Authorized Officers. The Officers’ Certificate that is required to be delivered to the Trustee in accordance with the immediately preceding sentence, may be provided before or at the
time of the consummation of the first issuance of Securities of the Series to which the Officers’ Certificate relates.
Each Board Resolution of the Company determining and setting the specific terms and conditions of the Securities of a Series, each
Officers’ Certificate evidencing the specific terms and conditions of the Securities of a Series, and each Supplemental Indenture setting forth the terms and conditions of the Securities of a Series, shall set forth the following information as
to the terms and conditions of that Series:
(1) the title of the Securities of such Series;
(2) the aggregate principal amount of the Securities of such Series to be initially issued and sold by the Company and any limit upon the
aggregate principal amount of Securities of such Series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other
Securities of such Series pursuant to
Section 304
,
Section 305
,
Section 306
,
Section 905
or
Section 1107
or upon surrender in part of any Security for conversion or exchange into Common
Stock or other securities or property pursuant to its terms), and if from time to time the Company may issue additional Securities of such Series or establish additional terms of the Securities of such Series;
14
(3) if any of such Securities of such Series are to be issuable in global form, when any of
such Securities are to be issuable in global form and (i) whether such Securities are to be issued in temporary or permanent global form or both, (ii) the conditions upon which Securities in definitive form will be issued to beneficial
owners of Securities of Series; (iii) whether beneficial owners of interests in any such global Security may exchange such interests for Securities of the same Series and of like tenor and of any authorized form and denomination, and the
circumstances under which any such exchanges may occur, if other than in the manner specified in
Section 305
, (iv) the name of the Depositary with respect to any such global Security and (v) if applicable and in addition to the
Persons specified in
Section 305
, the Person or Persons who shall be entitled to make any endorsements on any such global Security and to give the instructions and take the other actions with respect to such global Security contemplated
by the first paragraph of
Section 203
;
(4) the date or dates, or the method or methods, if any, by which such
date or dates shall be determined, on which the principal and premium, if any, of such Securities is payable;
(5) the rate or
rates at which such Securities shall bear interest, if any, or the method or methods, if any, by which such rate or rates are to be determined, the date or dates, if any, from which such interest shall accrue or the method or methods, if any, by
which such date or dates are to be determined, the Interest Payment Dates, if any, on which such interest shall be payable and the Regular Record Date, if any, for the interest payable on such Securities on any Interest Payment Date, the notice, if
any, to Holders regarding the determination of interest on a floating rate Security and the manner of giving such notice, and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months;
(6) if in addition to or other than Dallas, Texas, the place or places where the principal of, any premium and interest on, such
Securities shall be payable, any of such Securities may be surrendered for registration of transfer or exchange, any of such Securities may be surrendered for conversion or exchange, and notices or demands to or upon the Company in respect of such
Securities and this Indenture may be served;
(7) whether any of the Securities are subject to prepayment and, if so, any
premium payable in connection with any such prepayment;
(8) whether any of such Securities are to be redeemable at the option
of the Company and, if so, the date or dates on which, the period or periods within which, the price or prices at which and the other terms and conditions upon which such Securities may be redeemed, in whole or in part, at the option of the Company;
(9) if the Company is obligated to redeem or purchase any of such Securities pursuant to any sinking fund or analogous
provision or at the option of any Holder thereof and, if so, the date or dates on which, the period or periods within which, the price or prices at which and the other terms and conditions upon which such Securities shall be redeemed or purchased,
in whole or in part, pursuant to such obligation, and any provisions for the remarketing of such Securities so redeemed or purchased;
(10) the denominations in which any of such Securities shall be issuable if other than denominations of $1,000 and any integral multiple thereof;
(11) whether the Securities of the Series will be convertible into and/or exchangeable for Common Stock or other securities or property,
and if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, and any deletions from or modifications or additions to this Indenture to permit or to facilitate the issuance of such convertible or exchangeable
Securities or the administration thereof;
(12) if other than the principal amount thereof, the portion of the principal
amount of any of such Securities that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 502
or the method by which such portion is to be determined;
(13) if the amount of payments of principal of, or any premium or interest on, such Securities may be determined with reference to an
index, formula or other method or methods (which index, formula or method or methods may be based, without limitation, on one or more commodities, equity indices or other indices), and, if so, the terms and conditions upon which and the manner in
which such amounts shall be determined and paid or payable;
15
(14) any affirmative or negative covenants to which the Company shall be subject or
obligated to perform so long as any Security of such Series is Outstanding;
(15) any deletions from, modifications of, or
additions to, the Events of Default or covenants of the Company with respect to any of such Securities (whether or not such Events of Default or covenants are consistent with the Events of Default or covenants set forth herein), and if
Section 1006
shall be applicable with respect to any such additional covenants;
(16) if any one or more of
Section 401
relating to satisfaction and discharge,
Section 402(2)
relating to defeasance or
Section 402(3)
relating to covenant defeasance shall not be applicable to the Securities of such Series, and any
covenants in addition to or other than those specified in
Section 402(3)
relating to the Securities of such Series that shall be subject to covenant defeasance, and, if the Holders of such Securities have the right to convert or exchange
such Securities into Common Stock or other securities or property, if the right to effect such conversion or exchange will be subject to satisfaction and discharge pursuant to
Section 401
or to defeasance or covenant defeasance pursuant
to
Section 402
, and any deletions from, or modifications or additions to, the provisions of
Article Four
(including any modification which would permit satisfaction and discharge, defeasance or covenant defeasance to be
effected with respect to less than all of the outstanding Securities of such Series) in respect of the Securities of such Series;
(17) if any of such Securities are issuable in global form and are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions;
(18) if not the Trustee, the identity of each Security Registrar, Paying Agent or Authenticating Agent with respect to such Securities;
(19) the Person to whom any interest on any Security of such Series shall be payable, if other than the Person in whose name the Security
(or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, and the extent to which, or the manner in which, any interest payable on a temporary global Security will be paid if other
than in the manner provided in this Indenture;
(20) the terms pursuant to which the Securities of such Series will be made
subordinate in right of payment to Senior Indebtedness, the definition of such Senior Indebtedness with respect to such Series and any changes in
Article Fifteen
with respect to such Series; and a Board Resolution, Officers’
Certificate or supplemental indenture, as the case may be, establishing the terms of such Series shall expressly state which articles, sections or other provisions thereof constitute the “Subordination Provisions” with respect to the
Securities of such Series; and
(21) any other terms of such Securities and any deletions from or modifications or additions
to this Indenture in respect of such Securities.
The terms of the Securities of any Series may provide, without limitation,
that the Securities shall be authenticated and delivered by the Trustee on original issue from time to time upon telephonic or written order of persons designated in the Board Resolution, Officers’ Certificate or supplemental indenture, as the
case may be, pertaining to such Series of Securities (telephonic instructions to be promptly confirmed in writing by such person) and that such persons are authorized to determine, consistent with such Board Resolution, Officers’ Certificate or
supplemental indenture, such terms and conditions of the Securities of such Series as are specified in such Board Resolution, Officers’ Certificate or supplemental indenture. All Securities of any one Series need not be issued at the same time
and, if so provided by the Company as contemplated by this
Section 301
, a Series may be reopened from time to time without the consent of any Holders for issuances of additional Securities of such Series or to establish additional terms
of such Series of Securities.
16
If any of the terms of the Securities of any Series shall be established by action taken by
or pursuant to a Board Resolution, the Board Resolution shall be delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of such Series.
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Section 302.
|
Currency; Denominations.
|
The principal of, and any premium and interest on, the Securities shall be payable in Dollars. Unless otherwise provided in or pursuant to
this Indenture, Securities shall be issuable in registered form without coupons in denominations of $1,000 and any integral multiple thereof.
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|
Section 303.
|
Execution, Authentication, Delivery and Dating.
|
Securities shall be executed on behalf of the Company by its Chairman, Vice Chairman, Chief Executive Officer, its President or one of its Vice Presidents and by its Treasurer, one of its Assistant
Treasurers, its Secretary or one of its Assistant Secretaries and may (but need not) have its corporate seal or a facsimile thereof reproduced thereon. The signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall, to
the fullest extent permitted by law, bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such
Securities.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver
Securities executed by the Company, to the Trustee for authentication and, provided that the Board Resolution and Officers’ Certificate or supplemental indenture or indentures with respect to such Securities referred to in
Section 301
and a Company Order for the authentication and delivery of such Securities have been delivered to the Trustee, the Trustee in accordance with the Company Order and subject to the provisions hereof and of such Securities shall
authenticate and deliver such Securities. In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to
Section 315(a) through Section 315(d) of the Trust Indenture Act) shall be fully protected in relying upon, an Opinion of Counsel to the following effect, which Opinion of Counsel may contain such assumptions, qualifications and
limitations as such counsel shall deem appropriate:
(a) the form or forms and terms of such Securities have
been established in conformity with
Section 201
and
Section 301
of this Indenture;
(b)
all conditions precedent set forth in
Section 201
,
Section 301
and
Section 303
of this Indenture to the authentication and delivery of such Securities have been complied with and that such Securities, when
completed by appropriate insertions (if applicable), executed by duly authorized officers of the Company, delivered by duly authorized officers of the Company to the Trustee for authentication pursuant to this Indenture, and authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with
their terms, except as enforcement thereof may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance, fraudulent transfer or other similar laws relating to or affecting creditors’
rights generally, and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
If all the Securities of any Series are not to be issued at one time, it shall not be necessary to deliver an Opinion of Counsel at the time of issuance of each Security, but such opinion, with such
modifications as counsel shall deem appropriate, shall be delivered at or before the time of issuance of the first Security of such Series. After any such first delivery, any separate request by the Company that the Trustee authenticate Securities
of such Series for original issue will be deemed to be a certification by the Company that all conditions precedent provided for in this Indenture relating to authentication and delivery of such Securities continue to have been complied with.
17
The Trustee shall not be required to authenticate or to cause an Authenticating Agent to
authenticate any Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable
to the Trustee or if the Trustee, being advised by counsel, determines that such action may not lawfully be taken.
Each
Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Security a certificate of authentication substantially in the form provided for in
Section 202
or
Section 612
executed by or on behalf of the Trustee or by
the Authenticating Agent by the manual signature of one of its authorized signatories. Such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.
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Section 304.
|
Temporary Securities.
|
Pending the preparation of definitive Securities, the Company may execute and deliver to the Trustee and, upon Company Order, the Trustee
shall authenticate and deliver, in the manner provided in
Section 303
, temporary Securities in lieu thereof which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Securities in lieu of which they are issued, in registered form, without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the Company executing such
Securities may determine, as conclusively evidenced by their execution of such Securities. Such temporary Securities may be in global form.
Except in the case of temporary Securities in global form, which shall be exchanged in accordance with the provisions set forth in this Indenture or the provisions established pursuant to
Section 301
, if temporary Securities are issued, the Company shall cause definitive Securities to be prepared without unreasonable delay. Except as otherwise provided in or pursuant to this Indenture, after the preparation of definitive
Securities of the same Series and containing terms and provisions that are identical to those of any temporary Securities, such temporary Securities shall be exchangeable for such definitive Securities upon surrender of such temporary Securities at
an Office or Agency for such Securities, without charge to any Holder thereof. Except as otherwise provided in or pursuant to this Indenture, upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized denominations of the same Series and containing identical terms and provisions. Unless otherwise provided in or pursuant to
this Indenture with respect to a temporary global Security, until so exchanged the temporary Securities of any Series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such Series.
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|
Section 305.
|
Registration, Transfer and Exchange.
|
With respect to the Securities of each Series, if any, the Company shall cause to be kept a register (each such register being herein sometimes referred to as the “
Security Register
”) at
an Office or Agency for such Series in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of the Securities of such Series and of transfers of the Securities of such Series. Such Office
or Agency shall be the “Security Registrar” for that Series of Securities. Unless otherwise specified in or pursuant to this Indenture or the Securities, the initial Security Registrar for each Series of Securities shall be as specified in
the penultimate paragraph of
Section 1002
. The Company shall have the right to remove and replace from time to time the Security Registrar for any Series of Securities; provided that no such removal or replacement shall be effective
until a successor Security Registrar with respect to such Series of Securities shall have been appointed by the Company and shall have accepted such appointment. In the event that the Trustee shall not be or shall cease to be Security Registrar with
respect to a Series of Securities, it shall have the right to examine the Security Register for such Series at all reasonable times. There shall be only one Security Register for each Series of Securities.
Except as otherwise provided in or pursuant to this Indenture, upon surrender for registration of transfer of any Security of any Series
at any Office or Agency for such Series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same Series denominated as authorized in
or pursuant to this Indenture, of a like aggregate principal amount bearing a number not contemporaneously outstanding and containing identical terms and provisions.
18
Except as otherwise provided in or pursuant to this Indenture, at the option of the Holder,
Securities of any Series may be exchanged for other Securities of the same Series containing identical terms and provisions, in any authorized denominations, and of a like aggregate principal amount, upon surrender of the Securities to be exchanged
at any Office or Agency for such Series. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise provided in or pursuant to this Indenture, the global Securities of any
Series shall be exchangeable for definitive certificated Securities of such Series only if (i) the Depositary for such global Securities notifies the Company that it is unwilling or unable to continue as a Depositary for such global Securities
or at any time the Depositary for such global Securities ceases to be a clearing agency registered as such under the Exchange Act, if so required by applicable law or regulation, and no successor Depositary for such Securities shall have been
appointed within 90 days of such notification or of the Company becoming aware of the Depositary’s ceasing to be so registered, as the case may be, (ii) the Company, in its sole discretion, determines that the Securities of such Series
shall no longer be represented by one or more global Securities and executes and delivers to the Trustee a Company Order to the effect that such global Securities shall be so exchangeable, or (iii) an Event of Default has occurred and is
continuing with respect to such Securities.
If the beneficial owners of interests in a global Security are entitled to
exchange such interests for definitive Securities as the result of an event described in clause (i), (ii) or (iii) of the preceding paragraph, then without unnecessary delay, but in any event not later than the earliest date on which such
interests may be so exchanged, the Company shall deliver to the Trustee definitive Securities in such form and denominations as are required by or pursuant to this Indenture, and of the same Series, containing identical terms and in aggregate
principal amount equal to the principal amount of such global Security, executed by the Company. On or after the earliest date on which such interests may be so exchanged, such global Security shall be surrendered from time to time by the Depositary
(or its custodian) as shall be specified in the Company Order with respect thereto (which the Company agrees to deliver), and in accordance with instructions given to the Trustee and the Depositary (which instructions shall be in writing but need
not be contained in or accompanied by an Officers’ Certificate or be accompanied by an Opinion of Counsel), as shall be specified in the Company Order with respect thereto to the Trustee, as the Company’s agent for such purpose, to be
exchanged, in whole or in part, for definitive Securities as described above without charge. The Trustee shall authenticate and make available for delivery, in exchange for each portion of such surrendered global Security, a like aggregate principal
amount of definitive Securities of the same Series of authorized denominations and of like tenor as the portion of such global Security to be exchanged, which shall be in the form of Registered Securities, and which shall be in such denominations
and registered in such names, as shall be specified by the Depositary; provided, however, that no such exchanges may occur during a period beginning at the opening of business 15 days before any selection of Securities of the same Series to be
redeemed and ending on the relevant Redemption Date. Promptly following any such exchange in part, such global Security shall be returned by the Trustee to such Depositary (or its custodian) or such other Depositary (or its custodian) referred to
above in accordance with the instructions of the Company referred to above, and the Trustee shall endorse such global Security to reflect the decrease in the principal amount thereof resulting from such exchange. If a Security is issued in exchange
for any portion of a global Security after the close of business at the Office or Agency for such Security where such exchange occurs on or after (i) any Regular Record Date for such Security and before the opening of business at such Office or
Agency on the next Interest Payment Date, or (ii) any Special Record Date for such Security and before the opening of business at such Office or Agency on the related proposed date for payment of interest or Defaulted Interest, as the case may
be, interest shall not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such Security, but shall be payable on such Interest Payment Date or proposed date for payment, as the case may be, only
to the Person to whom interest in respect of such portion of such global Security shall be payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company evidencing the same debt and entitling the Holders thereof to the same
benefits under this Indenture as the Securities surrendered upon such registration of transfer or exchange.
19
Every Security presented or surrendered for registration of transfer or for exchange or
redemption shall (if so required by the Company or the Security Registrar for such Security) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar for such Security
duly executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any
registration of transfer or exchange of Securities, or any redemption or repayment of Securities, or any conversion or exchange of Securities for other types of securities or property, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to
Section 304
,
Section 905
or
Section 1107
, or
upon surrender in part of any Security for conversion or exchange into Common Stock or other securities or property pursuant to its terms, in each case not involving any transfer.
Except as otherwise provided in or pursuant to this Indenture, the Company shall not be required (i) to issue, register the transfer
of or exchange any Securities during a period beginning at the opening of business 15 days before the day of the selection for redemption of Securities of like tenor and terms and of the same Series under
Section 1103
and ending at the
close of business on the day of such selection, or (ii) to register the transfer of or exchange any Security, or portion thereof, so selected for redemption, except in the case of any Security to be redeemed in part, the portion thereof not to
be redeemed.
The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants or beneficial owners of interests in any
global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
Neither the Trustee nor any Paying Agent shall have
any responsibility for any actions taken or not taken by the Depositary.
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Section 306.
|
Mutilated, Destroyed, Lost and Stolen Securities.
|
If any mutilated Security is surrendered to the Trustee, subject to the provisions of this
Section 306
, the Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series containing identical terms and of like principal amount and bearing a number not contemporaneously outstanding.
If there be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security, and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and, upon the
Company’s request the Trustee shall authenticate and deliver, in exchange for or in lieu of any such destroyed, lost or stolen Security, a new Security of the same Series containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding.
Notwithstanding the foregoing provisions of this
Section 306
, in case
the outstanding principal balance of any mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute a separate obligation of the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such Series duly issued hereunder.
20
The provisions of this Section, as amended or supplemented pursuant to this Indenture with
respect to particular Securities or generally, shall (to the extent lawful) be exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
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|
Section 307.
|
Payment of Interest; Rights to Interest Preserved.
|
Unless otherwise provided in or pursuant to this Indenture, any interest on any Security that shall be payable, and are punctually paid or duly provided for, on any Interest Payment Date shall be paid to
the Person in whose name such Security (or one or more Predecessor Securities) is registered as of the close of business on the Regular Record Date for such interest.
Unless otherwise provided in or pursuant to this Indenture, any interest on any Security that shall be payable, but shall not be punctually paid or duly provided for, on any Interest Payment Date for such
Security (herein called “
Defaulted Interest
”) shall forthwith cease to be payable to the Holder thereof on the relevant Regular Record Date by virtue of having been such Holder; and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make
payment of any Defaulted Interest to the Person in whose name such Security (or a Predecessor Security thereof) shall be registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when so
deposited to be held in trust for the benefit of the Person entitled to such Defaulted Interest as in this Clause provided. Thereupon, the Company shall fix or cause to be fixed a Special Record Date for the payment of such Defaulted Interest, which
shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company), shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to the Holder of such Security
(or a Predecessor Security thereof) at the Holder’s address as it appears in the Security Register not less than 10 days prior to such Special Record Date. The Company may, in its discretion, in the name and at the expense of the Company cause
a similar notice to be published at least once in an Authorized Newspaper of general circulation in the City of Dallas, Texas, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Person in whose name such Security (or a Predecessor Security thereof) shall be registered
at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2).
(2)
The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Security may be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such payment shall be deemed practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or the Securities of any particular Series, at the option of the Company, interest on Securities that bear interest may be paid by mailing a
check to the address of the Person entitled thereto as such address shall appear in the Security Register or by transfer to an account maintained by the payee with a bank located in the United States of America.
21
Subject to the foregoing provisions of this Section and
Section 305
, each
Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
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Section 308.
|
Persons Deemed Owners.
|
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered in the Security Register as the owner of such Security for the purpose of receiving payment of principal of, any premium and (subject to
Section 305
and
Section 307
) interest on such Security and for all other purposes whatsoever, whether or not any payment with respect to such Security shall be overdue, and neither the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its behalf
by a Depositary shall have any rights under this Indenture with respect to such global Security, and such Depositary may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such global Security for all
purposes whatsoever. None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a
global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, any Paying Agent or the Security Registrar from
giving effect to any written certification, proxy or other authorization furnished by the applicable Depositary, as a Holder, with respect to a global Security or impair, as between such Depositary and the owners of beneficial interests in such
global Security, the operation of customary practices governing the exercise of the rights of such Depositary (or its nominee) as the Holder of such global Security.
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|
Section 309.
|
Cancellation.
|
All
Securities surrendered for payment, redemption, registration of transfer, exchange or conversion or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee, and any such
Securities, as well as Securities surrendered directly to the Trustee for any such purpose, shall be cancelled promptly by the Trustee. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be cancelled promptly by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled
as provided in this Section, except as expressly permitted by or pursuant to this Indenture. All cancelled Securities held by the Trustee shall be disposed of in accordance with its procedure for the disposition of cancelled Securities, and the
Trustee upon the written request of the Company shall deliver to the Company a certificate of such disposition, or if directed by a Company Order returned to the Company.
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Section 310.
|
Computation of Interest.
|
Except as otherwise provided in or pursuant to this Indenture or in the Securities of any Series, interest on the Securities shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
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Section 401.
|
Satisfaction and Discharge.
|
Unless, pursuant to
Section 301
, the provisions of this
Section 401
shall not be applicable with respect to the Securities of any Series, upon the direction of the Company by a
Company Order, this Indenture shall cease to be of further effect with respect to any Series of Securities specified in such Company Order, and the Trustee, on receipt of a Company Order, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to such Series, when
22
(1) either
(a) all Securities of such Series theretofore authenticated and delivered (other than (i) Securities of such Series
that have been destroyed, lost or stolen and which have been replaced or paid as provided in
Section 306
and (ii) Securities of such Series for whose payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in
Section 1003
) have been delivered to the Trustee for cancellation; or
(b) all Securities of such Series and not theretofore delivered to the Trustee for cancellation (i) have become due
and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) if redeemable at the option of the Company, are to be called for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose, money in Dollars in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, including the principal of, and any premium and interest on
such Securities, to the date of such deposit (in the case of Securities which have become due and payable) or to the Maturity thereof, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Outstanding Securities of such Series; and
(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this Indenture as to such Series have been complied with.
In the event there are Securities of two or more Series Outstanding hereunder, the Trustee for the Series as to which the Indenture is to be discharged shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested to do so with respect to Securities of such Series as to which it is Trustee and if the other conditions thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture with respect to any Series of Securities, the obligations of the Company
to the Trustee under
Section 607
and, if money shall have been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations of the Company and the Trustee with respect to the Securities of
such Series under
Section 305
,
Section 306
,
Section 403
,
Section 404
,
Section 1002
and
Section 1003
, any rights of Holders of the Securities of such Series (unless otherwise
provided pursuant to
Section 301
with respect to the Securities of such Series) to require the Company to repurchase or repay, and any rights of Holders of the Securities of such Series (unless otherwise provided pursuant to
Section 301
with respect to the Securities of such Series) to convert or exchange, and the obligations of the Company to convert or exchange, such Securities into Common Stock or other securities or property, shall survive.
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Section 402.
|
Defeasance and Covenant Defeasance.
|
(1) Unless, pursuant to
Section 301
, either or both of (i) defeasance of the Securities of or within a Series under clause (2) of this
Section 402
or (ii) covenant
defeasance of the Securities of or within a Series under clause (3) of this
Section 402
shall not be applicable with respect to the Securities of such Series, then such provisions, together with the other provisions of this
Section 402
(with such modifications thereto as may be specified pursuant to
Section 301
with respect to any Securities), shall be applicable to such Securities, and the Company may at its option by Board Resolution, at any
time, with respect to the Securities of or within such Series, elect to have
Section 402(2)
or
Section 402(3)
be applied to such Outstanding Securities upon compliance with the conditions set forth below in this
Section 402
. Unless otherwise specified pursuant to
Section 301
with respect to the Securities of any Series, defeasance under clause (2) of this
Section 402
and covenant defeasance under clause (3) of
23
this
Section 402
may be effected only with respect to all, and not less than all, of the Outstanding Securities of any Series. To the extent that the terms of any Security established
in or pursuant to this Indenture permit the Company or any Holder thereof to extend the date on which any payment of principal of, or premium, if any, or interest, if any, on, such Security is due and payable, then unless otherwise provided pursuant
to
Section 301
, the right to extend such date shall terminate upon defeasance or covenant defeasance, as the case may be.
(2) Upon the Company’s exercise of the above option applicable to this
Section 402(2)
with respect to any Securities of or within a Series, the Company shall be deemed to have been
discharged from its obligations with respect to such Outstanding Securities on the date the conditions set forth in clause (4) of this
Section 402
are satisfied (hereinafter, “
defeasance
”). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Outstanding Securities, which shall thereafter be deemed to be “Outstanding” only for the purposes of clause
(5) of this
Section 402
and the other Sections of this Indenture referred to in clauses (i) through (iv) of this paragraph, and to have satisfied all of its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder:
(i) the rights of Holders of such Outstanding Securities to receive, solely (except as provided in clause (ii) below) from the trust fund described in clause (4)(a) of this
Section 402
and as more fully set forth in this
Section 402
and
Section 403
, payments in respect of the principal of (and premium, if any) and interest, if any, on, such Securities when such payments are due, (ii) the obligations of the Company and the Trustee with
respect to such Securities under
Section 305
,
Section 306
,
Section 1002
and
Section 1003
, any rights of Holders of the Securities of such Series (unless otherwise provided pursuant to
Section 301
with respect to the Securities of such Series) to require the Company to repurchase or repay, and any rights of Holders of such Securities (unless otherwise provided pursuant to
Section 301
with respect to the
Securities of such Series) to convert or exchange, and the obligations of the Company to convert or exchange, such Securities into Common Stock or other securities or property, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (iv) this
Section 402
and
Section 403
and
Section 404
. The Company may exercise its option under this
Section 402(2)
notwithstanding the prior exercise of its option under
Section 402(3)
with respect to such Securities.
(3) Upon the Company’s exercise of the above option
applicable to this
Section 402(3)
with respect to any Securities of or within a Series, the Company shall be released from its obligations under clauses (ii) and (iii) of
Section 1004
and under
Section 1005
,
Section 1006
and
Section 1007
and any other covenant applicable to such Securities with respect to such Securities shall cease to be applicable to such Securities on and after the date the conditions
set forth in clause (4) of this
Section 402
are satisfied (hereinafter, “
covenant defeasance
”), and such Securities shall thereafter be deemed to be not “Outstanding” for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with any such covenant, but shall continue to be deemed “Outstanding” for all other purposes hereunder. For this purpose, such covenant
defeasance means that with respect to such Outstanding Securities, the Company may omit to comply with, and shall have no liability in respect of, any term, condition or limitation set forth in any such Section or any such other covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such Section or such other covenant or by reason of reference in any such Section or such other covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a default or an Event of Default under
Section 501(4)
or
Section 501(8)
or otherwise, as the case may be, but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby.
(4) The following shall be the conditions to application of clause (2) or
(3) of this
Section 402
to any Outstanding Securities of or within a Series:
(a) The Company
shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of
Section 608
who shall agree to comply with the provisions of this
Section 402
applicable to it) as
trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (1) an amount in Dollars or (2) Government Obligations
that through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment of principal of (and premium, if any) and interest, if any, on
such Securities, money or (3) a combination thereof, in any case, in an amount, sufficient, without
24
consideration of any reinvestment of such principal and interest, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (y) the principal of (and premium, if any) and interest, if any, on, such Outstanding Securities on
the Stated Maturity of such principal or installment of principal or interest or the applicable Redemption Date, as the case may be, and (z) any mandatory sinking fund payments or analogous payments applicable to such Outstanding Securities on
the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities.
(b) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company or
any Subsidiary is a party or by which it is bound.
(c) No Event of Default or event which
with notice or lapse of time or both would become an Event of Default with respect to such Securities shall have occurred and be continuing on the date of such deposit, and, solely in the case of defeasance under
Section 402(2)
, no Event
of Default with respect to such Securities under clause (5) or (6) of
Section 501
or event which with notice or lapse of time or both would become an Event of Default with respect to such Securities under clause (5) or
(6) of
Section 501
shall have occurred and be continuing at any time during the period ending on and including the 91
st
day after the date of such deposit (it being understood that this condition to defeasance under
Section 402(2)
shall not be deemed satisfied until the expiration of such period).
(d) In the case
of defeasance pursuant to
Section 402(2)
, the Company shall have delivered to the Trustee an opinion of independent counsel reasonably acceptable to the Trustee stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (y) since the date of this Indenture there has been a change in applicable federal income tax law, in either case to the effect that, and based thereon such opinion of independent counsel
shall confirm that, the Holders of such Outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such defeasance had not occurred; or, in the case of covenant defeasance pursuant to
Section 402(3)
, the Company shall have delivered to the Trustee an opinion of independent counsel
reasonably acceptable to the Trustee to the effect that the Holders of such Outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.
(e) The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance or covenant defeasance, as the
case may be, under this Indenture have been complied with.
(f) If the moneys or Government Obligations or
combination thereof, as the case may be, deposited under clause (a) above are sufficient to pay the principal of, and premium, if any, and interest, if any, on, such Securities provided such Securities are redeemed on a particular Redemption
Date, the Company shall have given the Trustee irrevocable instructions to redeem such Securities on such date and to provide notice of such redemption to Holders as provided in or pursuant to this Indenture.
(g) No event or condition will exist pursuant to the terms of
Section 301(20)
that would prevent the Company
from making payments of principal and premium, if any, and interest on the Securities at the date of the irrevocable deposit referred to above.
(h) Notwithstanding any other provisions of this
Section 402(4)
, such defeasance or covenant defeasance shall be effected in compliance with any additional or substitute terms, conditions or
limitations that may be imposed on the Company in connection therewith pursuant to
Section 301
.
25
(5) Subject to the provisions of the last paragraph of
Section 1003
, all money
and Government Obligations (or other property as may be provided pursuant to
Section 301
) (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee—collectively for purposes of this
Section 402(5)
and
Section 403
, the “
Trustee
”) pursuant to clause (4)(a) of
Section 402
in respect of any Outstanding Securities of any Series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (other than the Company or any Subsidiary or Affiliate of the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal (and premium, if any) and interest but such money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge, imposed on or assessed against the
Government Obligations deposited pursuant to this
Section 402
or the principal or 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 such Outstanding
Securities.
Anything in this
Section 402
to the contrary notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon Company Request any money or Government Obligations (or other property and any proceeds therefrom) held by it as provided in clause (4)(a) of this
Section 402
which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect a defeasance or covenant defeasance,
as applicable, in accordance with this
Section 402
.
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|
Section 403.
|
Application of Trust Money.
|
Subject to the provisions of the last paragraph of
Section 1003
, all money and Government Obligations deposited with the Trustee pursuant to
Section 401
or
Section 402
shall be held in trust and applied by it, in accordance with the provisions of the Securities subject to discharge under Section 401 or defeasance or covenant defeasance under Section 402, and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal, premium and interest for whose payment such money has or Government
Obligations have been deposited with or received by the Trustee; but such money and Government Obligations need not be segregated from other funds except to the extent required by law.
|
|
Section 404.
|
Reinstatement.
|
If the
Trustee (or other qualifying trustee appointed pursuant to
Section 402(4)(a)
) or any Paying Agent is unable to apply any moneys or Government Obligations deposited pursuant to
Section 401(1)
or
Section 402(4)(a)
to pay any principal of or premium, if any, or interest, if any, on, the Securities of any Series by reason of any legal proceeding or any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company’s obligations under this Indenture and the Securities of such Series shall be revived and reinstated as though no such deposit had occurred, until such time as the Trustee (or other qualifying trustee) or Paying
Agent is permitted to apply all such moneys and Government Obligations to pay the principal of and premium, if any, and interest, if any, on the Securities of such Series as contemplated by
Section 401
or
Section 402
as the
case may be, and
Section 403
; provided, however, that if the Company makes any payment of the principal of or premium, if any, or interest if any, on the Securities of such Series following the reinstatement of its obligations as
aforesaid, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the funds held by the Trustee (or other qualifying trustee) or Paying Agent.
|
|
Section 405.
|
Effect on Subordination Provisions.
|
Unless otherwise expressly provided pursuant to
Section 301
with respect to the Securities of any Series, the provisions of
Article Fifteen
hereof, insofar as they pertain to the
Securities of such Series, and the Subordination Provisions of the Securities of such Series established pursuant to
Section 301(20)
are hereby expressly made subject to the provisions for, and to the right of the Company to effect, the
satisfaction and discharge of all of the Securities of such Series as set forth in and pursuant to
Section 401
and the provisions for, and to the right of the Company to effect, defeasance and covenant defeasance of all the Securities of
such Series or designated
26
Securities within such Series as set forth in and pursuant to
Section 402
. As a result, and anything herein to the contrary notwithstanding, if the Company complies with the
provisions of
Section 401
to effect the satisfaction and discharge of all of the Securities of a Series or complies with the provisions of
Section 402
to effect the defeasance or covenant defeasance of designated Securities
within a Series (which may be all of the Securities of such Series), upon the effectiveness of such satisfaction and discharge pursuant to
Section 401
with respect to all of the Securities of such Series or of defeasance or covenant
defeasance pursuant to
Section 402
with respect to the Securities within such Series designated for such defeasance or covenant defeasance, all of the Securities of such Series, in the case of satisfaction and discharge pursuant to
Section 401
, or, in the case of defeasance or covenant defeasance pursuant to
Section 402
, the Securities of such Series as to which defeasance or covenant defeasance, as the case may be, shall have become effective shall
thereupon cease to be so subordinated in right of payment to the Senior Indebtedness and shall no longer be subject to the provisions of
Article Fifteen
or the Subordination Provisions of such Securities established pursuant to
Section 301(20)
and, without limitation to the foregoing, all moneys, Government Obligations and other securities or property deposited with the Trustee (or other qualifying trustee) in trust in connection with such satisfaction and
discharge, defeasance or covenant defeasance, as the case may be, and all proceeds therefrom may be applied to pay the principal of, and premium, if any, and interest, if any, on, such Securities as and when the same shall become due and payable
notwithstanding the provisions of
Article Fifteen
or such Subordination Provisions without regard to whether any or all of the Senior Indebtedness then outstanding shall have been paid or otherwise provided for.
ARTICLE FIVE
REMEDIES
|
|
Section 501.
|
Events of Default.
|
“Events of Default,” wherever used in this Indenture with respect to Securities of any Series, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree, or order of any court or any order, rule, or regulation of any
administrative or governmental body) unless such event is specifically deleted or modified in or pursuant to the supplemental indenture, Board Resolution or Officers’ Certificate establishing such Series of Securities or the terms of the
Securities of such Series pursuant to this Indenture:
(1) default in the payment of any interest on any of the Securities of
such Series when such interest becomes due and payable, and continuance of such default for a period of 30 days; or
(2)
default in the payment of any principal of or premium, if any, on any of the Securities of such Series when due (whether at Maturity or otherwise and whether payable in cash or in shares of Common Stock or other securities or property); or
(3) default in the deposit of any sinking fund payment or payment under any analogous provision when due with respect to any
of the Securities of such Series; or
(4) default in the performance, or breach, of any covenant or warranty of the Company in
this Indenture or any Security of such Series (other than a covenant or warranty for which the consequences of breach or nonperformance are addressed elsewhere in this
Section 501
or a covenant or warranty which has expressly been
included in this Indenture, whether or not by means of a supplemental indenture, solely for the benefit of Securities of a Series other than such Series), and continuance of such default or breach (without such default or breach having been waived
in accordance of the provisions of this Indenture) for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of such Series 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
(5) the entry of a decree or order for relief in respect of the Company by a court having jurisdiction in the premises in an involuntary
case or proceeding under any applicable bankruptcy, insolvency, or reorganization law, now or hereafter in effect of the United States of America or any political subdivision thereof, and such decree or order shall have continued unstayed and in
effect for a period of 60 consecutive days; or
27
(6) the commencement by the Company of a voluntary case under any applicable bankruptcy,
insolvency or reorganization law, now or hereafter in effect of the United States of America or any political subdivision thereof, or the consent by the Company to the entry of a decree or order for relief in an involuntary case or proceeding under
any such law; or
(7) any other Event of Default provided in or pursuant to this Indenture with respect to Securities of such
Series.
|
|
Section 502.
|
Acceleration of Maturity; Rescission and Annulment.
|
Unless the supplemental indenture, Board Resolution or Officers’ Certificate establishing or evidencing the establishment of a Series of Securities or the terms of the Securities of a Series pursuant
to this Indenture shall provide otherwise, if an Event of Default (other than an Event of Default specified in clause (5) or (6) of
Section 501
) with respect to Securities of any Series occurs and is continuing, then either the
Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of such Series may declare the principal of all the Securities of such Series, or such lesser amount as may be provided for in the Securities of
such Series, and accrued and unpaid interest, if any, thereon to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders), and upon any such declaration such principal or such lesser amount,
as the case may be, and such accrued and unpaid interest shall become immediately due and payable. If an Event of Default specified in clause (5) or (6) of
Section 501
occurs, then the principal amount of all of the Securities
of such Series Outstanding, or such lesser amount as may be provided for in the Securities of such Series, and accrued and unpaid interest, if any, on all Securities of all Series Outstanding shall become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder of the Securities of such Series.
At any time after the
occurrence of an Event of Default with respect to Securities of one or more Series and before a judgment or decree for payment of the money due has been obtained by the Trustee as provided below in this
Article Five
, the Holders of not
less than a majority in aggregate principal amount of the Outstanding Securities of all affected Series (voting as one class), by written notice to the Company and the Trustee may waive all defaults with respect to all affected Series, and may
rescind and annul the consequences of the Event of Default, if:
(1) the Company has paid or deposited with the Trustee a sum
of money sufficient to pay (or, to the extent that the terms of the Securities of such Series established pursuant to
Section 301
expressly provide for payment to be made in shares of Common Stock or other securities or property, shares
of Common Stock or other securities or property, together with cash in lieu of fractional shares or securities, sufficient to pay)
(a) all overdue installments of any interest on any Securities of such Series that have become due otherwise than by such declaration of acceleration,
(b) the principal of and any premium on any Securities of such Series which have become due otherwise than by such
declaration of acceleration and, to the extent permitted by applicable law, interest thereon at the rate or respective rates, as the case may be, provided for in or with respect to such Securities, or, if no such rate or rates are so provided, at
the rate or respective rates, as the case may be, of interest borne by such Securities,
(c) to the extent
permitted by applicable law, interest upon installments of any interest, if any, which have become due otherwise than by such declaration of acceleration at the rate or respective rates, as the case may be, provided for in or with respect to such
Securities, or, if no such rate or rates are so provided, at the rate or respective rates, as the case may be, of interest borne by such Securities, and
(d) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due the Trustee
under
Section 607
; and
(2) all Events of Default with respect to Securities of all affected Series other than the
nonpayment of the principal of, or any premium and interest on, Securities of the affected Series that shall have become due solely by such acceleration, shall have been cured or waived as provided in
Section 513
.
28
No such rescission shall affect any subsequent default or impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall
have been accelerated and declared due and payable pursuant to the provisions of this Indenture, then, from and after the date of such Event of Default, unless such Event of Default has been rescinded and annulled as provided above, the principal
amount of such Original Issue Discount Securities shall be deemed, for all purposes under this Indenture, to be such portion of the principal as shall be due and payable as a result of such acceleration, and the payment of such portion of the
principal as shall be due and payable as a result of such acceleration, together with interest, if any, on such portion and all other amounts owing under such Original Issue Discount Security, shall constitute payment in full of such Original Issue
Discount Securities.
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|
Section 503.
|
Collection of Indebtedness and Suits for Enforcement by Trustee.
|
The Company covenants that if:
(1) default is made in the payment of any
interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days,
(2)
default is made in the payment of the principal of (or premium, if any, on) any Security at its Maturity, or
(3) default is
made in the making or satisfaction of any sinking fund or analogous obligation when the same becomes due pursuant to the terms of any Security,
the Company will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and
payable with respect to such Securities, with interest upon the overdue principal, any premium and, to the extent permitted by applicable law, upon any overdue installments of interest at the rate or respective rates, as the case may be, provided
for or with respect to such Securities or, if no such rate or rates are so provided, at the rate or respective rates, as the case may be, of interest borne by such Securities, subject, however, to any limitation on such obligation of the Company to
pay such amounts as shall be set forth in the supplemental indenture, Board Resolution or Officers’ Certificate establishing or evidencing the establishment of a Series of Securities or the terms of the Series of Securities of which such
Security is a part pursuant to this Indenture, and, in addition thereto, such further amount of money as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel and all other amounts due to the Trustee under
Section 607
.
If the Company
fails to pay the money it is required to pay the Trustee pursuant to the preceding paragraph forthwith upon the demand of the Trustee, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any Series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement
of any covenant or agreement in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other proper remedy.
29
|
|
Section 504.
|
Trustee May File Proofs of Claim.
|
In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to
(1) to file and prove a claim for the whole amount, or such lesser amount as may be provided for in the Securities of such Series, of the
principal and any premium or interest owing and unpaid in respect of such Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents or counsel) and of the Holders of such Securities allowed in such judicial proceeding, and
(2) collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or other similar official in any such judicial proceeding is authorized by each Holder of Securities to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities and to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements, and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607
.
No provision of this
Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Security any plan of reorganization, arrangement, adjustment, or composition affecting the Securities or the rights of any
Holder or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, the Trustee may vote on behalf of the Holders for the election of a trustee in bankruptcy or similar official and may be a
member of a creditors, or other similar committee.
|
|
Section 505.
|
Trustee May Enforce Claims Without Possession of Securities.
|
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production of such Securities in
any related proceeding, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses,
disbursements, and advances of the Trustee, its agents, and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
|
|
Section 506.
|
Application of Money Collected.
|
Any money collected by the Trustee pursuant to this
Article Five
or, after an Event of Default, any money or other property distributable in respect of the Company’s obligations under
this Indenture shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation
on such Securities of the payment if only partially paid and upon surrender of such Securities if fully paid:
FIRST: To the
payment of all amounts due the Trustee (including any predecessor trustee) under
Section 607
; and
SECOND: To the
payment of amounts then due and unpaid to the holders of Senior Indebtedness, to the extent required pursuant to the Subordinated Provisions established with respect to the Securities of such Series pursuant to
Section 301(20)
;
THIRD: To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in
respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the aggregate amounts due and payable on such Securities for principal and any premium and interest,
respectively; and
FOURTH: The balance, if any, to the Person or Persons entitled thereto.
30
|
|
Section 507.
|
Limitation on Suits.
|
No
Holder of any Security of any Series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy under this Indenture, unless:
(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the
Securities of that Series;
(2) the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities
of that Series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee under the Indenture;
(3) such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses, and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request, and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of the Outstanding Securities of that Series;
it being understood and intended that
no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb, or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner provided in this Indenture and for the equal and ratable benefit of all of such Holders.
|
|
Section 508.
|
Unconditional Right of Holders to Receive Principal, Premium and Interest.
|
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and
(subject to
Section 305
and
Section 307
) any interest on such Security on the respective Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and, in the case of any
Security that is convertible into or exchangeable for other securities or property, to convert or exchange, as the case may be, such Security in accordance with its terms), and to institute suit for the enforcement of any such payment and such
rights shall not be impaired without the consent of such Holder.
|
|
Section 509.
|
Restoration of Rights and Remedies.
|
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions under this
Indenture and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
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|
Section 510.
|
Rights and Remedies Cumulative.
|
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost, or stolen Securities in the last paragraph of
Section 306
, no right or remedy conferred
in this Indenture upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and
remedy given under this Indenture or now or in the future existing at law or in equity or otherwise. The assertion or employment of any right or remedy under this Indenture, or otherwise, shall not prevent the concurrent assertion or employment of
any other appropriate right or remedy.
31
|
|
Section 511.
|
Delay or Omission Not Waiver.
|
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of or
acquiescence in any such Event of Default. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
|
|
Section 512.
|
Control by Holders.
|
The
Holders of a majority in aggregate principal amount of the Outstanding Securities of any Series shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Securities of such Series, provided that
(1) such direction shall not
be in conflict with any rule of law or with this Indenture or with the Securities of any Series,
(2) the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such direction, and
(3) the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability.
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|
Section 513.
|
Waiver of Past Defaults.
|
Subject to
Section 502
, the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of
any Series may on behalf of the Holders of all the Securities of such Series waive any past default under this Indenture with respect to such Series and its consequences, except a default (1) in the payment of the principal of, or any premium
or interest on, any Security of such Series, or (2) in respect of a covenant or provision of this Indenture which under
Article Nine
cannot be modified or amended without the consent of the Holder of each Outstanding Security of
such affected Series.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising from such
default shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any consequent right.
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|
Section 514.
|
Waiver of Usury, Stay or Extension Laws.
|
The Company covenants that (to the extent that it may lawfully do so) it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or any other law wherever enacted, now or at any time hereafter in force, which would prohibit or forgive the Company from paying all or any portion of the principal of or premium, if any, or interest, if any, on any
Securities as contemplated herein and therein or which may affect the covenants or the performance of this Indenture or the Securities; and the Company (to the extent that it may lawfully do so) expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee or the Holders, but will suffer and permit the execution of every such power as though no such law had been enacted.
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Section 515.
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Undertaking for Costs.
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All parties to this Indenture agree, and each Holder of any Securities by his acceptance of such Securities shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered, or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorney’s 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 515
shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any Series, or to any suit instituted by any Holder for the enforcement of the payment of the principal
of (or premium, if any) or interest, if any, on any Securities on or after the Stated Maturity or Maturities expressed in such Securities (or, in the case of redemption, on or after the Redemption Date) or for the enforcement of the right, if any,
to convert or exchange any Security into Common Stock or other securities in accordance with its terms).
ARTICLE SIX
THE TRUSTEE
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Section 601.
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Duties of Trustee.
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(1)
If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it hereby, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.
(2) Except during the continuance of an Event of Default:
(a) the duties of the Trustee will be determined solely by the express provisions hereof and the Trustee need
perform only those duties that are specifically set forth herein and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements hereof. However, the Trustee will examine the certificates and opinions to determine whether or not they conform
to the requirements hereof.
(3) Whether or not therein expressly so provided, every provision hereof that in any way relates
to the Trustee is subject to paragraphs (1) and (2) of this Section 601 and to Section 602.
(4) No
provision hereof will require the Trustee to expend or risk its own funds or incur any liability.
(5) The Trustee will not be
liable for interest on any money received by it except as the Trustee may agree in writing with the Company.
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Section 602.
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Certain Rights of Trustee.
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Subject to Section 315(a) through Section 315(d) of the Trust Indenture Act:
(1) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or a
Company Order (in each case, other than delivery of any Security, to the Trustee for authentication and delivery pursuant to
Section 303
which shall be sufficiently evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
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(3) whenever in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence shall be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’
Certificate;
(4) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion
of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. The Trustee may act through its
attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.
(5)
the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by or pursuant to this Indenture at the request or direction of any of the Holders of Securities of any Series pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine, during business hours and upon reasonable notice, the books, records and premises of the Company, personally or by agent or attorney,
at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation;
(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;
(8) the Trustee shall
not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;
(9) in no event shall the Trustee be responsible or liable for special, indirect or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;
(10) The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default, except failure by the Company
to pay or cause to be made any of the payments required to be made to the Trustee, unless a Responsible Officer shall be specifically notified by a writing of such Default by the Company or by the Holders of at least 25% in aggregate principal
amount of the Outstanding Securities then outstanding delivered to the Corporate Trust Office of the Trustee and in the absence of such notice so delivered the Trustee may conclusively assume no Default exists.
(11) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and
(12) the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture.
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Section 603.
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Notice of Defaults.
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Within 90 days after the Trustee is notified of the occurrence of any default hereunder with respect to the Securities of any Series, the
Trustee shall transmit by mail to all Holders of Securities of such Series entitled to receive reports pursuant to
Section 703(3)
, notice of such default hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any), or interest, if any, on, any Security of such Series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the best interest of the Holders of Securities of such
Series; and provided, further, that in the case of any default of the character specified in
Section 501(4)
or
Section 501(8)
with respect to Securities of such Series, no such notice to Holders shall be given until at least
30 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event that is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such Series.
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Section 604.
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Not Responsible for Recitals or Issuance of Securities.
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The recitals contained herein and in the Securities, except the Trustee’s certificate of authentication, shall be taken as the statements of the Company and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities, except that the Trustee represents that it is duly authorized to execute and
deliver this Indenture, authenticate the Securities and perform its obligations hereunder and that the statements made by it in a Statement of Eligibility on Form T-1 supplied to the Company are true and accurate, subject to the qualifications set
forth therein. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of the Securities or the proceeds thereof. The Trustee will not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities or any money paid to the Company or upon the Company’s direction under any provision hereof, it
will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection
with the sale of the Securities or pursuant to this Indenture other than its certificate of authentication.
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Section 605.
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May Hold Securities.
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The
Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other Person that may be an agent of the Trustee or the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject
to Section 310(b) and Section 311 of the Trust Indenture Act, may otherwise deal with the Company with the same rights that it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other Person.
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Section 606.
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Money Held in Trust.
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Except as provided in
Section 403
and
Section 1003
, money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law and shall be held uninvested. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.
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Section 607.
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Compensation and Reimbursement.
|
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by the Trustee hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
35
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to the Trustee’s negligence or bad faith; and
(3) to
indemnify each of the Trustee or any predecessor Trustee and their agents for, and to hold them harmless against, any loss, liability or reasonable expense (including, without limitation, the reasonable fees and disbursements of the Trustee’s
agents, legal counsel, accountants and experts) and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee), incurred without negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including the reasonable costs and expenses of defending themselves against any claim (whether asserted by the Company, or any Holder or any other Person) or liability in connection
with the exercise or performance of any of their powers or duties hereunder, or in connection with enforcing the provisions of this Section, except to the extent that any such loss, liability or expense was due to the Trustee’s negligence or
bad faith.
As security for the performance of the obligations of the Company under this Section, the Trustee shall have a
lien prior to the Securities of any Series upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of, or premium or interest on Securities. Such lien will survive the
satisfaction and discharge hereof.
Any compensation or expense incurred by the Trustee after a default specified by
Section 501(5)
or
Section 501(6)
is intended to constitute an expense of administration under any then applicable bankruptcy or insolvency law. “Trustee” for purposes of this
Section 607
shall include
any predecessor Trustee, but the negligence or bad faith of any Trustee shall not affect the rights of any other Trustee under this
Section 607
. The provisions of this
Section 607
shall, to the extent permitted by law,
survive any termination of this Indenture (including, without limitation, termination pursuant to any Bankruptcy Laws) and the resignation or removal of the Trustee.
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Section 608.
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Corporate Trustee Required; Eligibility.
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(1) There shall at all times be a Trustee hereunder that is a corporation, organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia,
eligible under Section 310(a)(1) of the Trust Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act and that has a combined capital and surplus (computed in accordance with Section 310(a)(2) of the
Trust Indenture Act) of at least $50,000,000 subject to supervision or examination by federal or state authority. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
(2) The following indenture shall be considered
specifically described herein for purposes of clause (i) of the proviso contained in Section 310(b)(1) of the Trust Indenture Act: Senior Debt Indenture dated as of June 25, 2014 between the Company and Wells Fargo Bank, National
Association, as trustee; and, pursuant to Section 310(b)(1)(C)(i) of the Trust Indenture Act, unless otherwise ordered by the Commission, an event of default by the Company under this Indenture will not disqualify the Trustee under this
Indenture because it is the trustee under such other indenture.
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Section 609.
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Resignation and Removal; Appointment of Successor.
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(1) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this
Article Six
shall become effective until the acceptance of appointment by the successor
Trustee pursuant to
Section 610
.
(2) The Trustee may resign at any time with respect to the Securities of one or
more Series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by
Section 610
shall not have been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may, at the Company’s expense, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to such Series.
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(3) The Trustee may be removed at any time with respect to the Securities of any Series by
Act of the Holders of a majority in principal amount of the Outstanding Securities of such Series, delivered to the Trustee and the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with the
obligations imposed upon it under
Section 310(b)
of the Trust Indenture Act with respect to Securities of any Series after written request therefor by the Company or any Holder of a Security of such Series who has been a bona fide Holder
of a Security of such Series for at least six months, or
(b) the Trustee shall cease to be eligible under
Section 608
and shall fail to resign after written request therefor by the Company or any such Holder, or
(c) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case,
(i) the Company, by or pursuant to a Board Resolution, may remove the Trustee with respect to all Securities or the Securities of such Series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder of a Security who
has been a bona fide Holder of a Security of such Series 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 Trustee with respect to all Securities
of such Series and the appointment of a successor Trustee or Trustees.
(5) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more Series, the Company, by or pursuant to a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those Series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such Series and that at any time there shall be only one Trustee
with respect to the Securities of any particular Series) and shall comply with the applicable requirements of
Section 610
. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any Series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such Series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of
Section 610
, become the successor Trustee with respect to the Securities of such Series and to that extent
supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any Series shall have been so appointed by the Company or the Holders of Securities and accepted appointment in the manner required
by
Section 610
, any Holder of a Security who has been a bona fide Holder of a Security of such Series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such Series.
(6) The Company shall give notice of
each resignation and each removal of the Trustee with respect to the Securities of any Series and each appointment of a successor Trustee with respect to the Securities of any Series by mailing written notice of such event by first-class mail,
postage prepaid, to the Holders of Securities, if any, of such Series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such Series and the
address of its Corporate Trust Office.
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Section 610.
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Acceptance of Appointment by Successor.
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(1) Upon the appointment hereunder of any successor Trustee with respect to all Securities, such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties hereunder of the retiring Trustee; but, on the request of the Company or such
37
successor Trustee, such retiring Trustee, upon payment of its charges, shall execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and, subject to
Section 1003
, shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 607
.
(2) Upon the appointment hereunder of any successor Trustee with respect to the Securities of one or
more (but not all) Series, the Company, the retiring Trustee and such successor Trustee shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, such successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those Series to which the
appointment of such successor Trustee relates, (ii) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or those Series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for
any notice given to, or received by, or any act or failure to act on the part of any other Trustee hereunder, and, upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein, such retiring Trustee shall have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture with respect
to the Securities of that or those Series to which the appointment of such successor Trustee relates other than as hereinafter expressly set forth, and such successor Trustee, without any further act, deed or conveyance, shall become vested with all
the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those Series to which the appointment of such successor Trustee relates; but, on request of the Company or such successor Trustee, such retiring
Trustee, upon payment of its charges with respect to the Securities of that or those Series to which the appointment of such successor relates and subject to
Section 1003
shall duly assign, transfer and deliver to such successor Trustee,
to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those Series to which the appointment of such successor Trustee relates, subject to
its claim, if any, provided for in
Section 607
.
(3) Upon request of any Person appointed hereunder as a successor
Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (1) or (2) of this Section, as the case
may be.
(4) No Person shall accept its appointment hereunder as a successor Trustee unless at the time of such acceptance
such successor Person shall be qualified and eligible under this Article.
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Section 611.
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Merger, Conversion, Consolidation or Succession to Business.
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Any corporation into which the 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 Trustee shall
be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder (provided that such corporation shall otherwise be qualified and eligible under
this Article), without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated but not delivered by the Trustee then in office, any such successor to such
authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. In case any Securities shall not have been authenticated by
such predecessor Trustee, any such successor Trustee may authenticate and deliver such Securities in either its own name or that of its predecessor Trustee.
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Section 612.
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Appointment of Authenticating Agent.
|
The Trustee may appoint one or more Authenticating Agents acceptable to the Company with respect to one or more Series of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of that or those Series issued upon original issue, exchange, registration of transfer, partial redemption, partial repayment, partial conversion or exchange for Common Stock or other securities or property, or pursuant to
Section 306
, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent
shall be reasonably acceptable to the Company and, except as provided in or pursuant to this Indenture, shall at all times be a corporation that would be permitted by the Trust Indenture Act to act as trustee under an indenture qualified under the
Trust Indenture Act, is authorized under applicable law and by its charter to act as an Authenticating Agent and has a combined capital and surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000. 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 specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate agency or corporate trust business of an Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and the Company. The
Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent that shall be acceptable to the Company and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities, if any, of the Series with respect to which such Authenticating Agent shall serve, as their names and addresses appear in the Security Register. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of this
Section 612
.
The Company
agrees to pay each Authenticating Agent from time to time reasonable compensation for its services under this Section. If the Trustee makes such payments, it shall be entitled to be reimbursed for such payments, subject to the provisions of
Section 607
.
The provisions of
Section 308
,
Section 604
and
Section 605
shall
be applicable to each Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more Series of
Securities pursuant to this Section, the Securities of such Series may have endorsed thereon, in addition to or in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in substantially the following
form:
This is one of the Securities of the Series designated herein referred to in the within-mentioned Indenture.
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as Trustee
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By:
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As Authenticating Agent
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By:
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Authorized Signatory
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If all of the Securities of any Series may not be originally issued at one time, and if the Trustee
does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Company desires to have Securities of such Series authenticated upon original issuance, the Trustee, if so requested in
writing (which writing need not be accompanied by or contained in an Officers’ Certificate of the Company), shall appoint in accordance with this Section an Authenticating Agent having an office in a Place of Payment designated by the Company
with respect to such Series of Securities.
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
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Section 701.
|
Company to Furnish Trustee Names and Addresses of Holders.
|
In accordance with Section 312(a) of the Trust Indenture Act, the Company shall furnish or cause to be furnished to the Trustee
(1) semi-annually with respect to Securities of each Series not later than and of the year or upon such other dates as are set forth in
or pursuant to the Board Resolution or indenture supplemental hereto authorizing such Series, a list, in each case in such form as the Trustee may reasonably require, of the names and addresses of Holders as of the applicable date, and
(2) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the time such list is furnished,
provided, however, that so long
as the Trustee is the Security Registrar no such list shall be required to be furnished.
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Section 702.
|
Preservation of Information; Communications to Holders.
|
The Trustee shall comply with the obligations imposed upon it pursuant to Section 312 of the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company, the Trustee, any Paying Agent or any Security Registrar 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 Section 312(c) of the Trust Indenture Act, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act.
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Section 703.
|
Reports by Trustee.
|
(1)
Within 60 days after July 15 of each year commencing with the first July 15 following the first issuance of Securities pursuant to
Section 301
, if required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report dated as of such July 15 with respect to any of the events specified in said Section 313(a) and Section 313(b)(2) that may have occurred since the
later of the immediately preceding July 15 and the date of this Indenture.
40
(2) The Trustee shall transmit the reports required by Section 313(a) of the Trust
Indenture Act at the times specified therein.
(3) Reports pursuant to this Section shall be transmitted in the manner and to
the Persons required by Section 313(c) and Section 313(d) of the Trust Indenture Act.
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Section 704.
|
Reports by Company.
|
(1)
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
(a) file with the Trustee,
within 15 days after the Company files 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 the Commission may from time to time by
rules and regulations prescribe) that the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and
reports that may be 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) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the
Commission, such additional certificates, information, documents and reports with respect to compliance by the Company, with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and
(c) transmit within 30 days after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).
(2) The Company intends to file the reports referred to in Section 704(1) with the Commission in electronic form
pursuant to Regulation S-T of the Commission using the Commission’s Electronic Data Gathering, Analysis and Retrieval system. Compliance with the foregoing, or any successor electronic system approved by the Commission, shall constitute
delivery by the Company of such reports to the Trustee and Holders in compliance with the provision of Section 704(1) and TIA Section 314(a). Notwithstanding anything to the contrary herein, the Trustee shall have no duty to search for or
obtain any electronic or other filings that the Company makes with the Commission, regardless of whether such filings are periodic, supplemental or otherwise. Delivery of the reports, information and documents to the Trustee pursuant to this
Section 704(2) shall be solely for the purposes of compliance with this Section 704(2) and with TIA Section 314(a). The Trustee’s receipt of such reports, information and documents shall not constitute notice to it of the content
thereof or of any matter determinable from the content thereof (and the Trustee shall not have any duty to ascertain or inquire as to such content or matter), including the Company’s compliance with any of its covenants hereunder, as to which
the Trustee is conclusively entitled to rely upon Officers’ Certificates.
41
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
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Section 801.
|
Company May Consolidate, Etc., Only on Certain Terms.
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The Company shall not, in any transaction or series of related transactions, consolidate with or merge into any Person or sell, assign, transfer, lease or otherwise convey all or substantially all its
properties and assets to any Person, unless:
(1) either (A) the Company shall be the continuing Person (in the case of a
merger), or (B) the successor Person (if other than the Company) formed by such consolidation or into which the Company is merged or which acquires by sale, assignment, transfer, lease or other conveyance all or substantially all the properties
and assets of the Company shall be a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume, by an indenture (or indentures, if at such time there
is more than one Trustee) supplemental hereto, executed by such successor corporation and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, any premium and interest on, all the
Outstanding Securities and the due and punctual performance and observance of every obligation in this Indenture and the Outstanding Securities on the part of the Company to be performed or observed, and which supplemental indenture shall provide
for conversion or exchange rights in accordance with the provisions of the Securities of any Series that are convertible or exchangeable into Common Stock or other securities;
(2) immediately after giving effect to such transaction and treating any indebtedness that becomes an obligation of the Company or any Subsidiary as a result of that transaction as having been incurred by
the Company or any Subsidiary at the time of the transaction, no Event of Default, and no event which, after notice or lapse of time, or both, would become an Event of Default, shall have occurred and be continuing; and
(3) either the Company or the successor Person shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, sale, assignment, transfer, lease or other conveyance and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this
Article Eight
and that all conditions precedent herein provided for relating to such transaction have been complied with.
For purposes of the foregoing, any sale, assignment, transfer, lease or other conveyance of all or any of the properties and assets of one or more Subsidiaries of the Company (other than to the Company or
another Subsidiary), which, if such properties and assets were owned by the Company, would constitute all or substantially all of the Company’s properties and assets, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
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Section 802.
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Successor Person Substituted for Company.
|
Upon any consolidation by the Company with or merger of the Company into any other Person or any sale, assignment, transfer, lease or conveyance of all or substantially all of the properties and assets of
the Company to any Person in accordance with
Section 801
, the successor Person formed by such consolidation or into which the Company is merged or to which such sale, assignment, transfer, lease or other conveyance is made shall succeed
to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; and thereafter, except in the case of a lease, the
predecessor Person shall be released from all obligations and covenants under this Indenture and the Securities.
42
ARTICLE NINE
SUPPLEMENTAL INDENTURES
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Section 901.
|
Supplemental Indentures without Consent of Holders.
|
Without the consent of any Holders of Securities, the Company (when authorized by or pursuant to a Board Resolution) and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the
succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company contained herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders of all or any Series of Securities (as shall be specified in such supplemental indenture or indentures) or to surrender any right
or power herein conferred upon the Company with respect to all or any Series of Securities issued under this Indenture (as shall be specified in such supplemental indenture or indentures); or
(3) to permit or facilitate the issuance of Securities of a Series in uncertificated or global form, provided any such action shall not
adversely affect the interests of the Holders of Securities of any Series; or
(4) to establish any Series of Securities and
the form or terms of Securities of any Series as permitted by
Section 201
and
Section 301
, including, without limitation, any Subordination Provisions and any conversion or exchange provisions applicable to Securities that
are convertible into or exchangeable for other securities or property, and any deletions from or additions or changes to this Indenture in connection therewith (provided that any such deletions, additions and changes shall not be applicable to any
other Series of Securities then Outstanding); or
(5) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of
Section 610
; or
(6) (a) to cure any ambiguity or to correct or
supplement any provision herein that may be defective or that may be inconsistent with any other provision herein or (b) to make any other provisions with respect to matters or questions arising under this Indenture that shall not adversely
affect the interests of the Holders of Securities of any Series then Outstanding in any material respect; or
(7) to add any
additional Events of Default with respect to all or any Series of Securities (as shall be specified in such supplemental indenture); or
(8) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance, covenant defeasance and/or satisfaction and discharge of any Series
of Securities pursuant to
Article Four
, provided that any such action shall not adversely affect the interests of any Holder of a Security of such Series or any other Security in any material respect; or
(9) to make provisions with respect to conversion or exchange rights of Holders of Securities of any Series; or
(10) to amend, supplement or eliminate any provision contained herein or in any supplemental indenture or in any Securities (which
amendment or supplement may apply to one or more Series of Securities or to one or more Securities within any Series as specified in such supplemental indenture or indentures), provided that such amendment, supplement or elimination does not apply
to any Outstanding Security issued prior to the date of such supplemental indenture and entitled to the benefits of such provision; or
(11) in the case of any Series of Securities which are convertible into or exchangeable for Common Stock or other securities or property, to safeguard or provide for the conversion or exchange rights, as
the case may
43
be, of such Securities in the event of any reclassification or change of outstanding shares of Common Stock or any merger, consolidation, statutory share exchange or combination of the Company
with or into another Person or any sale, lease, assignment, transfer, disposition or other conveyance of all or substantially all of the properties and assets of the Company to any other Person or other similar transactions, if expressly required by
the terms of such Series of Securities established pursuant to
Section 301
; or
(12) to add to, delete from or
revise the conditions, limitations or restrictions on issue, authentication and delivery of Securities of any Series; or
(13)
to conform any provision in this Indenture to the requirements of the Trust Indenture Act; or
(14) to make any change that
does not adversely affect the legal rights under this Indenture of any Holder of Securities of any Series issued under this Indenture.
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Section 902.
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Supplemental Indentures with Consent of Holders.
|
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each Series affected by such supplemental indenture, by Act of said Holders delivered to
the Company and the Trustee, the Company (when authorized by or pursuant to a Board Resolution), and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of the Securities of such Series or of modifying in any manner the rights of the Holders of Securities of such Series under this Indenture; provided, that no such supplemental indenture, without
the consent of the Holder of each Outstanding Security affected thereby, shall
(1) change the Stated Maturity of the
principal of, or premium, if any, or any installment of interest, if any, on, any Security, or reduce the principal amount thereof or the premium, if any, thereon or the rate (or modify the calculation of such rate) of interest thereon, or reduce
the amount payable upon redemption thereof at the option of the Company or repayment thereof at the option of the Holder, or reduce the amount of the principal of any Original Issue Discount Security that would be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to
Section 502
or the amount thereof provable in bankruptcy pursuant to
Section 504,
or extend the time of payment of interest on any Security, or change any of the conversion,
exchange or redemption provisions of any Security or change the Place of Payment where the principal of, any premium or interest on, any Security is payable, or impair the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), in each case as such Stated Maturity, Redemption Date or date for repayment may, if applicable, be extended in accordance with the terms of such Security,
or in the case of any Security that is convertible into or exchangeable for other securities or property, impair the right to institute suit to enforce the right to convert or exchange such Security in accordance with its terms or modify the ranking
or priority of the Securities in a manner adverse to the Holders of the Securities, or
(2) reduce the percentage in principal
amount of the Outstanding Securities of any Series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in
Section 513
or
Section 1006
of this Indenture, or reduce the requirements of
Section 1404
for quorum or voting, or
(3) modify any of the provisions of this
Section 902
,
Section 513
or
Section 1006
, except to increase
any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby.
A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture which shall have been included
solely for the benefit of one or more particular Series of Securities, or which modifies the rights of the Holders of Securities of such Series with respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other Series.
Anything in this Indenture to the contrary notwithstanding, if
more than one Series of Securities is Outstanding, the Company shall be entitled to enter into a supplemental indenture under this
Section 902
with respect to any one or more Series of Outstanding Securities without entering into a
supplemental indenture with respect to any other Series of Outstanding Securities.
44
It shall not be necessary for any Act of Holders of Securities under this
Section 902
to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
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Section 903.
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Execution of Supplemental Indentures.
|
As a condition to executing, or accepting the additional trusts created by, any supplemental indenture permitted by this
Article Nine
or the modifications thereby of the trust created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section 315(a) through Section 315(d) of the Trust Indenture Act) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel to the
effect that the execution of such supplemental indenture is authorized or permitted by this Indenture and that such supplemental indenture has been duly authorized, executed and delivered by, and is a valid, binding and enforceable obligation of,
the Company, subject to customary exceptions. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
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Section 904.
|
Effect of Supplemental Indentures.
|
Upon the execution of any supplemental indenture under this
Article Nine
, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of a Security theretofore or thereafter authenticated and delivered hereunder.
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Section 905.
|
Reference in Securities to Supplemental Indentures.
|
Securities of any Series authenticated and delivered after the execution of any supplemental indenture pursuant to this
Article Nine
may, and shall if required by the Trustee, bear a notation
in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any Series so modified as to conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such Series.
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Section 906.
|
Effect on Senior Indebtedness.
|
No supplemental indenture shall directly or indirectly modify or eliminate the Subordination Provisions or the definition of “Senior Indebtedness” applicable with respect to the Securities of
any Series in any manner that might terminate or impair the subordination of such Series of Securities to such Senior Indebtedness without the prior written consent of the Holders of such Senior Indebtedness.
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Section 907.
|
Conformity with Trust Indenture Act.
|
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.
ARTICLE TEN
COVENANTS
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Section 1001.
|
Payment of Principal, Premium, Interest.
|
The Company covenants and agrees for the benefit of the Holders of the Securities of each Series that it will duly and punctually pay the principal of, any premium and interest on the Securities of such
Series, whether payable in cash, shares of Common Stock or other securities or property, in accordance with the terms thereof and this Indenture.
45
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Section 1002.
|
Maintenance of Office or Agency.
|
The Company shall maintain in each Place of Payment for any Series of Securities an Office or Agency where Securities of such Series may be presented or surrendered for payment, where Securities of such
Series may be surrendered for registration of transfer or exchange, where Securities of such Series that are convertible or exchangeable may be surrendered for conversion or exchange, and where notices and demands to or upon the Company in respect
of the Securities of such Series relating thereto and this Indenture may be served, provided that, if (i) the City of Dallas, Texas, is a Place of Payment for the Securities of any Series, (ii) there shall be another Place of Payment in
the United States of America for such Securities in addition to the City of Dallas, Texas, and (iii) all Securities of such Series are originally issued solely in the form of one or more permanent global Securities, then the Company shall not
be required to maintain any such office or agency in the City of Dallas, Texas, unless and until all or any portion of such global Securities shall be exchanged for or otherwise issued as definitive certificated Securities of such Series as
contemplated by the last paragraph of this
Section 1002
. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such Office or Agency. If at any time the Company shall fail to
maintain any such required Office or Agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.
The Company may also
from time to time designate one or more other Offices or Agencies where the Securities of one or more Series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no
such designation or rescission shall in any manner relieve the Company of its obligation to maintain an Office or Agency in each Place of Payment for Securities of any Series for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location of any such other Office or Agency.
Unless
otherwise provided in or pursuant to this Indenture, the Company hereby designates the City of Dallas, Texas, as a Place of Payment for each Series of Securities, initially appoints the Corporate Trust Office of the Trustee in the City of Dallas,
Texas, as the Company’s Office or Agency in the City of Dallas, Texas, for such purpose and initially appoints the Trustee as the Security Registrar for each Series of Securities and, if the Securities of any Series are convertible into or
exchangeable for Common Stock or other securities or property, initially appoints the Trustee as conversion or exchange agent, as the case may be, for the Securities of such Series. The Company may subsequently appoint a different Office or Agency
in the City of Dallas, Texas or the Borough of Manhattan, the City of New York, and, as provided in
Section 305
, may remove and replace from time to time the Security Registrar.
As set forth above in this
Section 1002
, and unless otherwise provided pursuant to
Section 301
with respect to
any Series of Securities, in the event that the Securities of a Series are originally issued solely in the form of one or more permanent global Securities and if at any time thereafter Securities of such Series are issued in definitive certificated
form in exchange for all or any portion of such global Securities (whether pursuant to
Section 305
or otherwise pursuant to the terms of such Securities), the Company shall, at all times from and after the date of the first such exchange
until such time as no Securities of such Series in definitive certificated form are Outstanding, establish and maintain an Office or Agency in the City of Dallas, Texas (in addition to any other Offices or Agencies the Company is required to
maintain in respect of such Securities) where Securities of such Series may be surrendered and where notices and demands in respect of Securities of such Series and this Indenture may be served for the purposes specified in, and as contemplated by,
the first paragraph of this
Section 1002
.
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Section 1003.
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Money for Securities Payments to Be Held in Trust.
|
If the Company shall at any time act as its own Paying Agent with respect to any Series of Securities, it shall, on or before each due date of the principal of, any premium or interest on any of the
Securities of such Series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum in Dollars sufficient to pay the principal, any premium and interest, as the case may be, so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided, and shall promptly notify the Trustee of its action or failure so to act.
46
Whenever the Company shall have one or more Paying Agents for any Series of Securities, it
shall, on or prior to each due date of the principal of, or any premium or interest on, any Securities of such Series, deposit with any Paying Agent a sum in Dollars sufficient to pay the principal, premium and interest, as the case may be, so
becoming due, such sum to be held in trust for the benefit of the Persons entitled thereto, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.
The Company shall cause each Paying Agent for any Series of Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal of, any premium or interest on the Securities of such Series in trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as provided in or pursuant to this Indenture;
(2) give the Trustee notice of
any default by the Company (or any other obligor upon the Securities of such Series) in the making of any payment of principal, any premium or interest on the Securities of such Series; and
(3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
To the extent that the terms of any Securities established pursuant to
Section 301
provide that any principal of, or premium or interest, if any, on any such Securities is or may be payable in Common Stock or other securities or property, then the provisions of this
Section 1003
shall apply,
mutatis mutandis
, to such Common Stock or other securities or property.
The Company may at any time, for the purpose
of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same terms as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such
sums.
Except as otherwise provided herein or pursuant hereto, any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, any premium or interest on any Security of any Series and remaining unclaimed for two years after such principal or such premium or interest shall have become due and payable
shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to
make any such repayment, may, not later than 30 days after the Company’s request for such repayment, at the expense of the Company cause to be published once, in an Authorized Newspaper in each Place of Payment for such Series or to be mailed
to Holders of Securities of such Series, or both, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing nor shall it be earlier than two
years after such principal and any premium or interest shall have become due and payable, any unclaimed balance of such money then remaining will be repaid to the Company.
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Section 1004.
|
Corporate Existence.
|
Subject to
Article Eight
, the Company shall do or cause to be done all things necessary to preserve and keep in full force and
effect (i) the corporate existence of the Company, (ii) the existence (corporate or other) of each Significant Subsidiary of the Company and (iii) the rights (charter and statutory), licenses and franchises of the Company and each of
its Significant Subsidiaries; provided, however, that the Company shall not be required to preserve the existence (corporate or other) of any of its Significant Subsidiaries or any such right, license or franchise of the Company or any of its
Significant Subsidiaries if the Board of Directors of the Company determines that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Significant Subsidiaries taken as a whole and that the loss
thereof will not be disadvantageous in any material respect to the Holders.
47
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Section 1005.
|
Maintenance of Properties.
|
The Company will, and will cause each Significant Subsidiary to, cause all its properties used or useful in the conduct of its business to
be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the
Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company or any Significant Subsidiary from
discontinuing the operation and maintenance of any of their respective properties if such discontinuance is, in the judgment of the Board of Directors of the Company or of any Significant Subsidiary, as the case may be, desirable in the conduct of
its business.
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Section 1006.
|
Waiver of Certain Covenants.
|
The Company may omit in any particular instance to comply with any term, provision or condition set forth in
Section 1002
to
Section 1005
, inclusive, with respect to the Securities
of any Series and, if expressly provided pursuant to
Section 301(13)
, any additional covenants applicable to the Securities of such Series if before the time for such compliance the Holders of at least a majority in principal amount of
the Outstanding Securities of such Series, by Act of such Holders, either shall waive such compliance in such instance or generally shall have waived compliance with such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain
in full force and effect.
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Section 1007.
|
Company Statement as to Compliance.
|
The Company shall deliver to the Trustee, within 180 days after the end of each fiscal year, a written statement (which need not be contained in or accompanied by an Officers’ Certificate) signed by
the principal executive officer, the principal financial officer or the principal accounting officer of the Company, stating whether or not, to the best of his or her knowledge, the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (without regard to notice requirements or periods of grace) and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which he or she may have
knowledge.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
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Section 1101.
|
Applicability of Article.
|
Redemption of Securities of any Series at the option of the Company as permitted or required by the terms of such Securities shall be made
in accordance with the terms of such Securities and (except as otherwise provided herein or pursuant hereto) this Article.
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Section 1102.
|
Election to Redeem; Notice to Trustee.
|
The election of the Company to redeem any Securities shall be evidenced by or pursuant to a Board Resolution. In case of any redemption at the election of the Company of less than all of the Securities of
any Series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of
such Series to be redeemed and, in the event that the Company shall determine that the Securities of any Series to be redeemed shall be selected from Securities of such Series having the same issue date, interest rate or interest rate formula,
Stated Maturity and other terms (the “
Equivalent Terms
”), the Company shall notify the Trustee of such Equivalent Terms.
48
In the case of any redemption of Securities (A) prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture or (B) pursuant to an election of the Company that is subject to a condition specified in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish to the Trustee an Officers’ Certificate evidencing compliance with such restriction or condition.
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Section 1103.
|
Selection by Trustee of Securities to be Redeemed.
|
If less than all of the Securities of any Series are to be redeemed or if less than all of the Securities of any Series with Equivalent Terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the Trustee from the Outstanding Securities of such Series or from the Outstanding Securities of such Series with Equivalent Terms, as the case may be, not previously called for
redemption unless otherwise required by law, by lot or such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions of the principal amount of Securities of such Series; provided,
however, that no such partial redemption shall reduce the portion of the principal amount of a Security of such Series not redeemed to less than the minimum denomination for a Security of such Series established herein or pursuant hereto.
The Trustee shall promptly notify the Company and the Security Registrar (if other than itself) in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed
only in part, to the portion of the principal of such Securities which has been or is to be redeemed.
Unless otherwise
specified in or pursuant to this Indenture or the Securities of any Series, if any Security selected for partial redemption is converted or exchanged for Common Stock or other securities or property in part before termination of the conversion or
exchange right with respect to the portion of the Security so selected, the converted or exchanged portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted or
exchanged during a selection of Securities to be redeemed shall be treated by the Trustee as Outstanding for the purpose of such selection.
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Section 1104.
|
Notice of Redemption.
|
Notice of redemption shall be given in the manner provided in
Section 106
, not less than 30 nor more than 60 days prior to the
Redemption Date, unless a shorter period is specified in the Securities to be redeemed, to the Holders of Securities to be redeemed. Failure to give notice by mailing in the manner herein provided to the Holder of any Securities designated for
redemption as a whole or in part, or any defect in the notice to any such Holder, shall not affect the validity of the proceedings for the redemption of any other Securities or portions thereof.
Any notice that is mailed to the Holder of any Securities in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any
Series are to be redeemed, the identification (and, in the case of partial redemption, the principal amount) of the particular Security or Securities to be redeemed,
(4) that, in case any Security is to be redeemed in part only, on and after the Redemption Date, upon surrender of such Security, the Holder of such Security will receive, without charge, a new Security
or Securities of authorized denominations for the principal amount thereof remaining unredeemed,
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(5) that, on the Redemption Date, the Redemption Price shall become due and payable upon
each such Security or portion thereof to be redeemed, together (if applicable) with accrued and unpaid interest, if any, thereon (subject, if applicable, to the provisos to the first paragraph of
Section 1106
), and, if applicable, that
interest thereon shall cease to accrue on and after said date,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and any accrued interest pertaining thereto,
(7) that the redemption is for a
sinking fund, if such is the case,
(8) in the case of Securities of any Series that are convertible or exchangeable into
Common Stock or other securities or property, the then current conversion or exchange price or rate, the date or dates on which the right to convert or exchange the principal of the Securities of such Series to be redeemed will commence or
terminate, as applicable, and the place or places where and the Persons to whom such Securities may be surrendered for conversion or exchange,
(9) the CUSIP number reference numbers of such Securities, if any (or any other numbers used by a Depositary to identify such Securities), and
(10) if the Redemption Price or any portion thereof shall be payable, at the option of the Company or any Holders, in cash or in Common
Stock or other securities or property (or a combination thereof), a statement as to whether the Company has elected to pay the Redemption Price in cash or Common Stock or other securities or property or a combination thereof and, if applicable, the
portion of the Redemption Price that is to be paid in cash, Common Stock or other securities or property.
A notice of
redemption published as contemplated by
Section 106
need not identify particular Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s
request delivered at least 10 days before the date such notice is to be given (unless a shorter period shall be acceptable to the Trustee), by the Trustee in the name and at the expense of the Company.
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Section 1105.
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Deposit of Redemption Price.
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On or prior to noon (local time in the City of Dallas, Texas) on any Redemption Date, the Company shall deposit, with respect to the Securities of any Series called for redemption pursuant to
Section 1104
, with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003
) an amount of money in Dollars sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date, unless otherwise specified pursuant to
Section 301
for or in the Securities of such Series) any accrued interest on, all such Securities or
portions thereof which are to be redeemed on that date, except that, if the Securities of such Series are convertible or exchangeable into Common Stock or other securities or property, no such deposit shall be required with respect to any such
Securities (or portions thereof) which have been converted or exchanged prior to such Redemption Date.
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Section 1106.
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Securities Payable on Redemption Date.
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Notice of redemption having been given as aforesaid, the Securities so to be redeemed (except, in the case of Securities which are convertible or exchangeable into Common Stock or other securities or
property, any such Securities which shall have been so converted or exchanged prior to the applicable Redemption Date) shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, together with (unless otherwise
provided with respect to the Securities of such Series pursuant to
Section 301
) accrued and unpaid interest, if any, thereon and from and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest, if any) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with, unless
otherwise provided in or pursuant to this Indenture, any accrued and unpaid interest thereon to but excluding the Redemption Date; provided, however, that, except as otherwise specified in or
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pursuant to this Indenture or the Securities of such Series, installments of interest on Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of
such Securities, or one or more Predecessor Securities, registered as such at the close of business on the Regular Record Dates therefor according to their terms and the provisions of
Section 307
.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium, until
paid, shall bear interest from the Redemption Date at the rate prescribed therefor in the Security or, if no rate is prescribed therefor in the Security, at the rate of interest, if any, borne by such Security.
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Section 1107.
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Securities Redeemed in Part.
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Any Security which is to be redeemed only in part shall be surrendered at any Office or Agency for such Security (with, if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of the same Series, containing identical terms and provisions, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for
the unredeemed portion of the principal of the Security so surrendered. If a Security in global form is so surrendered, the Company shall execute, and the Trustee shall authenticate and deliver to the Depositary for such Security in global form as
shall be specified in the Company Order with respect thereto to the Trustee, without service charge, a new Security in global form in a denomination equal to and in exchange for the unredeemed portion of the principal of the Security in global form
so surrendered.
ARTICLE TWELVE
SINKING FUNDS
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Section 1201.
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Applicability of Article.
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The provisions of this
Article Twelve
shall be applicable to any sinking fund for the retirement of Securities of a Series
that by its terms provides for such a sinking fund, except as otherwise permitted or required in or pursuant to this Indenture or any Security of such Series issued pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any Series is herein referred to as a
“mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of such Series is herein referred to as an “optional sinking fund payment.” If provided for by the terms
of Securities of any Series, the cash amount of any sinking fund payment may be subject to reduction as provided in
Section 1202
. Each sinking fund payment shall be applied to the redemption of Securities of any Series as provided for by
the terms of Securities of such Series and this Indenture.
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Section 1202.
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Satisfaction of Sinking Fund Payments with Securities.
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The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of such Securities (1) deliver
Outstanding Securities of such Series (other than any of such Securities previously called for redemption or any of such Securities in respect of which cash shall have been released to the Company) and (2) apply as a credit Securities of such
Series that have been redeemed either at the election of the Company pursuant to the terms of such Series of Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, provided that
such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities of any Series in lieu of cash payments pursuant to this
Section 1202
, the principal amount of Securities of such
Series to be redeemed in order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities of such Series for redemption, except upon Company Request, and such cash payment shall be held by the Trustee or
a Paying Agent and applied to the next succeeding sinking fund payment, provided, however, that the Trustee or such Paying Agent shall at the request of the Company from time to time pay
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over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that Series purchased by the
Company having an unpaid principal amount equal to the cash payment requested to be released to the Company.
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Section 1203.
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Redemption of Securities for Sinking Fund.
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Not less than 75 days prior to each sinking fund payment date for any Series of Securities, the Company shall deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing
mandatory sinking fund payment for that Series pursuant to the terms of that Series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to
Section 1202
, and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers’ Certificate shall specify an optional amount to be added in cash to the next ensuing mandatory sinking fund payment, the Company shall thereupon be obligated to pay the amount therein specified. Not less
than 60 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in
Section 1103
and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided in
Section 1104
. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in
Section 1106
and
Section 1107
.
ARTICLE THIRTEEN
[RESERVED]
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
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Section 1401.
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Purposes for Which Meetings May Be Called.
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A meeting of Holders of Securities of any Series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice,
consent, waiver or other Act provided by this Indenture to be made, given or taken by Holders of Securities of such Series.
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Section 1402.
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Call, Notice and Place of Meetings.
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(1) The Trustee may at any time call a meeting of Holders of Securities of any Series for any purpose specified in
Section 1401
, to be held at such time and at such place in the County of
Dallas, the City of Dallas, Texas. Notice of every meeting of Holders of Securities of any Series, 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 given, in the
manner provided in
Section 106
, not less than 21 nor more than 180 days prior to the date fixed for the meeting.
(2) In case at any time the Company (by or pursuant to a Board Resolution) or the Holders of at least 10% in principal amount of the
Outstanding Securities of any Series shall have requested the Trustee to call a meeting of the Holders of Securities of such Series for any purpose specified in
Section 1401
, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of or made the first publication of the notice of such meeting within 21 days after receipt of such request (whichever shall be required pursuant to
Section 106
) or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of Securities of such Series in the amount above specified, as the case may be, may determine the time and
the place in the County of Dallas, the City of Dallas, Texas, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in clause (1) of this Section.
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Section 1403.
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Persons Entitled to Vote at Meetings.
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To be entitled to vote at any meeting of Holders of Securities of any Series, a Person shall be (1) a Holder of one or more Outstanding Securities of such Series, or (2) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such Series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any
Series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.
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Section 1404.
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Quorum; Action.
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The
Persons entitled to vote a majority in principal amount of the Outstanding Securities of a Series shall constitute a quorum for a meeting or duly reconvened meeting of Holders of Securities of such Series; provided, however, that if any action is to
be taken at such meeting with respect to a consent or waiver which this Indenture expressly provides may be given by the Holders of at least
66-2/3%
in principal amount of the Outstanding Securities of a
Series, the Persons entitled to vote
66-2/3%
in principal amount of the Outstanding Securities of such Series shall constitute a quorum. In the absence of a quorum within 30 minutes after the time appointed
for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such Series, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to
the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1402(1)
, except that such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such Series which shall constitute a
quorum.
Except as limited by the proviso to
Section 902
, any resolution presented to a meeting or adjourned
meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in principal amount of the Outstanding Securities of such Series; provided, however, that, except as limited
by the proviso to
Section 902
, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other Act which this Indenture expressly provides may be made, given or taken by the Holders of at
least
66-2/3%
in principal amount of the Outstanding Securities of a Series may be adopted at a meeting or an adjourned meeting duly convened and at which a quorum is present as aforesaid only by the
affirmative vote of the Holders of at least
66-2/3%
in principal amount of the Outstanding Securities of that Series; and provided, further, that, except as limited by the proviso to
Section 902
,
any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other Act that this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a Series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Securities of such Series.
Any resolution passed or decision taken at any
meeting of Holders of Securities of any Series duly held in accordance with this Section shall be binding on all the Holders of Securities of such Series, whether or not such Holders were present or represented at the meeting.
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Section 1405.
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Determination of Voting Rights; Conduct and Adjournment of Meetings.
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(1) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of such Series in regard to
proof of the holding of Securities of such Series 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 deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in
Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104
. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in
Section 104
or other proof.
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(2) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the
meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in
Section 1402(2)
, in which case the Company or the Holders of Securities of the Series 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 vote of the Persons entitled to vote a majority in principal amount of the Outstanding Securities of such Series
represented at the meeting.
(3) At any meeting, each Holder of a Security of such Series or proxy shall be entitled to one
vote for each $1,000 principal amount of Securities of such Series 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. If the Securities of such Series are issuable in minimum denominations of less than $1,000, then a Holder of such a Security in a principal amount of less than $1,000 shall be entitled to a fraction of one vote
that is equal to the fraction that the principal amount of such Security bears to $1,000. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such Series or proxy.
(4) Any meeting of Holders of Securities of any Series duly called pursuant to
Section 1402
at which a quorum is present may
be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of such Series represented at the meeting; and the meeting may be held as so adjourned without further notice.
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Section 1406.
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Counting Votes and Recording Action of Meetings.
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The vote upon any resolution submitted to any meeting of Holders of Securities of any Series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such
Series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such Series 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, at least in triplicate, of the
proceedings of each meeting of Holders of Securities of any Series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in
Section 1402
and, if applicable,
Section 1404
. Each copy
shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the 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 FIFTEEN
SUBORDINATION OF SECURITIES
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Section 1501.
|
Agreement to Subordinate.
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The Company, for itself, its successors and assigns, covenants and agrees, and each Holder of Securities of any Series by his acceptance
thereof, likewise covenants and agrees, that:
(1) the payment of the principal of (and premium, if any) and interest, if any
(including amounts payable on redemption or repurchase), on, each and all of the Securities of such Series shall be expressly subordinated, to the extent and in the manner provided in the Subordination Provisions established with respect to the
Securities of such Series pursuant to
Section 301(20)
hereof, in right of payment to the prior payment in full of all Senior Indebtedness (as defined for purposes of such Series); and
54
(2) in the event of the insolvency, bankruptcy, receivership, liquidation or other
marshalling of the assets and liabilities of the Company, the holders of Senior Indebtedness (as defined for purposes of a Series of Securities) will be entitled to receive payment in full of all of the principal of, and premium, if any, and accrued
and unpaid interest on, such Senior Indebtedness then outstanding before any Holder of Securities of such Series receives any payment of the principal amount of, or the premium, if any, or interest on, such Securities of such Series.
(Signature page follows)
55
This instrument may be executed in any number of counterparts, each of which so executed
shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written.
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INDEPENDENT BANK GROUP, INC.
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By:
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/s/ David R. Brooks
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Name:
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David R. Brooks
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Title:
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Chairman and Chief Executive Officer
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WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
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By:
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/s/ Patrick Giordano
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Name:
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Patrick Giordano
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Title:
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Vice President
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56
Exhibit 5.1
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1717 Main Street, Suite 3700
Dallas, Texas 75201
214.659.4400
Phone
214.659.4401 Fax
andrewskurth.com
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June 25, 2014
Independent Bank Group, Inc.
1600 Redbud Boulevard, Suite 400
McKinney, Texas 75069-3257
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Re:
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Registration Statement on Form S-3
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Ladies and
Gentlemen:
We are acting as special counsel to Independent Bank Group, Inc., a Texas corporation (the “Company”),
in connection with the preparation and filing of its registration statement on Form S-3 (Registration No. 333-196627) as filed with the Securities and Exchange Commission (the “Registration Statement”). The Registration Statement
relates to the proposed public offering of the following securities of the Company: (i) senior, unsecured debt securities of one or more series (the “Senior Debt Securities”); (ii) subordinated, unsecured debt securities of one
or more series (the “Subordinated Debt Securities”); (iii) shares of one or more series of the preferred stock, par value $0.01 per share, other than Series A Preferred Shares (the “Preferred Shares”); (iv) shares of
common stock, par value $0.01 per share (the “Primary Common Shares”); (v) units of securities consisting of any combination of two or more Primary Securities (as defined below) (the “Units” and, together with the Senior
Debt Securities, the Subordinated Debt Securities, the Preferred Shares and the Primary Common Shares, the “Primary Securities”) to be governed by one or more unit purchase agreements between the Company and a financial institution or
other person identified in each unit purchase agreement as the unit agent thereunder (the “Unit Agent”) and governed by the laws of the State of Texas (the “Unit Purchase Agreements”); (vi) shares of the common stock, par
value $0.01 per share, outstanding on the date hereof (the “Resale Common Shares”); and (vii) up to 23,938.35 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share, which shares are outstanding
on the date hereof (the “Series A Preferred Shares” and together with the Primary Securities and the Resale Common Shares, the “Securities”). The Primary Securities may be offered and sold by the Company from time to time on a
delayed or continuous basis and the Resale Common Shares and the Series A Preferred Shares may be offered and sold by certain selling securityholders (the “Selling Securityholders”) from time to time on a delayed basis, all as set forth in
the prospectus which forms a part of the Registration Statement (the “Prospectus”), and as to be set forth in one or more supplements to the Prospectus (each, a “Prospectus Supplement”). This opinion letter is furnished to you at
your request to enable you to fulfill the requirements of Form S-3 in connection with the Registration Statement.
For
purposes of this opinion letter, we have examined the Registration Statement, including the Prospectus and the exhibits thereto, including a copy of the Senior Debt Indenture, dated June 25, 2014 (the “Senior Debt Indenture”), by and
between the Company and Wells Fargo Bank, National Association, in its capacity as indenture trustee under such indenture (the “Senior Debt Trustee”), and a copy of the Subordinated Debt Indenture, dated June 25, 2014 (the
“Subordinated Debt Indenture” and together with the Senior Debt Indenture, the “Indentures”), by and between the Company and Wells Fargo Bank, National Association, in its
capacity as indenture trustee under such indenture (the “Subordinated Debt Trustee”), the Amended and Restated Certificate of Formation of the Company, as amended by the Certificate of Amendment to the Amended and Restated Certificate of
Formation of the Company (the “Certificate of Formation”); the Third Amended and Restated Bylaws of the Company (the “Bylaws”); the Statement of Designations (the “Series A Preferred Statement of Designations”)
establishing the series of the Senior Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share, of the Company (the “Series A Preferred Series”), certain resolutions of the Board of Directors of the Company, and such
statutes, codes, including the Texas Business Organizations Code, as amended (the “TBOC”), regulations and rules, such corporate records of the Company, and such other agreements, indentures, mortgages, instruments and other documents (the
“Examined Documents”) as we have deemed necessary or appropriate in connection with rendering the opinions hereinafter expressed. In our examination of the Examined Documents, we have assumed, but not verified, the genuineness of all
signatures therein, the legal capacity of all natural persons, the authenticity and completeness of all Examined Documents submitted to us as original documents, and the conformity to the authentic and complete original documents of all Examined
Documents submitted to us as copies. We have relied, without independent investigation or verification of the accuracy or completeness thereof, on a certificate of a public official of the State of Texas and a certificate of the Company as to
certain matters of fact. In addition, we have made such investigations of law as we deemed necessary or appropriate for purposes of expressing the opinions set forth herein.
For purposes of this opinion letter, we have assumed, with your concurrence, with respect to the Securities, that, after the date hereof: (i) each series of Senior Debt Securities of which Senior
Debt Securities are to be offered and sold in reliance on the Registration Statement and issued pursuant to the Senior Debt Indenture and the terms and conditions of the Senior Debt Securities of such series will have been duly established by all
necessary corporate action of the Company in accordance the terms of Senior Debt Indenture prior to the initial offer, issuance and sale of Senior Debt Securities of such series and, at the time of each offer, issuance and sale of Senior Debt
Securities, the Senior Debt Indenture will be in full force and effect and will not have been supplemented or amended except to establish, in accordance with the Senior Debt Indenture, the series of Senior Debt Securities of which Senior Debt
Securities have been previously issued or are then proposed to be issued, and the terms and conditions of the Senior Debt Securities of each such series, and the Senior Debt Indenture will be qualified under the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder (collectively, the “TIA”) at all pertinent times; (ii) each series of Subordinated Debt Securities of which Subordinated Debt Securities to be offered and
sold in reliance on the Registration Statement and issued pursuant to the Subordinated Debt Indenture and the terms and conditions of the Subordinated Debt Securities of such series will have been duly established by all necessary corporate action
of the Company in accordance with the terms of Subordinated Debt Indenture prior to the initial offer, issuance and sale of Subordinated Debt Securities of such series and, at the time of each offer, issuance and sale of Subordinated Debt
Securities, the Subordinated Debt Indenture will be in full force and effect and will not have been supplemented or amended except to establish, in accordance with the Subordinated Debt Indenture, the series of Subordinated Debt Securities of which
Subordinated Debt Securities have been previously issued or are then proposed to be issued and the terms and conditions of the
Subordinated Debt Securities of each such series, and the Subordinated Debt Indenture will be qualified under the TIA at all pertinent times; (iii) each series of the class of preferred
stock, par value $0.01 per share, of the Company (each, a “Preferred Series) of which Preferred Shares are to be offered and sold in reliance on the Registration Statement, and the terms and conditions of the Preferred Shares of such Preferred
Series will be duly established by all necessary corporate action of the Company and a statement of designations setting forth the terms of such Preferred Series duly executed by the Company shall have been filed with, and accepted for record by,
the Secretary of State of the State of Texas in accordance with the requirements of the TBOC and, at the time of each offer, issuance and sale of Preferred Shares of such Preferred Series, such statement of designations will remain in full effect
and not have been amended, modified or supplemented in any manner adversely affecting the rights of the holders of Preferred Shares or the power and authority of the Company to issue Preferred Shares of such Preferred Series; (iv) the number of
Preferred Shares of a Preferred Series to be at any one time issued and sold plus the number of Preferred Shares of that Preferred Series issued and outstanding immediately prior to such issuance will not exceed the maximum number of Preferred
Shares of that Preferred Series that are authorized for issuance as specified in the statement of designations relating to that Preferred Series, and the number of Preferred Shares to be at any one time issued and sold plus the number of Preferred
Shares of all Preferred Series issued and outstanding immediately prior to such issuance will not exceed the number of shares of the class of preferred stock, par value $0.01 per share, of the Company then authorized for issuance; (v) the
number of Primary Common Shares to be issued and sold at any one time plus the number of shares of the common stock, par value $0.01 per share, of the Company (the “Common Stock”) issued and outstanding immediately prior to such issuance
will not exceed the number of shares of the Common Stock then authorized for issuance; (vi) Units to be offered and sold will be governed by a valid and binding Unit Purchase Agreement; (vii) the Certificate of Formation will remain in
force and effect and not be amended, modified or supplemented in any respect except by the filing of one or more statements of designations to establish one or more Preferred Series in addition to the Series A Preferred Series; and (vii) the
Series A Preferred Statement of Designations will remain in force and effect and not be amended, modified or supplemented in any respect.
For purposes of this opinion letter, we have also assumed, with your concurrence, that, after the date hereof: (i) the issuance, sale and amount of any Securities of the Company to be offered, issued
and sold by the Company from time to time in reliance on the Registration Statement and the terms on which such Securities are to be offered and sold and the Company’s entry into, execution and delivery of, and performance of its obligations
under, each supplement indenture to an Indenture, each underwriting agreement, purchase agreement and similar agreement relating to such an offer and sale of any Securities of the Company, and, with respect to any Units to be offered, issued and
sold, each Unit Purchase Agreement: (a) will have been duly authorized by all necessary action of the board of directors of the Company (the “Board of Directors”), a duly authorized committee of the Board of Directors (“Board
Action”) or officers of the Company acting pursuant to authority delegated to them by the Board of Directors, consistent, in each case, with the procedures and terms described in the Registration Statement and applicable Prospectus Supplement
and in accordance with the Certificate of Formation, the Bylaws, and with respect to the Senior Debt Securities, the Senior Debt Indenture, as amended and supplemented from time to time, and, with respect to Subordinated Debt Securities, the
Subordinated Debt Indenture, as amended and supplemented from time to time, and, with respect to Units, the applicable Unit Purchase Agreement, as amended from time to time, and applicable
law, each of which Board Actions shall remain in full force and effect at all pertinent times, and (b) will not violate any applicable law, government or court-imposed order or restriction
or agreement or instrument then binding on the Company or otherwise impair the legal or binding nature of the obligations represented by the applicable Securities; (ii) at the time of offer, issuance and sale of any Securities in reliance on
the Registration Statement, the Registration Statement (including all post-effective amendments thereto) will have been declared or become effective under the Securities Act of 1933, as amended (the “Securities Act”), and no stop order
suspending its effectiveness will have been issued and remain in effect; (iii) a Prospectus Supplement describing the Securities being offered, issued and sold at any one time and, if any Selling Securityholder will be offering Securities for
resale pursuant to such Prospectus Supplement, identifying each such Selling Securityholders and the Securities being sold by each such Selling Securityholders, will have been timely filed with the Commission in accordance with the Securities Act;
(iv) the Securities will be offered, issued and sold in compliance with all applicable U.S. federal and state securities laws, and in the manner described in the Registration Statement and the applicable Prospectus Supplement; (v) none of
the terms of any Securities to be established after the date hereof, and neither the issuance, sale or delivery of such Securities nor the compliance by the Company with the terms of such Securities, will violate any applicable law or will result in
the violation of any provision of any agreement, contract, indenture, mortgage or other instrument then binding on the Company or any of its assets and will not violate any restriction then imposed on the Company by a court or any governmental
agency, commission, department or other body then having jurisdiction over the Company; (vi) if being sold by the Company, the Securities will be issued and delivered against payment of valid consideration therefor and in accordance with the
terms of the applicable Board Action authorizing such sale and any applicable underwriting agreement, purchase agreement or similar agreement, as contemplated by one or both of the Registration Statement and the applicable Prospectus Supplement;
(vii) if sold by a Selling Securityholder, the Securities being sold by such Selling Securityholder will be delivered against payment of valid consideration therefor and in accordance with the applicable action of the governing authority, if
any, of such Selling Securityholder and in the manner described in any applicable purchase agreement and the applicable Prospectus Supplement, (xii) the Company will remain a validly existing Texas corporation at the time of each sale of
Securities hereunder; and (xiii) the sum of the aggregate price to the public of the Securities to be offered and sold in reliance on the Registration Statement at any one time and the aggregate price to the public of all other Securities
previously sold in reliance on the Registration Statement shall not exceed the aggregate amount of the Securities registered pursuant to the Registration Statement.
To the extent that the obligations of the Company with respect to the Securities may be dependent upon such matters, we have assumed, for purposes of this opinion and with your concurrence, that: the
Senior Debt Trustee and the Subordinated Debt Trustee were and will be, and the Unit Agents will be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization at all pertinent times; the Senior Debt
Trustee and the Subordinated Debt Trustee had and will have, and each Unit Agent will have, at all pertinent times, all necessary organizational and legal power and authority, and be duly qualified, to execute and deliver the Senior Debt Indenture,
the Subordinated Debt Indenture or Unit Purchase Agreement, as applicable, to perform and discharge its duties and obligations thereunder and to engage in the activities contemplated by the Senior Debt Indenture, the Subordinated Debt Indenture or
such Unit Purchase Agreement, as applicable; each of the Senior Debt Indenture
and the Subordinated Debt Indenture has been, and each supplement indenture to an Indenture and each Unit Purchase Agreement will be, duly authorized, executed and delivered by the Senior Debt
Trustee, the Subordinated Debt Trustee or the Unit Agent, as applicable, and at all pertinent times, the Senior Debt Indenture, the Subordinated Debt Indenture and each Unit Purchase Agreement will constitute the legal, valid and binding obligations
of the Senior Debt Trustee, the Subordinated Debt Trustee or the Unit Agent, as applicable, enforceable against such person in accordance with its terms; and the Senior Debt Trustee, the Subordinated Debt Trustee and each Unit Agent will be in
compliance with respect to the performance of its obligations under the Senior Debt Indenture, the Subordinated Debt Indenture or Unit Purchase Agreement, as applicable, at all pertinent times.
The opinions expressed herein are based on and limited to the laws of the State of Texas (but not including any laws, statutes, codes,
ordinances, administrative decisions, rules or regulations of any political subdivision below the state level) and the federal laws of the United States of America. We express no opinion herein as to any other laws, statutes, codes, ordinances,
rules or regulations of any other jurisdiction (and in particular, we express no opinion as to any effect that such other laws, statutes, codes, ordinances, rules or regulations may have on the opinions expressed herein). For purposes of this
opinion, we assume the Securities were, or will be, issued in compliance with all applicable state securities or blue sky laws.
Based upon the foregoing and subject to the assumptions, qualifications and limitations set forth herein, and having due regard for such
legal considerations as we deem relevant, we are of the opinion that:
(a) With respect to Senior Debt Securities to be offered
and sold in reliance on the Registration Statement, upon due execution and delivery by and on behalf of the Company, and authentication by the Trustee, of such Senior Debt Securities in accordance with the Senior Debt Indenture and any supplemental
indenture and other documents executed pursuant to and in accordance with the Senior Debt Indenture and relating to the series of Senior Debt Securities of which the Senior Debt Securities being offered and sold are a part, such Senior Debt
Securities will, upon issuance, constitute valid and binding obligations of the Company and will be entitled to the benefits of the Senior Debt Indenture as supplemented and amended through the date of the issuance of such Senior Debt Securities.
(b) With respect to Subordinated Debt Securities to be offered and sold in reliance on the Registration Statement, including
as a part of any Units being issued and sold, upon due execution and delivery by and on behalf of the Company, and authentication by the Trustee, of such Subordinated Debt Securities in accordance with the Subordinated Debt Indenture and any
supplemental indenture and other documents executed pursuant to and in accordance with the Subordinated Debt Indenture and relating to the series of Subordinated Debt Securities of which the Subordinated Debt Securities being offered and sold are a
part, such Subordinated Debt Securities will, upon issuance, constitute valid and binding obligations of the Company and will be entitled to the benefits of the Subordinated Debt Indenture as supplemented and amended through the date of the issuance
of such Subordinated Debt Securities.
(c) With respect to Preferred Shares to be offered and sold in reliance on the Registration
Statement, such Preferred Shares, upon due execution and delivery on behalf of the Company of certificates therefor or upon credit of such Preferred Shares in the Direct Registration System of the Depository Trust Company (“DTC”), will be
validly issued, fully paid and nonassessable.
(d) With respect to Primary Common Shares to be offered and sold in reliance on
the Registration Statement, such Primary Common Shares (including any Primary Common Shares duly issued upon the exchange or conversion of Subordinated Debt Securities or Preferred Shares that are exchangeable for or convertible into Common Shares),
upon due execution and delivery on behalf of the Company of certificates therefor or upon credit of such Primary Common Shares in the Direct Registration System of DTC, will be validly issued, fully paid and nonassessable.
(e) With respect to Units to be offered and sold in reliance on the Registration Statement: (i) upon, in the case of Senior Debt
Securities being part of the Units, upon due execution and delivery by and on behalf of the Company, and authentication by the Senior Debt Trustee, of such Senior Debt Securities in accordance with the Senior Debt Indenture and any supplemental
indenture and other documents executed pursuant to and in accordance with the Senior Debt Indenture and relating to the series of Senior Debt Securities of which the Senior Debt Securities being offered and sold are a part, such Senior Debt
Securities will, upon issuance, constitute valid and binding obligations of the Company; (ii) upon, in the case of Subordinated Debt Securities being part of the Units, upon due execution and delivery by and on behalf of the Company, and
authentication by the Subordinated Debt Trustee, of such Subordinated Debt Securities in accordance with the Subordinated Debt Indenture and any supplemental indenture and other documents executed pursuant to and in accordance with the Subordinated
Debt Indenture and relating to the series of Subordinated Debt Securities of which the Subordinated Debt Securities being offered and sold are a part, such Subordinated Debt Securities will, upon issuance, constitute valid and binding obligations of
the Company; (iii), in the case of Preferred Shares being part of the Units, such Preferred Shares, upon due execution and delivery on behalf of the Company of certificates therefor or upon credit of such Preferred Shares in the Direct Registration
System of DTC, will be validly issued, fully paid and nonassessable; and (iv) in the case of Primary Common Shares being part of the Units, such Primary Common Shares, upon due execution and delivery on behalf of the Company of certificates
therefor or upon credit of such Primary Common Shares in the Direct Registration System of DTC, will be validly issued, fully paid and nonassessable.
(f) The Resale Common Shares and the Series A Preferred Shares that may be sold by the Selling Securityholders in reliance on the Registration Statement are validly issued, fully paid and nonassessable.
The opinions expressed in Paragraphs (a), (b) and (e) above with respect to the valid and binding nature of
obligations may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws affecting creditors’ rights (including, without limitation, the effect of statutory and other law regarding fraudulent conveyances,
fraudulent transfers and preferential transfers) and by the exercise of judicial discretion and the application of principles of equity, good faith, fair dealing, reasonableness, conscionability and materiality (regardless of whether the Securities
are considered in a proceeding in equity or at law).
This opinion letter has been prepared for use in connection with the Registration Statement.
The opinion may be relied upon exclusively by you and not by any other person without our prior written consent. Our opinions are expressed as of the date hereof. We assume no obligation to update or supplement this opinion letter to reflect any
change in fact, circumstance or law or to advise you of any changes in the foregoing subsequent to the date hereof.
We hereby
consent to the filing by you of this opinion letter as Exhibit 5.1 to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the prospectus constituting a part of the Registration Statement. In
giving this consent, we do not thereby admit that we are an “expert” within the meaning of the Securities Act, whose consent is required under Section 7 of the Securities Act and the rules and regulations of the SEC promulgated
thereunder.
Very truly yours,
/s/ Andrews Kurth LLP
Exhibit 10.13
EXECUTION COPY
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
INDEPENDENT BANK GROUP, INC.
MCKINNEY, TEXAS
AND
HOUSTON CITY BANCSHARES, INC.
HOUSTON, TEXAS
Dated as of June 2, 2014
TABLE OF CONTENTS
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Page
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ARTICLE I ACQUISITION OF HCBI BY IBG
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2
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Section 1.01.
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Merger of HCBI with and into Newco
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2
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Section 1.02.
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Effects of the Merger
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2
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Section 1.03.
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Certificate of Formation and Bylaws
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2
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Section 1.04.
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Directors and Officers
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2
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Section 1.05.
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Merger Consideration
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2
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Section 1.06.
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Treatment of Newco Shares
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3
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Section 1.07.
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Dissenting Shareholders
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4
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Section 1.08.
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SEC Filing and Shareholder Approval
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4
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Section 1.09.
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Exchange Procedures
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5
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Section 1.10.
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Effective Time
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7
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Section 1.11.
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Subsequent Merger and Bank Merger
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7
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Section 1.12.
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Anti-Dilution Provisions
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7
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Section 1.13.
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Tax Matters
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8
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ARTICLE II THE CLOSING AND THE CLOSING DATE
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9
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Section 2.01.
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Time and Place of the Closing and Closing Date
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9
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Section 2.02.
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Actions to be Taken at the Closing by HCBI
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10
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Section 2.03.
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Actions to be Taken at the Closing by IBG
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11
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Section 2.04.
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Further Assurances
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13
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF HCBI
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13
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Section 3.01.
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Organization and Ownership
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13
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Section 3.02.
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Execution and Delivery
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13
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Section 3.03.
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HCBI Capitalization
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14
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Section 3.04.
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HCB
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14
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Section 3.05.
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No Violation
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15
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Section 3.06.
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Compliance with Laws, Permits and Instruments
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15
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Section 3.07.
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Financial Statements
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16
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Section 3.08.
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Litigation
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16
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Section 3.09.
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Consents and Approvals
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16
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Section 3.10.
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Undisclosed Liabilities
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17
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Section 3.11.
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Title to Tangible Assets
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17
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Section 3.12.
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Absence of Certain Changes or Events
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17
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Section 3.13.
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Leases, Contracts and Agreements
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19
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Section 3.14.
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Taxes and Tax Returns
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20
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Section 3.15.
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Insurance
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22
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Section 3.16.
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No Material Adverse Change
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22
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Section 3.17.
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Proprietary Rights
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22
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Section 3.18.
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Transactions with Certain Persons and Entities
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23
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Section 3.19.
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Evidences of Indebtedness
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23
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Section 3.20.
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Employee Relationships
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23
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Section 3.21.
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Condition of Assets
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23
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Section 3.22.
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Environmental Compliance
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24
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i
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Section 3.23.
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Regulatory Compliance
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24
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Section 3.24.
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Absence of Certain Business Practices
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25
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Section 3.25.
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Books and Records
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25
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Section 3.26.
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Forms of Instruments, Etc.
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25
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Section 3.27.
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Fiduciary Responsibilities
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25
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Section 3.28.
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Guaranties
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25
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Section 3.29.
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Employee Benefit Plans
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25
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Section 3.30.
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No Excess Parachute Payments
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27
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Section 3.31.
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Bank Secrecy Act, Foreign Corrupt Practices Act and U.S.A. Patriot Act
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27
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Section 3.32.
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Data Processing Agreements
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28
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Section 3.33.
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Dissenting Shareholders
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28
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Section 3.34.
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Fair Housing Act, Home Mortgage Disclosure Act and Equal Credit Opportunity Act and Flood Disaster Protection
Act
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28
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Section 3.35.
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Usury Laws and Other Consumer Compliance Laws
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28
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Section 3.36.
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Zoning and Related Laws
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28
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Section 3.37.
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Business Combination
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28
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Section 3.38.
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Representations Not Misleading
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28
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF IBG
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29
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Section 4.01.
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Organization
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29
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Section 4.02.
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Execution and Delivery
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29
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Section 4.03.
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IBG Capitalization
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29
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Section 4.04.
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Independent Bank
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30
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Section 4.05.
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Authorized and Outstanding Shares of Newco
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31
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Section 4.06.
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Compliance with Laws, Permits and Instruments
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31
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Section 4.07.
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Consents and Approvals
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31
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Section 4.08.
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Regulatory Approval; Call Reports
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31
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Section 4.09.
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Undisclosed Liabilities
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32
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Section 4.10.
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No Violation
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32
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Section 4.11.
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Litigation
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32
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Section 4.12.
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SEC Filings; Financial Statements; Internal Controls
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32
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Section 4.13.
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Taxes and Tax Returns
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34
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Section 4.14.
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Compensation and Benefit Plans
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34
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Section 4.15.
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Bank Secrecy Act, Foreign Corrupt Practices Act and U.S.A. Patriot Act
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34
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Section 4.16.
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No Material Adverse Change
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35
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Section 4.17.
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Financing
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35
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Section 4.18.
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Representations Not Misleading
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35
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ARTICLE V COVENANTS OF HCBI
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35
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Section 5.01.
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Commercially Reasonable Efforts
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35
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Section 5.02.
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Information for Regulatory Applications and Registration Statement
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35
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Section 5.03.
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Affirmative Covenants
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36
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Section 5.04.
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Negative Covenants
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37
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ii
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Section 5.05.
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Access; Pre Closing Investigation
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40
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Section 5.06.
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Invitations to and Attendance at Directors’ and Committee Meetings
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40
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Section 5.07.
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Additional Financial Statements
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41
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Section 5.08.
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Untrue Representations
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41
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Section 5.09.
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Litigation and Claims
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41
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Section 5.10.
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Adverse Changes
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41
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Section 5.11.
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No Negotiation with Others
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41
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Section 5.12.
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Consents and Approvals
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42
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Section 5.13.
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Environmental Investigation; Right to Terminate Agreement
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42
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Section 5.14.
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Employee Plans
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44
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Section 5.15.
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Disclosure Schedules
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44
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Section 5.16.
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Voting Agreement
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44
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Section 5.17.
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Releases
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44
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Section 5.18.
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Other Agreements
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44
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Section 5.19.
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Support Agreements
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44
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Section 5.20.
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Shareholder Lists
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44
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Section 5.21.
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Conforming Accounting Adjustments
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45
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Section 5.22.
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D & O Liability Insurance
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45
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Section 5.23.
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Employment Agreement
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45
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Section 5.24.
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Liquidation of Subsidiary
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45
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ARTICLE VI COVENANTS OF IBG
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45
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Section 6.01.
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Commercially Reasonable Efforts
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45
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Section 6.02.
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Untrue Representations
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45
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Section 6.03.
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Affirmative Covenants
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45
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Section 6.04.
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Registration Statement
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46
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Section 6.05.
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NASDAQ Listing
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46
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Section 6.06.
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Litigation and Claims
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47
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Section 6.07.
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Regulatory and Other Approvals
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47
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Section 6.08.
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Formation and Organization of Newco
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47
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Section 6.09.
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Other Agreements
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47
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Section 6.10.
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Employee Matters
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47
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Section 6.11.
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Adverse Changes
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48
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Section 6.12.
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Disclosure Schedules
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48
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Section 6.13.
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Issuance of IBG Common Shares
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48
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Section 6.14.
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Access to Properties and Records
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48
|
|
|
Section 6.15.
|
|
Director and Officer Indemnification
|
|
|
48
|
|
|
|
|
|
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF HCBI
|
|
|
49
|
|
|
Section 7.01.
|
|
Representations and Warranties
|
|
|
49
|
|
|
Section 7.02.
|
|
Performance of Obligations
|
|
|
49
|
|
|
Section 7.03.
|
|
Government and Other Approvals
|
|
|
49
|
|
|
Section 7.04.
|
|
No Litigation
|
|
|
49
|
|
|
Section 7.05.
|
|
Delivery of Closing Documents
|
|
|
50
|
|
|
Section 7.06.
|
|
Shareholder Approvals
|
|
|
50
|
|
iii
|
|
|
|
|
|
|
|
|
Section 7.07.
|
|
Registration Statement
|
|
|
50
|
|
|
Section 7.08.
|
|
Listing of IBG Shares
|
|
|
50
|
|
|
Section 7.09.
|
|
No Material Adverse Change
|
|
|
50
|
|
|
Section 7.10.
|
|
Delivery of Merger Consideration
|
|
|
50
|
|
|
Section 7.11.
|
|
Average Closing Price
|
|
|
50
|
|
|
Section 7.12.
|
|
Tax Opinion
|
|
|
50
|
|
|
|
|
|
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF IBG
|
|
|
50
|
|
|
Section 8.01.
|
|
Representations and Warranties
|
|
|
50
|
|
|
Section 8.02.
|
|
Performance of Obligations
|
|
|
51
|
|
|
Section 8.03.
|
|
Delivery of Closing Documents
|
|
|
51
|
|
|
Section 8.04.
|
|
Government and Other Approvals
|
|
|
51
|
|
|
Section 8.05.
|
|
No Litigation
|
|
|
51
|
|
|
Section 8.06.
|
|
No Material Adverse Change
|
|
|
52
|
|
|
Section 8.07.
|
|
Minimum Tangible Book Value
|
|
|
52
|
|
|
Section 8.08.
|
|
Minimum ALLL
|
|
|
53
|
|
|
Section 8.09.
|
|
Shareholder Approvals
|
|
|
53
|
|
|
Section 8.10.
|
|
Termination of Employee Benefit Plans
|
|
|
53
|
|
|
Section 8.11.
|
|
Releases, Support Agreements, and Resignations
|
|
|
53
|
|
|
Section 8.12.
|
|
Registration Statement
|
|
|
53
|
|
|
Section 8.13.
|
|
Listing
|
|
|
53
|
|
|
Section 8.14.
|
|
Employment Agreements
|
|
|
53
|
|
|
Section 8.15.
|
|
Tax Opinion
|
|
|
53
|
|
|
Section 8.16.
|
|
Average Closing Price
|
|
|
54
|
|
|
Section 8.17.
|
|
Liquidation of Subsidiary
|
|
|
54
|
|
|
|
|
|
ARTICLE IX TERMINATION AND ABANDONMENT
|
|
|
54
|
|
|
Section 9.01.
|
|
Right of Termination
|
|
|
54
|
|
|
Section 9.02.
|
|
Notice of Termination
|
|
|
55
|
|
|
Section 9.03.
|
|
Effect of Termination
|
|
|
55
|
|
|
Section 9.04.
|
|
HCB Termination Fee
|
|
|
55
|
|
|
|
|
|
ARTICLE X CONFIDENTIAL INFORMATION
|
|
|
57
|
|
|
Section 10.01.
|
|
Definition of “Recipient,” “Disclosing Party” and “Representative”
|
|
|
57
|
|
|
Section 10.02.
|
|
Definition of “Subject Information”
|
|
|
57
|
|
|
Section 10.03.
|
|
Confidentiality
|
|
|
57
|
|
|
Section 10.04.
|
|
Securities Law Concerns
|
|
|
58
|
|
|
Section 10.05.
|
|
Return of Subject Information
|
|
|
58
|
|
|
|
|
|
ARTICLE XI MISCELLANEOUS
|
|
|
58
|
|
|
Section 11.01.
|
|
No Survival of Representations and Warranties
|
|
|
58
|
|
|
Section 11.02.
|
|
Expenses
|
|
|
58
|
|
|
Section 11.03.
|
|
Brokerage Fees and Commissions
|
|
|
58
|
|
|
Section 11.04.
|
|
Entire Agreement
|
|
|
59
|
|
|
Section 11.05.
|
|
Further Cooperation
|
|
|
59
|
|
iv
|
|
|
|
|
|
|
|
|
Section 11.06.
|
|
Severability
|
|
|
59
|
|
|
Section 11.07.
|
|
Notices
|
|
|
60
|
|
|
Section 11.08.
|
|
GOVERNING LAW; VENUE
|
|
|
60
|
|
|
Section 11.09.
|
|
Multiple Counterparts; Electronic Transmission
|
|
|
61
|
|
|
Section 11.10.
|
|
Certain Definitions
|
|
|
61
|
|
|
Section 11.11.
|
|
Specific Performance
|
|
|
62
|
|
|
Section 11.12.
|
|
Attorneys’ Fees and Costs
|
|
|
62
|
|
|
Section 11.13.
|
|
Rules of Construction
|
|
|
63
|
|
|
Section 11.14.
|
|
Binding Effect; Assignment
|
|
|
63
|
|
|
Section 11.15.
|
|
Public Disclosure
|
|
|
63
|
|
|
Section 11.16.
|
|
Extension; Waiver
|
|
|
64
|
|
|
Section 11.17.
|
|
Amendments
|
|
|
64
|
|
EXHIBITS
|
|
|
|
|
EXHIBIT A:
|
|
Agreement and Plan of Merger
|
|
EXHIBIT B:
|
|
Voting Agreement
|
|
EXHIBIT C:
|
|
Release Agreements
|
|
EXHIBIT D:
|
|
Support Agreement
|
v
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (“
Agreement
”) is made and entered into as of the 2nd day of June, 2014, by and
between INDEPENDENT BANK GROUP, INC., a Texas corporation and registered bank holding company with its principal offices in McKinney, Texas (“
IBG
”), and HOUSTON CITY BANCSHARES, INC., a Texas corporation and registered bank holding
company with its principal offices in Houston, Texas (“
HCBI
”).
RECITALS:
WHEREAS, HCBI owns all of the capital stock of HCB Nevada, Inc., a Nevada corporation and registered bank holding company with its
principal offices in Carson City, Nevada (“HCB Nevada”), and HCB Nevada owns all of the capital stock of Houston Community Bank, N.A., a national banking association with its principal office in Houston, Texas (“HCB”);
WHEREAS, IBG desires to acquire all of the issued and outstanding common shares of HCBI (the “
HCBI Shares
”)
through the merger (the “
Merger
”) of IBGHCB ACQUISITION CORPORATION, a Texas corporation and wholly owned subsidiary of IBG (“
Newco
”) with and into HCBI, with HCBI continuing as the corporation surviving the Merger,
pursuant to which holders of HCBI Shares will be entitled to receive cash and common shares of IBG (the “
IBG Shares
”) as provided for herein;
WHEREAS, IBG and HCBI believe that the Merger, as provided for and subject to the terms and conditions set forth in this Agreement and all exhibits, schedules and supplements hereto, is in the best
interests of IBG and HCBI and their respective shareholders;
WHEREAS, after to the Merger, IBG will effect the merger of HCBI
into IBG, with IBG continuing as the surviving corporation (the “
Subsequent Merger
”), and the merger of Houston Community Bank, N.A. with and into Independent Bank, McKinney, Texas, a Texas banking association and a wholly-owned
subsidiary of IBG (“
Independent Bank
”), with Independent Bank continuing as the surviving bank (the “
Bank Merger
”);
WHEREAS, the parties intend that: (i) the Merger and the Subsequent Merger, together, qualify as a reorganization within the meaning of § 368(a) of the Internal Revenue Code of 1986, as
amended (the “
Code
”) and the rules and regulations promulgated thereunder, (ii) the Bank Merger qualify as a reorganization within the meaning of § 368(a) of the Code and the rules and regulations promulgated thereunder,
and (iii) this Agreement constitutes a plan of reorganization within the meaning of § 368 of the Code and the applicable regulations;
WHEREAS, to induce IBG to enter into this Agreement, certain shareholders of HCBI have agreed to execute and deliver to IBG a Voting Agreement pursuant to which these shareholders agree to vote their HCBI
Shares in favor of the Merger;
WHEREAS, IBG and HCBI desire to set forth certain representations, warranties and covenants
made by each to the other as an inducement to the execution and delivery of this Agreement and certain additional agreements related to the transactions contemplated hereby; and
WHEREAS, the respective boards of directors of IBG and HCBI have approved this Agreement and
the proposed transactions substantially on the terms and conditions set forth in this Agreement.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual representations, warranties, covenants and agreements
contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be bound hereby, the parties hereby agree as follows:
ARTICLE I
ACQUISITION OF HCBI BY IBG
Section 1.01.
Merger of HCBI with and into Newco
. Subject to the terms and conditions of this Agreement and the Agreement and Plan of Merger to be entered into between HCBI and Newco, and
joined in by IBG (the “
Merger Agreement
”), in the form attached hereto as
Exhibit “A”
, Newco will merge with and into HCBI pursuant to the provisions of Chapter 10 of the Texas Business Organizations Code (the
“
TBOC
”).
Section 1.02.
Effects of the Merger
. HCBI shall continue as the corporation resulting
from the Merger (the “
Resulting Corporation
”), and the Merger shall otherwise have the effects set forth in Section 10.008 of the TBOC and as set forth in the Merger Agreement.
Section 1.03.
Certificate of Formation and Bylaws
. The Certificate of Formation and Bylaws of the Resulting Corporation shall
be as set forth in the Merger Agreement.
Section 1.04.
Directors and Officers
. The directors and officers of the
Resulting Corporation shall be as set forth in the Merger Agreement.
Section 1.05.
Merger Consideration
. At the
Effective Time (as defined in Section 1.09) by virtue of this Agreement and without any further action on the part of any holder, all of the HCBI Shares outstanding at the Effective Time shall, subject to adjustment pursuant to
Section 8.07, be converted into the right to receive the consideration set forth in this Section 1.05 as follows.
A. Any HCBI Shares that are owned by HCBI (other than as a fiduciary) shall automatically be canceled and retired and all rights with
respect thereto shall cease to exist, and no consideration shall be delivered in exchange therefor.
B. Subject to
Section 1.05(C), each HCBI Share issued and outstanding immediately before the Effective Time (excluding HCBI Shares cancelled pursuant to Section 1.05(A)) shall be converted into, and shall be canceled in exchange for, the right to
receive each of the following:
(1) A cash amount equal to $30.44 (the “
Per Share Cash
Consideration
”) subject to adjustment pursuant to Section 8.07;
2
(2) A number of shares of IBG Stock equal to the quotient of
(i) $56.52,
divided by
(ii) the Average Closing Price (the “
Per Share Stock Consideration
”). The “
Average Closing Price
” shall be the average, determined to one-one hundredth of one cent, of the
volume weighted sale price per IBG Share on The NASDAQ Stock Market, Inc. Global Select Market System (“NASDAQ”) for ten (10) consecutive trading days ending on and including the third trading day preceding the Closing Date, as
reported by Bloomberg;
(3) If the Average Closing Price is less than 90% of the Average Announcement Price,
IBG may in its sole discretion elect to: (a) increase the Per Share Cash Consideration to an amount up to $43.48 (the “Increased Per Share Cash Consideration”), subject to adjustment pursuant to Section 8.07; and (b) reduce
the Per Share Stock Consideration to a number of shares of IBG Stock equal to the quotient of (x) the difference between $86.96 and the Increased Per Share Cash Consideration; divided by (y) the Average Closing Price. The “
Average
Announcement Price
” is $47.1770; and
(4) Notwithstanding anything in this Agreement to the contrary,
IBG will not issue any certificates or scrip representing fractional IBG Shares otherwise issuable pursuant to the Merger. In lieu of the issuance of any such fractional shares, IBG shall pay to each former holder of HCBI Shares otherwise entitled
to receive such fractional share an amount of cash determined by multiplying (i) the Average Closing Price by (ii) the fraction of an IBG Share which such holder would otherwise be entitled to receive pursuant to this Section 1.05.
For purposes of illustration only, calculation of the Per Share Stock Consideration pursuant to subsection (B)(2) above based
on different hypothetical Average Closing Prices is set forth in
Confidential Schedule 1.05.
C. Subject only to
dissenter’s rights under Subchapter H of Chapter 10 of the TBOC, all HCBI Shares shall no longer be outstanding and shall be cancelled and retired and all rights with respect thereto shall cease to exist, and each holder of HCBI Shares shall
cease to have any rights with respect thereto, except the right to receive the consideration provided for in this Section 1.05.
D. If the Tangible Book Value (as defined in Section 8.07) on the fifth business day preceding the Closing Date (as defined in Section 2.01) (the “Calculation Date”) is greater than
$24,000,000, then on the day prior to the Closing Date, HCBI may distribute to its shareholders an amount equal to the difference between (i) the actual amount of Tangible Book Value as of the Calculation Date,
less
(ii) $24,000,000. Any such distribution is referred to as the “Section 1.05(D) Distribution.”
Section 1.06.
Treatment of Newco Shares
. Each Newco Share (as defined in Section 4.05) issued and outstanding
immediately before the Effective Time shall, on and after the Effective Time, be converted into a like number of shares of the Resulting Corporation with the effect that the aggregate number of common shares of the Resulting Corporation outstanding
after the Effective Time shall be equal to the aggregate number of Newco Shares outstanding
3
immediately before the Effective Time, all of which shall continue to be owned by IBG. The authorized number of common shares of the Resulting Corporation shall be the same as the authorized
number of Newco Shares immediately before the Effective Time.
Section 1.07.
Dissenting Shareholders
.
Notwithstanding anything in this Agreement to the contrary, HCBI Shares that are held by shareholders of HCBI who have complied with the terms and provisions of Subchapter H of Chapter 10 of the TBOC (each a “
Dissenting
Shareholder
”) shall be entitled to those rights and remedies set forth in Subchapter H of Chapter 10 of the TBOC; but if that a shareholder of HCBI fails to perfect, withdraws or otherwise loses any such right or remedy granted by the
Subchapter H of Chapter 10 of the TBOC, each HCBI Share held by such shareholder shall be converted into and represent only the right to receive the consideration as specified in Section 1.05.
Section 1.08.
SEC Filing and Shareholder Approval
.
A. IBG shall prepare a registration statement on Form S-4 or other applicable form (the “
Registration Statement
”) to be filed by IBG with the Securities and Exchange Commission
(“
SEC
”) in connection with the issuance of the IBG Shares to the HCBI Shareholders pursuant to Section 1.05 (including the Proxy Statement for the Meeting (as defined below) and prospectus and other proxy solicitation materials
of HCBI constituting a part thereof (together, the “
Proxy Statement
”) and all related documents). HCBI shall prepare and furnish to IBG such information relating to HCBI and its directors, officers and shareholders as may be
reasonably required to comply with SEC rules and regulations in connection with the Registration Statement. IBG shall provide HCBI, and its legal, financial and accounting advisors, the right to review and provide comments upon (i) the
Registration Statement in advance of such Registration Statement being filed with the SEC and (ii) on all amendments and supplements to the Registration Statement and all responses to requests for additional information and replies to comments
relating to the Registration Statement before filing or submission to the SEC. IBG shall consider in good faith all comments from HCBI and its legal, financial and accounting advisors to the Registration Statement, all amendments and supplements
thereto and all responses to requests for additional information. HCBI agrees to cooperate with IBG and IBG’s counsel and accountants in requesting and obtaining appropriate opinions, consents and letters from its financial advisor and
independent auditor and in taking such other actions in connection with the Registration Statement and the Proxy Statement. If HCBI has cooperated and promptly provided all information reasonably requested as described above, IBG shall file, or
cause to be filed, the Registration Statement with the SEC on or before July 15, 2014. IBG shall use its commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as
reasonably practicable after the filing thereof. IBG also agrees to use its commercially reasonable efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to carry out the transactions
contemplated by this Agreement.
B. The HCBI Board shall duly call, give notice of, and cause to be held, a meeting of its
shareholders (the “
Meeting
”) and will direct that this Agreement and the transactions contemplated hereby be submitted to a vote at the Meeting. Specifically, the HCBI Board will present for the consideration of HCBI shareholders a
proposal to approve and adopt this Agreement, the Merger, the Merger Agreement and the transactions contemplated hereby
4
and thereby. The HCBI Board will (i) cause proper notice of the Meeting to be given to the HCBI shareholders in compliance with applicable law and regulations, (ii) distribute to the
HCBI shareholders the Proxy Statement, (iii) recommend by the affirmative vote of the HCBI Board a vote in favor of approval of the proposals set forth in this Section 1.08(B), subject to Section 1.08(C), and (iv) perform such
other acts as may reasonably be requested by IBG to ensure that shareholder approval of the proposals set forth in this Section 1.08(B) are obtained. HCBI shall print and commence the mailing (at its expense) of the Proxy Statement to its
shareholders on or before the third business day after the date that the Registration Statement is declared effective and a final prospectus (relating to the Registration Statement) and Proxy Statement is on file with the SEC before such mailing.
C. Notwithstanding the foregoing, HCBI and the Board of Directors of HCBI (the “
HCBI Board
”) are permitted
to change its recommendation as contemplated by Section 1.08(B)(iii) (“
Change in Recommendation
”) if and only to the extent that:
(1) HCBI, HCB and the HCBI Representatives (as defined in Section 5.11), have complied in all material respects with Section 5.11;
(2) the HCBI Board, after consultation with its outside counsel, has determined in good faith that failure to make a
Change in Recommendation would reasonably be expected to result in a violation of its fiduciary duties under applicable law; and
(3) if the HCBI Board intends to make a Change in Recommendation after HCBI has received an Acquisition Proposal, (a) the HCBI Board has concluded in good faith, after giving effect to all of the
adjustments which may be offered by IBG pursuant to subclause (c) below, that such Acquisition Proposal constitutes a Superior Proposal, (b) HCBI shall notify IBG, at least five business days in advance, of its intention to make a Change
in Recommendation in response to such Superior Proposal (including the identity of the party making such Acquisition Proposal) and furnish to IBG a written description of the material terms of the Superior Proposal and copies of such other material
documents that HCBI is not required to keep confidential, and (c) before making such a Change in Recommendation, HCBI shall, and shall cause its financial and legal advisors to, during the period after HCBI’s delivery of the notice
referred to in subclause (b) above, negotiate with IBG in good faith for a period of up to five business days (to the extent IBG desires to negotiate) to make such adjustments in the terms and conditions of this Agreement so that such
Acquisition Proposal ceases to constitute a Superior Proposal.
Section 1.09.
Exchange Procedures
.
A. On the business day before the Closing Date, IBG shall deposit or cause to be deposited in trust with Wells Fargo Bank, N.A. (the
“
Exchange Agent
”) (i) an authorization to issue shares in book entry form representing the aggregate number of IBG Shares which the holders of HCBI Shares are entitled to receive pursuant to Section 1.05, and (ii) an
amount of cash equal to the aggregate amount of cash which the holders of HCBI Shares are entitled to receive pursuant to Section 1.05 (collectively, the “
Aggregate Merger Consideration
”).
5
B. As soon as practicable after the Effective Time, with the intent to be within ten
business days after the Effective Time, IBG shall cause the Exchange Agent to mail to each record holder of an outstanding certificate or certificates representing HCBI Shares (the “
Certificates
”), a form letter of transmittal which
will specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Exchange Agent and contain instructions for use in effecting the surrender of the
Certificates for payment therefor. The form and substance of the letter of transmittal and any associated cover letter shall be mutually acceptable to IBG and HCBI before such transmittal materials are mailed to the holders of the Certificates. Upon
surrender to the Exchange Agent of a Certificate, together with such letter of transmittal properly completed and duly executed (the “
Transmittal Materials
”), the holder of such Certificate shall be entitled to receive in exchange
therefor (i) an amount of cash equal to the product of (x) the Per Share Cash Consideration, or the Adjusted Per Share Cash Consideration (as defined in Section 8.07), if applicable, multiplied by (y) the number of HCBI Shares
represented by the Certificate (the “
Surrendered Shares
”), (ii) a number of IBG Shares equal to the product of (x) the Per Share Stock Consideration, multiplied by (y) the number of Surrendered Shares, and
(iii) an amount of cash as payment in lieu of the issuance of fractional IBG Shares calculated in accordance with Section 1.05(B)(3), and such Certificate shall forthwith be canceled. The consideration to be received by a shareholder of
HCBI upon surrender of his Certificate is referred to as the “
Merger Consideration
.” Until surrendered in accordance with this Section 1.09, each Certificate (other than Certificates representing Dissenting Shares) shall
represent for all purposes the right to receive the Merger Consideration without any interest thereon. Promptly after receipt of the Transmittal Materials, IBG will cause the Exchange Agent to review the Transmittal Materials in order to verify
proper completion and execution thereof. As soon as practicable after the Effective Time and the surrender of a Certificate to the Exchange Agent, together with properly completed and executed Transmittal Materials, with the intent to be no later
than five business days after such surrender, IBG will cause the Exchange Agent to promptly deliver the Merger Consideration.
C. After the Effective Time, the share transfer ledger of HCBI shall be closed and there shall be no transfers on the share transfer
books of HCBI of the HCBI Shares which were outstanding immediately before such time of filing. If, after the Effective Time, Certificates are presented to IBG, they shall be promptly presented to the Exchange Agent and exchanged as provided in this
Section 1.09.
D. Former shareholders of HCBI shall be entitled to vote after the Effective Time at any meeting of
IBG’s shareholders the number of IBG Shares into which their shares are converted, regardless of whether such shareholders of HCBI have surrendered their Certificates in exchange therefor.
E. No dividends or other distributions declared after the Effective Time with respect to IBG Shares and payable to the holders thereof
shall be paid to the holder of a Certificate until such holder surrenders such Certificate to the Exchange Agent in accordance with this Section 1.09. After the surrender of a Certificate in accordance with this Section 1.09, the holder
thereof shall be entitled to receive any such dividends or other distributions, without interest thereon, which had become payable after the Effective Time with respect to the IBG Shares represented by such Certificate.
6
F. Any portion of the Aggregate Merger Consideration (including the proceeds of any
investments thereof) that remains unclaimed by the shareholders of HCBI for six months after the Exchange Agent mails the letter of transmittal pursuant to this Section 1.09 shall be delivered to IBG upon demand, and any shareholders of HCBI
who have not theretofore complied with the exchange procedures in this Section 1.09 shall look to IBG only, and not the Exchange Agent, for the payment of the Merger Consideration in respect of such shares. If outstanding Certificates for HCBI
Shares are not surrendered or the payment for them is not claimed before the date on which such IBG Shares or cash would otherwise escheat to any governmental unit or agency, the unclaimed items shall, to the extent permitted by abandoned property
or any other applicable law, become the property of IBG (and to the extent not in its possession shall be delivered to it), free and clear of all claims or interest of any person previously entitled to such property.
G. If any IBG Shares are to be issued in a name other than that in which the Certificate surrendered in exchange therefor is registered,
it shall be a condition of the issuance thereof that the Certificate so surrendered shall be appropriately endorsed (or accompanied by an appropriate instrument of transfer) and otherwise in proper form (reasonably satisfactory to IBG) for transfer,
and that the person requesting such exchange shall pay to the Exchange Agent in advance any transfer or other taxes required by reason of the issuance of a certificate representing IBG Shares in any name other than that of the registered holder of
the Certificate surrendered, or required for any other reason, or shall establish to the satisfaction of the Exchange Agent that such tax has been paid or not payable.
H. None of IBG, HCBI, the Exchange Agent or any other person shall be liable to any former holder of HCBI Shares for any IBG Share (or dividends or distributions with respect thereto) or cash properly
delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.
I. If any Certificate has
been lost, stolen or destroyed, then upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by IBG or the Exchange Agent, the posting by such person of a bond in such
amount as IBG or the Exchange Agent may direct (not to exceed the amount of Merger Consideration relating to the relevant missing Certificate) as indemnity against any claim that may be made against IBG, Independent Bank, or HCBI with respect to
such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof pursuant to this Agreement.
Section 1.10.
Effective Time
. The “Effective Time” means the effective time of the Merger as specified in the
Certificate of Merger filed with and certified by the Texas Secretary of State (“
TSOS
”). The Certificate of Merger shall be filed with the TSOS on the Closing Date.
Section 1.11.
Subsequent Merger and Bank Merger
. Immediately after the Effective Time, IBG shall cause the Subsequent Merger
and the Bank Merger to be consummated.
Section 1.12.
Anti-Dilution Provisions
. If, between the date of this
Agreement and the Effective Time, the IBG Shares are changed into a different number or class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or
7
readjustment, or a share dividend thereon is declared with a record date within said period, the Per Share Stock Consideration shall be adjusted accordingly; but an offering or sale of IBG Shares
shall not be deemed a reclassification, recapitalization, split-up, combination, exchange of shares or readjustment of the IBG Shares.
Section 1.13.
Tax Matters
.
A. None of IBG, Independent Bank, Newco,
HCBI or HCB has taken or agreed to take any action, or is aware of any fact or circumstance, that would prevent the Merger and the Subsequent Merger, together, from qualifying as a reorganization within the meaning of § 368 of the Code. IBG,
Independent Bank, Newco, HCBI and HCB shall each use its reasonable best efforts to cause (i) the Merger and the Subsequent Merger, together, to qualify as a “reorganization” within the meaning of § 368(a) of the Code, and
(ii) each of IBG and HCBI to be a party to the reorganization within the meaning of § 368(b) of the Code. Each of IBG, Independent Bank, Newco, HCBI and HCB agrees to file all of its tax returns, including complying with the filing
requirements of Treasury Regulations § 1.368-3, consistent with the treatment of the Merger as a “reorganization” within the meaning of § 368(a) of the Code and in particular as a transaction described in § 368(a)(1)(A) of
the Code, Treasury Regulations § 1.368-2(b)(1)(ii) and Revenue Ruling 2001-46, 2001-42 I.R.B. 321, Situation 1. This Agreement is intended to constitute a “plan of reorganization” within the meaning of Treasury Regulations §
1.368-2(g).
B. None of IBG, Independent Bank, Newco, HCBI or HCB has taken or agreed to take any action, or is aware of any
fact or circumstance, that would prevent the Bank Merger from qualifying as a reorganization within the meaning of § 368 of the Code. IBG, Independent Bank, Newco, HCBI and HCB shall each use its reasonable best efforts to cause (i) the
Bank Merger to qualify as a “reorganization” within the meaning of § 368(a) of the Code, and (ii) each of Independent Bank and HCB to be a party to the reorganization within the meaning of § 368(b) of the Code. Each of IBG,
Independent Bank, Newco, HCBI and HCB agrees to file all of its tax returns, including complying with the filing requirements of Treasury Regulations § 1.368-3, consistent with the treatment of the Bank Merger as a “reorganization”
within the meaning of § 368(a) of the Code and in particular as a transaction described in § 368(a)(1)(A) of the Code and Treasury Regulations § 1.368-2(b)(1)(ii). This Agreement is intended to constitute a “plan of
reorganization” within the meaning of Treasury Regulations § 1.368-2(g).
C. IBG and Newco shall deliver to Andrews
Kurth LLP and Harris Law Firm PC a “Tax Representation Letter,” dated as of the effective date of the Registration Statement and signed by an officer of IBG, containing representations of IBG and Newco, and HCBI shall deliver to Andrews
Kurth LLP and Harris Law Firm PC a “Tax Representation Letter,” dated as of the effective date of the Registration Statement and signed by an officer of HCBI, containing representations of HCBI, in each case as shall be reasonably
necessary or appropriate to enable Andrews Kurth LLP to render its tax opinion in connection with the Registration Statement and to enable Harris Law Firm PC to render its tax opinion in connection with the Registration Statement. IBG and Newco
shall deliver to Andrews Kurth LLP and Harris Law Firm PC a “Tax Representation Letter,” dated as of the Closing Date and signed by an officer of IBG, containing representations of IBG and Newco, and HCBI shall deliver to Andrews Kurth LLP
and Harris
8
Law Firm PC a “Tax Representation Letter,” dated as of the Closing Date and signed by an officer of HCBI, containing representations of HCBI, in each case as shall be reasonably
necessary or appropriate to enable Andrews Kurth LLP to render the tax opinion described in Section 8.15 and to enable Harris Law Firm PC to render the tax opinion described in Section 7.12. Independent Bank shall deliver to Andrews Kurth
LLP a “Tax Representation Letter,” dated as of the Closing Date and signed by an officer of Independent Bank, containing representations of Independent Bank, and HCB shall deliver to Andrews Kurth LLP a “Tax Representation
Letter,” dated as of the Closing Date and signed by an officer of HCB, containing representations of HCB, in each case as shall be reasonably necessary or appropriate to enable Andrews Kurth LLP to render the tax opinions described in
Section 8.15. Each of IBG, Independent Bank, Newco, HCBI and HCB shall use its reasonable best efforts not to take or cause to be taken any action that would cause to be untrue (or fail to take or cause not to be taken any action that would
cause to be untrue) any of the certifications and representations included in the tax representation letters described in this Section 1.13(C).
D. A HCBI representative shall prepare or cause to be prepared and file or cause to be filed, subject to the review and reasonable approval of IBG, all Tax Returns for each of HCBI and HCB for all periods
ending on or prior to the Closing Date that are required to be filed after the Closing Date. If required by applicable law, IBG shall, and shall cause HCBI or HCB to, authorize and direct their respective officers to execute any and all Tax Returns
required to be filed by each of HCBI and HCB pursuant to this Section 1.13(D). The shareholders of HCBI and HCB shall be responsible for the amount of Taxes of HCBI and HCB shown due on such Tax Returns. All such Tax Returns shall be prepared
in a manner that is consistent with the past custom and practice of HCBI and HCB effective for fiscal year 2013, except as required by a change in applicable law.
ARTICLE II
THE CLOSING AND THE CLOSING DATE
Section 2.01.
Time and Place of the Closing and Closing Date
. The transactions contemplated under this Agreement shall be
consummated on a date mutually agreeable to IBG and HCBI that is within forty-five days after the receipt of all necessary regulatory, corporate and other approvals, and the expiration of all associated mandatory waiting periods (“
Closing
Date
”); provided, however, that the Closing will not occur prior to October 1, 2014. On the Closing Date, a meeting (the “
Closing
”) will take place at which the parties to this Agreement will exchange certificates,
letters and other documents in order to determine whether all of the conditions set forth in ARTICLE VII and ARTICLE VIII have been satisfied or waived or whether any condition exists that would permit a party to this Agreement to terminate this
Agreement. If no such condition then exists or if no party elects to exercise any right it may have to terminate this Agreement, then and thereupon the appropriate parties shall execute such documents and instruments as may be necessary or
appropriate in order to effect the transactions contemplated by this Agreement.
The Closing shall take place at 10:00 a.m.,
local time at the offices of IBG on the Closing Date, or at such other time and place to which IBG and HCBI may agree.
9
Section 2.02.
Actions to be Taken at the Closing by HCBI
. At the Closing, HCBI
shall execute and acknowledge (where appropriate) and deliver to IBG such documents and certificates necessary to carry out the terms and provisions of this Agreement, including the following (all of such actions constituting conditions precedent to
IBG’s obligations to close hereunder):
A. A certificate, dated as of the Closing Date, duly executed by the Secretary of
HCBI, acting solely in his capacity as an officer of HCBI, pursuant to which HCBI shall certify (i) the due adoption by the HCBI Board of corporate resolutions attached to such certificate authorizing the execution and delivery of this
Agreement, the Merger Agreement and any other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and thereby; (ii) the approval by the shareholders of HCBI of this Agreement,
the Merger Agreement and any other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and thereby, including the Merger; (iii) the incumbency and true signatures of those
officers of HCBI duly authorized to act on its behalf in connection with the execution and delivery of this Agreement, the Merger Agreement and any other agreements and documents contemplated hereby and thereby, and the taking of all actions
contemplated hereby and thereby on behalf of HCBI; and (iv) a true and correct list of the holders of HCBI Shares as of the Closing Date;
B. A certificate, dated as of the Closing Date, duly executed by the Chairman of HCB, acting solely in his capacity as an officer of HCB, pursuant to which HCB shall certify (i) the due adoption by
the Board of Directors of HCB (the “
HCB Board
”) of corporate resolutions attached to such certificate authorizing the execution and delivery of a merger agreement providing for the Bank Merger (the “
Bank Merger
Agreement
”) and any other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and thereby, including the Bank Merger; (ii) the approval by HCBI as the sole shareholder
of HCB of the Bank Merger Agreement and any other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and thereby, including the Bank Merger; (iii) the incumbency and true
signatures of those officers of HCB duly authorized to act on its behalf in connection with the execution and delivery of the Bank Merger Agreement and any other agreements and documents contemplated hereby and thereby, and the taking of all actions
contemplated hereby and thereby on behalf of HCB; and (iv) a true and correct list of the shareholder of HCB;
C. A
certificate duly executed by the President of HCBI, acting solely in his capacity as an officer of HCBI, dated as of the Closing Date, pursuant to which HCBI shall certify, that (i) all of the representations and warranties made in ARTICLE III
are true and correct in all material respects on and as of the date of such certificate as if made on such date, (ii) HCBI has performed and complied in all material respects with all of its obligations and agreements required to be performed
on or before the Closing Date under this Agreement, and (iii) there has been no Material Adverse Change (as defined in Section 11.10(G)) with respect to HCBI or HCB since March 31, 2014;
D. Evidence reasonably satisfactory to IBG that, as of the Effective Time, (i) all HCBI Employee Plans (as defined in
Section 3.29) required to be terminated by IBG
10
before the Closing have been terminated in accordance with the terms of such Employee Plans, the Code, the Employee Retirement Income Security Act of 1974, as amended (“
ERISA
”),
and all other applicable laws and regulations and that all affected participants have been notified of such terminations and (ii) that the retention agreements set forth in
Confidential Schedule 5.14
have been terminated and all
obligations of HCBI and HCB have been released;
E. All consents and approvals required to be obtained by HCBI from third
parties to consummate the transactions contemplated by this Agreement, including those listed on
Confidential Schedule 3.09
;
F. Supplemental disclosure schedules reflecting any material changes to the representations of HCBI in ARTICLE III between the date of this Agreement and the Closing Date;
G. The Releases (as defined in Section 5.17), signed by the directors and executive officers of HCBI and HCB;
H. The Support Agreements (as defined in Section 5.19) signed by the directors of HCBI and HCB;
I. Executed agreements, certificates of merger, certificates, and other documents to evidence and facilitate the Bank Merger; and
J. All other documents required to be delivered to IBG by HCBI under the provisions of this Agreement and all other
documents, certificates and instruments as are consistent with the intent of this Agreement and reasonably requested by IBG or its counsel.
Section 2.03.
Actions to be Taken at the Closing by IBG
. At the Closing, IBG shall execute and acknowledge (where appropriate) and deliver to HCBI such documents and certificates necessary to
carry out the terms and provisions of this Agreement, including the following (all of such actions constituting conditions precedent to HCBI’s obligations to close hereunder):
A. A certificate, dated as of the Closing Date, executed by the Secretary of IBG, acting solely in her capacity as an officer of IBG,
pursuant to which IBG shall certify (i) the due adoption by the Board of Directors of IBG (the “
IBG Board
”) of corporate resolutions attached to such certificate authorizing the execution and delivery of this Agreement, the
Merger Agreement, and of resolutions approving the Subsequent Merger pursuant to Section 10.006 of the TBOC, and the other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby
and thereby, including the Merger and the Subsequent Merger; and (ii) the incumbency and true signatures of those officers of IBG duly authorized to act on its behalf in connection with the execution and delivery of this Agreement, the Merger
Agreement, documents to complete the Subsequent Merger (the “
Subsequent Merger Documents
”) and any other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and
thereby on behalf of IBG;
B. A certificate, dated as of the Closing Date, duly executed by the Secretary of Independent Bank,
acting solely in her capacity as an officer of Independent Bank, pursuant to
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which Independent Bank shall certify (i) the due adoption by the Board of Directors of Independent Bank (the “
Independent Bank Board
”) of corporate resolutions attached to
such certificate authorizing the execution and delivery of the Bank Merger Agreement and any other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and thereby; (ii) the
approval by IBG as the sole shareholder of Independent Bank of the Bank Merger Agreement and any other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and thereby, including the
Bank Merger; (iii) the incumbency and true signatures of those officers of Independent Bank duly authorized to act on its behalf in connection with the execution and delivery of the Bank Merger Agreement and any other agreements and documents
contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and thereby, on behalf of Independent Bank; and (iv) a true and correct list of the shareholder of Independent Bank as of the Closing Date;
C. A certificate, dated as of the Closing Date, executed by the Secretary of Newco, acting solely in her capacity as an
officer of Newco, pursuant to which Newco shall certify (i) the due adoption by the Board of Directors of Newco (the “
Newco Board
”) of corporate resolutions attached to such certificate authorizing the execution and delivery of
the Merger Agreement and the other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and thereby; (ii) the approval by IBG as the sole shareholder of Newco of the Merger
Agreement and any other agreements and documents contemplated hereby and thereby, and the consummation of the transactions contemplated hereby and thereby, including the Merger and the Subsequent Merger; and (iii) the incumbency and true
signatures of those officers of Newco duly authorized to act on its behalf in connection with the execution and delivery of the Merger Agreement, the Subsequent Merger Documents and any other agreements and documents contemplated hereby and thereby,
and the consummation of the transactions contemplated hereby and thereby on behalf of Newco;
D. A certificate, dated as of
the Closing Date, duly executed by the Chairman of the Board of IBG, acting solely in his capacity as an officer of IBG, pursuant to which IBG shall certify that (i) all of the representations and warranties made in ARTICLE IV are true and
correct in all material respects on and as of the date of such certificate as if made on such date, (ii) IBG has performed and complied in all material respects with all of its obligations and agreements required to be performed on or before
the Closing Date under this Agreement and (iii) there has been no Material Adverse Change with respect to IBG or Independent Bank since March 31, 2014;
E. All consents and approvals required to be obtained by IBG from third parties to consummate the transactions contemplated by this Agreement, including those listed on
Confidential Schedule 4.07
;
F. Supplemental disclosure schedules reflecting any material changes to the representations of IBG in ARTICLE IV between the
date of this Agreement and the Closing Date;
G. Executed agreements, certificates of merger, certificates, as applicable, and
other documents to evidence and facilitate the Subsequent Merger and the Bank Merger; and
H. All other documents required to
be delivered to HCBI by IBG under the provisions of this Agreement and all other documents, certificates and instruments as are consistent with the terms of this Agreement and reasonably requested by HCBI or its counsel.
12
Section 2.04.
Further Assurances
. At any time and from time to time within
twelve months after the Closing, at the reasonable request of any party to this Agreement and without further consideration, any party so requested will execute and deliver such other instruments and take such other action as the requesting party
may reasonably deem necessary or desirable in order to effectuate the transactions contemplated hereby. If at any time after the Closing any further commercially reasonable action is necessary or desirable to carry out the purposes of this
Agreement, each party hereto shall take or cause to be taken all such commercially reasonable actions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HCBI
HCBI hereby makes the following representations and warranties to IBG. HCBI agrees to provide to IBG at the Closing supplemental confidential disclosure schedules (the “
Schedules
”)
reflecting any material changes to the representations and warranties set forth herein between the date of this Agreement and the Closing Date. The disclosure of a matter on any Schedule shall constitute disclosure for purposes of all Schedules
required by this Agreement.
Section 3.01.
Organization and Ownership
.
A. HCBI is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. HCBI is a corporation duly
organized, validly existing and in good standing under all laws, rules and regulations of the State of Texas. HCBI has all requisite corporate power and authority to own HCB as now owned, and to enter into and carry out its obligations under this
Agreement and the Merger Agreement. True and complete copies of the Articles of Incorporation and Bylaws of HCBI, as amended to date, have been delivered to IBG.
B. HCBI is the sole record and beneficial owner all of the issued and outstanding shares of capital stock of HCB Nevada, and HCB Nevada is the sole record and beneficial owner of all of the issued and
outstanding shares of capital stock of HCB, in each case free and clear of all liens, security interests, and encumbrances of every kind or character, and no other person or entity has any equity or other interest in HCB Nevada or HCB. Neither HCBI
nor HCB Nevada directly or indirectly, owns or controls any Affiliate (as defined in Section 11.10) or Subsidiary (as defined in Section 11.10), other than HCB or (in the case of HCBI) HCB Nevada. Except as set forth in
Confidential
Schedule 3.01(B)
, neither HCBI nor HCB Nevada has any equity interest, direct or indirect, in any other bank or corporation or in any partnership, joint venture or other business enterprise or entity, and the business carried on by HCBI has not
been conducted through any other direct or indirect Subsidiary or Affiliate of HCBI other than HCB or (in the case of HCBI) HCB Nevada.
Section 3.02.
Execution and Delivery
. HCBI has full corporate power and authority to execute and deliver this Agreement and the Merger Agreement and to consummate the
13
transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Merger Agreement, and (if the required regulatory and shareholder approvals are obtained) the
consummation of the transactions contemplated hereby and thereby, have been duly and validly approved by the HCBI Board. Other than approval by the requisite vote of the shareholders of HCBI, no other corporate proceedings or approvals are necessary
on the part of HCBI to approve this Agreement or the Merger Agreement, and to consummate the transactions contemplated hereby and thereby. This Agreement, the Merger Agreement, and the other agreements and documents contemplated hereby and thereby,
have been or at Closing will be duly executed by HCBI and each such agreement or document constitutes or at Closing will constitute a legal, valid and binding obligation of HCBI, enforceable in accordance with its respective terms and conditions,
except as enforceability may be limited by bankruptcy, conservatorship, insolvency, moratorium, reorganization, receivership or similar laws and judicial decisions affecting the rights of creditors generally and by general principles of equity
(whether applied in a proceeding at law or in equity).
Section 3.03.
HCBI Capitalization
. The authorized capital
of HCBI consists of 1,000,000 common shares, $1.00 par value per share, of which 551,993 HCBI Shares are issued and outstanding as of the date of this Agreement. All offerings by HCBI to issue its capital have terminated. There are no (A) other
outstanding equity securities of any kind or character, or (B) outstanding subscriptions, options, convertible securities, rights, warrants, calls or other agreements or commitments of any kind issued or granted by, or binding upon, HCBI to
purchase or otherwise acquire any security of or equity interest in HCBI, obligating HCBI to issue any shares of, restricting the transfer of or otherwise relating to shares of its capital of any class. Except as disclosed on
Confidential
Schedule 3.03,
there are no outstanding contractual obligations of HCBI to vote or dispose of any HCBI Shares and there are no shareholder agreements, voting trusts or similar agreements relating to the HCBI Shares except as set forth in the
Bylaws of HCBI. All of the outstanding HCBI Shares have been duly authorized, validly issued and are fully paid and nonassessable, and have not been issued in violation of the preemptive rights of any person. The HCBI Shares have been issued in
material compliance with the securities laws of the United States and other jurisdictions having applicable securities laws. There are no restrictions applicable to the payment of dividends on the HCBI Shares except pursuant to applicable laws and
regulations, and all dividends declared before the date of this Agreement have been paid.
Section 3.04.
HCB
.
A. HCB is a national banking association, duly organized and validly existing under the laws of the United States, and in
good standing under the laws of the State of Texas. HCB has all requisite corporate power and authority (including all licenses, franchises, permits and other governmental authorizations as are legally required) to carry on its business as now being
conducted, to own, lease and operate its properties and assets as now owned, leased or operated and to enter into and to carry on the business and activities now conducted by it. True and complete copies of the Articles of Association and Bylaws of
HCB, as amended to date, have been delivered to IBG. HCB is an insured bank as defined in the Federal Deposit Insurance Act of 1950, as amended (the “
FDIA
”). The nature of the business of HCB does not require it to be qualified to
do business in any jurisdiction other than the State of Texas. HCB has no equity interest, direct or indirect, in any other bank or corporation or in any partnership, joint venture or
14
other business enterprise or entity, except as acquired through settlement of indebtedness, foreclosure, the exercise of creditors’ remedies or in a fiduciary capacity, and the business
carried on by HCB has not been conducted through any other direct or indirect Subsidiary or Affiliate of HCB.
B. The
authorized capital stock of HCB consists of 120,000 shares of common stock, $10.00 par value per share, of which 108,800 shares are issued and outstanding as of the date of this Agreement. HCBI is in possession of all certificates evidencing all of
the shares of capital stock of HCB. All of the outstanding shares of capital stock or other securities evidencing ownership of HCB are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of the
preemptive rights of any person and have been issued in material compliance with applicable securities laws. There are no restrictions applicable to the payment of dividends on the shares of the capital stock of HCB, except pursuant to applicable
laws and regulations, and all dividends declared before the date of this Agreement on such capital stock have been paid. There are no (A) other outstanding equity securities of any kind or character, or (B) outstanding subscriptions,
contracts, options, convertible securities, preemptive rights, warrants, calls or other agreements or commitments of any kind issued or granted by, binding upon or otherwise obligating HCB to issue, sell or otherwise dispose of, or to purchase,
redeem or otherwise acquire, any shares of capital stock of HCB. There are no outstanding contractual obligations of HCBI to vote or dispose of any shares of capital stock of HCB. There are no shareholder agreements, voting trusts or similar
agreements relating to the capital stock of HCB.
Section 3.05.
No Violation
. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by HCBI or HCB with any of the terms or provisions hereof (if the required regulatory and shareholder approvals are obtained) will (i) violate any
provision of the charters, articles, certificates or bylaws of HCBI or HCB; (ii) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to HCBI or HCB or any of their Properties (as
defined in Section 11.10) or assets; (iii) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or the lapse of time, or both, would
constitute a default) under, result in the termination or cancellation under, accelerate the performance required by or rights or obligations under, or result in the creation of any lien upon any of the respective Properties or assets of HCBI or HCB
under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture or deed of trust, or any material license, lease, agreement, contract or other instrument or obligation to which HCBI or HCB is a party, or by which HCBI or HCB
or any of their respective Properties, assets or business activities may be bound or subject.
Section 3.06.
Compliance with Laws, Permits and Instruments
. HCBI and HCB, and their respective employees and agents, hold all material licenses, registrations, franchises, permits and authorizations necessary for the lawful conduct of their respective
businesses. HCBI and HCB are in compliance with all applicable laws, statutes, orders, rules, regulations and policies of any Government Authority (as defined in Section 11.10), except where the failure, whether individually or in the
aggregate, to be so in compliance is not reasonably expected to cause a Material Adverse Change.
15
Section 3.07.
Financial Statements
.
A. HCBI has made available to IBG copies of the unaudited financial statements of HCBI as of and for the years ended December 31,
2013 and December 31, 2012 (the “
HCBI Financial Statements
”), audited financial statements for HCB as of and for the years ended December 31, 2013 and December 31, 2012 (the “HCB Financial Statements”), and
HCBI’s FR Y-6, FR Y-9C and FR Y–9LP reports filed during 2014 and 2013 (together, the “
HCBI Regulatory Reports
”). The HCBI Financial Statements and the HCB Financial Statements (including, any related notes), were prepared
in accordance with generally accepted accounting principles (“
GAAP
”) (except as may be indicated in the notes to such financial statements) and fairly present, in all material respects, the financial position of HCBI at the dates
and for the periods indicated therein. Each of the HCBI Regulatory Reports fairly presents, in all material respects, the financial position of HCBI and the result of its operations at the date and for the periods indicated in conformity with the
instructions for the preparation of HCBI Regulatory Reports as promulgated by applicable regulatory authorities.
B. HCBI has
made available to IBG true and complete copies of the Reports of Condition and Income for HCB filed during 2014 and 2013 (“
HCB Call Reports
”). Each of the HCB Call Reports fairly presents, in all material respects, the financial
position of HCB and the results of its operations at the dates and for the periods indicated therein in conformity, in all material respects, with the instructions for the preparation of HCB Call Reports as promulgated by applicable regulatory
authorities. The HCB Call Reports do not contain any items of special or nonrecurring income or any other income not earned in the ordinary course of business. HCB has calculated its allowance for loan losses in accordance with GAAP and, to the
extent applicable, regulatory accounting principles (“
RAP
”) as applied to national banking associations and in accordance with all applicable rules and regulations. To the Best Knowledge (as defined in Section 11.10) of HCBI,
the allowance for loan losses account for HCB is, and as of the Closing Date shall be, adequate in all material respects to provide for all losses on loans and other real estate owned by HCB.
Section 3.08.
Litigation
. Except as disclosed in
Confidential Schedule 3.08,
neither HCBI nor HCB is a party to any,
and there are no pending or, to the Best Knowledge (as defined in Section 11.10) of HCBI, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against HCBI
or HCB which are reasonably likely, individually or in the aggregate, to result in a Material Adverse Change, nor, to the Best Knowledge of HCBI, is there any reasonable basis for any proceeding, claim or action against HCBI or HCB that is
reasonably likely, individually or in the aggregate, to result in a Material Adverse Change. There is no injunction, order, judgment or decree imposed upon HCBI or HCB or the assets or Property of HCBI or HCB that has resulted in, or is reasonably
likely to result in, a Material Adverse Change.
Section 3.09.
Consents and Approvals
. The HCBI Board (at a
meeting duly called and held) has resolved or will resolve to (i) call a special meeting of shareholders for the purpose of approving and adopting the Merger and this Agreement, and (ii) recommend to the HCBI shareholders the approval and
adoption of the Merger and this Agreement. No approval, consent, order or authorization of, or registration, declaration or filing with, any Governmental Authority or other third party is required on the part of HCBI in connection with the
execution, delivery or performance of this Agreement or the agreements contemplated hereby, or the consummation by HCBI of the transactions contemplated hereby or thereby.
16
Section 3.10.
Undisclosed Liabilities
. HCBI and HCB have no material liability
or obligation, accrued, absolute, contingent or otherwise and whether due or to become due (including unfunded obligations under any Employee Plan or liabilities for federal, state or local taxes or assessments) that are not reflected in or
disclosed in the HCBI Financial Statements or the HCB Call Reports, except (A) those liabilities, obligations and expenses incurred in the ordinary course of business and materially consistent with past business practices since March 31,
2014, (B) liabilities, obligations and expenses incurred as a result of or arising from this Agreement or any other agreement or document contemplated hereby, or any of the transactions contemplated hereby or thereby, or (C) liabilities,
obligations and expenses as disclosed on
Confidential Schedule 3.10
.
Section 3.11.
Title to Tangible
Assets
. True and complete copies of all existing deeds, leases and title insurance policies for all Properties and all mortgages, deeds of trust, security agreements and other documents describing encumbrances to which each such Property is
subject have been made available to IBG. HCBI and HCB have good and indefeasible title to, or valid leasehold interest in, all of their respective tangible assets and Properties including all material personal properties reflected in the HCBI
Financial Statements and the HCB Call Reports or acquired thereafter, subject to no liens, mortgages, security interests, encumbrances or charges of any kind except (A) as described in
Confidential Schedule 3.11
, (B) as reflected in
the HCBI Financial Statements or the HCB Call Reports, (C) statutory liens not yet delinquent, (D) consensual landlord liens, (E) minor defects and irregularities in title and encumbrances that do not materially impair the use thereof
for the purpose for which they are held, (F) pledges of assets in the ordinary course of business to secure public funds deposits, and (G) those assets and Properties disposed of for fair value in the ordinary course of business since
March 31, 2014.
Section 3.12.
Absence of Certain Changes or Events
. Except as disclosed on
Confidential
Schedule 3.12
, since March 31, 2014, each of HCBI and HCB has conducted its business only in the ordinary course and has not, other than in the ordinary course of business and materially consistent with past practices:
A. Incurred any obligation or liability, whether absolute, accrued, contingent or otherwise, whether due or to become due, except
deposits taken, federal funds purchased, and current liabilities for trade or business obligations), none of which, individually or in the aggregate, result in a Material Adverse Change;
B. Discharged or satisfied any lien or paid any obligation or liability, whether absolute or contingent, due or to become due in an
amount greater than $25,000 in the aggregate;
C. Declared or made any payment of dividends or other distribution to its
shareholders, or purchased, retired or redeemed, or obligated itself to purchase, retire or redeem, any of its shares of capital or other securities;
17
D. Issued, reserved for issuance, granted, sold or authorized the issuance of any shares of
its capital or other securities or subscriptions, options, warrants, calls, rights or commitments of any kind relating to the issuance thereof;
E. Acquired any capital or other equity securities or acquired any ownership interest in any bank, corporation, partnership or other entity (except (i) through settlement of indebtedness,
foreclosure, or the exercise of creditors’ remedies or (ii) in a fiduciary capacity, the ownership of which does not expose it to any liability from the business, operations or liabilities of such person);
F. Mortgaged, pledged or subjected to lien, charge, security interest or any other encumbrance or restriction any of its Property,
business or assets, tangible or intangible except (i) statutory liens not yet delinquent, (ii) consensual landlord liens, (iii) minor defects and irregularities in title and encumbrances that do not materially impair the use thereof
for the purpose for which they are held, (iv) pledges of assets to secure public funds deposits, and (v) those assets and Properties disposed of for fair value since March 31, 2014;
G. Sold, transferred, leased to others or otherwise disposed of any material amount of its assets (except for assets disposed of for fair
value in the ordinary course of business) or canceled or compromised any debt or claim, or waived or released any right or claim, of material value;
H. Terminated, canceled or surrendered, or received any notice of or threat of termination or cancellation of, any contract, lease or other agreement, or suffered any damage, destruction or loss, which,
individually or in the aggregate, would constitute a Material Adverse Change;
I. Disposed of, permitted to lapse, transferred
or granted any rights under, or entered into any settlement regarding the breach or infringement of, any United States or foreign license or Proprietary Right (as defined in Section 3.17) or modified any existing material rights with respect
thereto;
J. Except for routine salary increases made in the ordinary course of business and materially consistent with past
practices or as contemplated by this Agreement, made any material change in the rate of compensation, commission, bonus, vesting or other direct or indirect remuneration payable, paid or agreed or orally promised to pay, conditionally or otherwise,
any bonus, extra compensation, pension, severance or vacation pay, to or for the benefit of any of its shareholders, directors, officers, employees or agents, or entered into any employment or consulting contract or other agreement with any
director, officer or employee or adopted, amended or terminated (except as expressly provided herein) any pension, employee welfare, retirement, stock purchase, stock option, stock appreciation rights, termination, severance, income protection,
golden parachute, savings or profit sharing plan (including trust agreements and insurance contracts embodying such plans), any deferred compensation, or collective bargaining agreement, any group insurance contract or any other incentive, welfare
or employee benefit plan or agreement maintained by HCBI or HCB for the benefit of their respective directors, employees or former employees;
18
K. Made any capital expenditures or capital additions or betterments in excess of an
aggregate of $25,000;
L. Instituted, had instituted against it, settled or agreed to settle, any litigation, action or
proceeding before any Governmental Authority other than routine collection suits instituted by Governmental Authorities to collect amounts owed or suits in which the amount in controversy is less than $25,000;
M. Suffered any change, event or condition that, individually or in the aggregate, has caused or would reasonably be anticipated to
result in a Material Adverse Change, or any Material Adverse Change in earnings or costs or relations with its employees, agents, depositors, loan customers, correspondent banks, or suppliers;
N. Except for the transactions contemplated by this Agreement or as otherwise permitted hereunder, entered into any transaction, or
entered into, modified or amended any contract or commitment involving a financial commitment over the term of the contract or commitment in excess of $25,000, other than commitments to extend credit made in the ordinary course of business and
materially consistent with past practices;
O. Entered into or given any promise, assurance or guarantee of the payment,
discharge or fulfillment of any undertaking or promise made by any third person, firm or corporation other than in the ordinary course of business and materially consistent with past practices;
P. Sold, or knowingly disposed of, or otherwise divested of the ownership, possession, custody or control, of any corporate books or
records of any nature that, in accordance with sound business practice, normally are retained for a period of time after their use, creation or receipt, except at the end of the normal retention period;
Q. Made any, or acquiesced with any, change in any accounting methods, principles or material practices, except as required by GAAP or
RAP;
R. Sold (but payment at maturity or prepayment is not deemed a sale) Investment Securities (as defined in
Section 11.10) or purchased Investment Securities, other than U.S. Treasury securities with a maturity of two years or less;
S. Made, renewed, extended the maturity of, or altered any of the material terms of any loan to any single borrower and his related interests in excess of the principal amount of $500,000;
T. Amended or made any change in its articles of incorporation, articles of association, or bylaws, or
U. Entered into any agreement or made any commitment whether in writing or otherwise to take any of the types of action described in
subsections A through T above.
Section 3.13.
Leases, Contracts and Agreements
.
Confidential Schedule 3.13
sets forth an accurate and complete description of all contracts, leases, subleases, licenses, and agreements
19
to which HCBI or HCB is a party or by which HCBI or HCB is bound (A) that obligate or would reasonably be expected to obligate HCBI or HCB for an amount in excess of $50,000 over the entire
term of any such agreement or (B) that are related or of a similar nature and that in the aggregate obligate or would reasonably be expected to obligate HCBI or HCB for an amount in excess of $50,000 over the entire term of such related
contracts (collectively, the “
Contracts
”). HCBI has delivered or made available to IBG true and correct copies of all Contracts. For the purposes of this Agreement, the Contracts shall do not include loans made by, repurchase
agreements made by, spot foreign exchange transactions of, bankers acceptances of or deposits by HCB, but do include unfunded loan commitments and letters of credit issued by HCB where the borrowers’ total direct and indirect indebtedness to
HCB is in excess of $100,000. No participations or loans have been sold that have buy back, recourse or guaranty provisions that create contingent or direct liabilities of HCB. HCBI and HCB have not received any written notice of material default
under or material noncompliance with any Contract. For each lease in which HCBI or HCB is named as lessee, such party is the owner and holder of all the leasehold estates or other rights and interest purported to be granted by such instruments, in
each case free and clear of any lessee-granted security interests, claims, liens (including tax liens), forfeitures, mortgages, pledges, penalties, encumbrances, assignments or charges whatsoever except as established by the lease or applicable law.
HCBI and HCB enjoy peaceful and undisturbed possession under all leases under which they are currently operating.
Section 3.14.
Taxes and Tax Returns
.
A. HCBI and HCB have duly and timely filed or caused to be filed all federal, state, foreign and local tax returns and reports required to be filed by them on or before the date of this Agreement (all
such returns and reports being accurate and complete in all material respects) and have duly paid or caused to be paid on their behalf all taxes that are due and payable by them on or before the date of this Agreement, other than taxes that are
being contested in good faith and are adequately reserved against or provided for (in accordance with GAAP) on their respective financial statements. As of the date hereof, HCBI and HCB have no material liability for taxes in excess of the amount
reserved or provided for on their respective financial statements as of the date thereof.
B. There are no disputes pending
with respect to, or claims or assessments asserted in writing for, any material amount of taxes upon HCBI or HCB, nor has HCBI or HCB given or been requested in writing to give any currently effective waivers extending the statutory period of
limitation applicable to any tax return for any period.
C. Proper and accurate amounts, if required, have been withheld by
HCBI and HCB from their respective employees, independent contractors, creditors, shareholders or other third parties for all periods in material compliance with the tax withholding provisions of applicable law.
D. Except as set forth in
Confidential Schedule 3.14
, since December 31, 2010, the federal income tax returns of HCBI and HCB
have not been audited or examined and no such audit is currently pending or, to the Best Knowledge of HCBI, threatened.
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E. Neither HCBI nor HCB has entered into any tax sharing agreement, tax allocation
agreement, tax indemnity agreement, or similar contract or arrangement or any current or potential contractual obligation to indemnify any other person with respect to taxes that will require any payment by HCBI or HCB after the date of this
Agreement.
F. The terms “
tax
” and “
taxes
” mean all federal, state, local and foreign
income, excise, gross receipts, gross income, ad valorem, profits, gains, property, capital, sales, transfer, use, value-added, stamp, documentation, payroll, employment, severance, withholding, duties, intangibles, franchise, backup withholding,
and other taxes, charges, levies or like assessments together with all penalties and additions to tax and interest thereon,
provided
that in the case of HCBI and HCB, the terms “tax” and “taxes” shall not include federal
income tax, due to the status of HCBI and HCB as an S corporation and a qualified Subchapter S subsidiary, respectively. Additionally, the terms “
tax return
” and “
tax returns
” means any return, declaration, report,
claim for refund or information return or statement relating to taxes, including any schedule or attachment thereto and including any amendment thereof.
G. HCBI has delivered or made available to IBG correct and complete copies of all federal income tax returns filed by HCBI with the Internal Revenue Service (“
IRS
”), examination reports,
and statements of deficiencies assessed against or agreed to by HCBI and HCB, if any, since with respect to any taxable period beginning on or after December 31, 2009.
H.
Confidential Schedule 3.14
sets forth an accurate and complete description as to the United States federal net operating and capital loss carryforwards for HCBI and HCB (including the year such
net operating or capital loss was generated and any limitations of such net operating or capital loss carryforwards under Code § § 382, 383 or 384 or the Treasury Regulations, excluding any such limitations arising from the
transactions contemplated under this Agreement) as of December 31, 2012.
I. Effective as of January 1, 1997 (the
“
S Election Date
”), HCBI made a valid election to be taxed, for federal income tax purposes, as a Subchapter S corporation and that election is in effect as of the date of this Agreement. Effective on the S Election Date, HCBI made
a valid election for HCB to be taxed, for federal income tax purposes, as a qualified Subchapter S subsidiary (a “
QSSS
”), and each such election is in effect as of the date of this Agreement. Neither HCBI nor HCB have taken any
action that would cause HCBI to cease being an S corporation or cause HCB to cease being a QSSS before the Closing Date. HCBI and HCB are not currently and will not at any time before the Closing Date be liable for any tax under Code
§1374.
J. Except as set forth in
Confidential Schedule 3.14
, for any tax year of HCBI beginning on or after the S
Election Date, no audit by the IRS has commenced or been completed pursuant to Code §§6241 through 6245 regarding Subchapter S items, and no agreement, consent or waiver to extend the statute of limitations of Subchapter S items of HCBI
has been given. To HCBI’s Best Knowledge, for any tax year of HCBI beginning after the S Election Date, each HCBI shareholder’s treatment of Subchapter S items with respect to HCBI is consistent with the manner in which HCBI has filed its
tax returns, and no audit by the IRS of any HCBI shareholder has occurred except as set forth in
Confidential Schedule 3.14
.
21
K. Since the S Election Date, HCBI has not been required to include in income any material
adjustment pursuant to Code §481 by reason of a voluntary change in accounting method initiated by HCBI, and the IRS has not initiated or proposed any such material adjustment or change in accounting method (including any method for determining
reserves for bad debts maintained by HCBI). No dividend or other distribution declared or paid by HCBI since the S Election Date has exceeded the portion of HCBI’s “accumulated adjustments account” (within the meaning of Treasury
Regulation § 1.1368-2) properly allocated to such distribution in accordance with that regulation, and no dividend or distribution declared or paid by HCBI before the Effective Time will exceed the portion of HCBI’s accumulated adjustments
account properly allocated to such distribution in accordance with that regulation.
Section 3.15.
Insurance
.
Confidential Schedule 3.15
contains a complete list and brief description of all policies of insurance, including fidelity and bond insurance, maintained as of the date of this Agreement by HCBI and HCB. All such policies (A) are
sufficient for compliance by HCBI and HCB, in all material respects, with all requirements of applicable law and all agreements to which HCBI and HCB are parties, (B) are valid, outstanding and enforceable, except as enforceability may be
limited by bankruptcy, conservatorship, insolvency, moratorium, reorganization, receivership, or similar laws and judicial decisions affecting the rights of creditors generally and by general principles of equity (whether applied in a proceeding at
law or equity), and (C) are presently in full force and effect, and, except as set forth in
Confidential Schedule 3.15
, no written notice has been received of the cancellation, or threatened or proposed cancellation, of any such policy
and there are no unpaid premiums due thereon. Neither HCBI nor HCB is in default with respect to the material provisions of any such policy or has failed to give any notice or present any known claim thereunder in a due and timely fashion. Each
material Property of HCBI and HCB is insured for the benefit of HCBI and HCB in amounts deemed adequate by HCBI’s and HCB’s respective management against risks customarily insured against. Except as set forth in
Confidential Schedule
3.15
, there have been no claims under any fidelity bonds of HCBI and HCB since March 31, 2012 and to the Best Knowledge of HCBI, there are no facts that would reasonably be expected to form the basis of a claim under such bonds.
Section 3.16.
No Material Adverse Change
. Except as disclosed in the representations and warranties made in this ARTICLE III
and the Confidential Schedules hereto, there has not been any Material Adverse Change with respect to HCBI or HCB since March 31, 2014, nor to the Best Knowledge of HCBI, has any event occurred that has resulted in, or has a reasonable
probability of resulting in the future in, a Material Adverse Change with respect to HCBI or HCB.
Section 3.17.
Proprietary Rights
. HCBI and HCB do not require the use of any material patent, patent application, patent right, invention, process, trademark (whether registered or unregistered), trademark application, trademark right, trade name, service
name, service mark, copyright or any trade secret (collectively, “
Proprietary Rights
”) for the business or operations of HCBI and HCB that are not owned, held or licensed by HCBI or HCB. HCBI and HCB have not received within the
past three years any written notice of infringement of or conflict with the rights of others with respect to the use by HCBI or HCB of Proprietary Rights. There is no claim or action by any such person pending or, to the Best Knowledge of HCBI,
threatened, with respect thereto.
22
Section 3.18.
Transactions with Certain Persons and Entities
. Except as set
forth in
Confidential Schedule 3.18
, neither HCBI nor HCB owes any amount to (excluding deposit liabilities), or has any loan, contract, lease, commitment or other obligation from or to, any of the present or former directors or officers
(other than compensation for current services not yet due and payable and reimbursement of expenses arising in the ordinary course of business) of HCBI or HCB, and none of such persons owes any amount to HCBI or HCB. There are no agreements,
instruments, commitments, extensions of credit, tax sharing or allocation agreements or other contractual agreements of any kind between or among HCBI, whether on its own behalf or in its capacity as trustee or custodian for the funds of any
Employee Plan, and any of its Affiliates (as defined in Section 11.10).
Section 3.19.
Evidences of
Indebtedness
. All evidences of indebtedness and leases that are reflected as assets of HCBI and HCB are legal, valid and binding obligations of the respective obligors thereof, enforceable in accordance with their respective terms (except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and the availability of injunctive relief, specific performance and other equitable remedies), and are not subject to any
asserted or, to the Best Knowledge of HCBI, threatened, defenses, offsets or counterclaims that may reasonably be asserted against HCBI, HCB or the present holder thereof. The credit and collateral files of HCB contain all material information
(excluding general, local or national industry, economic or similar conditions) actually known to HCBI or HCB that is required to evaluate, in accordance with generally prevailing practices in the banking industry, the collectability of the loan
portfolio of HCB (including loans that will be outstanding if HCB advances funds it is obligated to advance), except for items identified on HCB’s internal exception list which has been made available to IBG. All loans classified substandard,
doubtful, loss, nonperforming or problem loans internally by management of HCB or any applicable Regulatory Agency (as defined in Section 11.10) are set forth on HCB’s watch list, which is set forth in
Confidential Schedule 3.19
.
Notwithstanding anything to the contrary contained in this Section, no representation or warranty is being made as to the sufficiency of collateral securing, or the collectability of, the loans of HCB.
Section 3.20.
Employee Relationships
. Each of HCBI and HCB has complied in all material respects with all applicable material
laws relating to its relationships with its employees, and HCBI believes that the relationship between HCB and its employees is good. To the Best Knowledge of HCBI, no key executive officer or manager of any of the operations of HCB or any group of
employees of HCB has or have any present plans to terminate their respective employment with HCB.
Confidential Schedule 3.20
also contains a list of all employees of HCB and their respective annual compensation.
Section 3.21.
Condition of Assets
. All tangible assets used by HCBI and HCB are in good operating condition, ordinary wear
and tear excepted, and conform, in all material respects, with all applicable ordinances, regulations, zoning and other laws, whether federal, state or local. None of HCB’s premises or equipment is in need of maintenance or repairs other than
ordinary routine maintenance or repairs that are not material in nature or cost.
23
Section 3.22.
Environmental Compliance
. Except as set forth in
Confidential
Schedule 3.22
:
A. HCBI and HCB and all of their Properties and operations are in material compliance with all applicable
Environmental Laws (as defined in Section 11.10). HCBI has not received any written notice of any past, present, or future conditions, events, activities, practices or incidents that would reasonably be expected to materially interfere with or
prevent the compliance of HCBI and HCB with all applicable Environmental Laws.
B. HCBI and HCB have obtained all material
permits, licenses and authorizations that are required under all applicable Environmental Laws.
C. No Hazardous Materials (as
defined in Section 11.10) exist on, about or within any of the Properties, nor, to the Best Knowledge of HCBI, have any Hazardous Materials previously existed on, about or within or been used, generated, stored, transported, disposed of, on or
released from any of the Properties, except as would not be expected to have or cause a Material Adverse Change. The use that HCBI and HCB make of the Properties will not result in the use, generation, storage, transportation, accumulation, disposal
or release of any Hazardous Material on, in or from any of the Properties, except as would not be expected to have or cause a Material Adverse Change.
D. There is no action, suit, proceeding, investigation, or inquiry before any Governmental Authority pending or, to the Best Knowledge of HCBI, threatened, against HCBI or HCB relating in any way to any
Environmental Law. HCB has no liability for remedial action under any Environmental Law. HCBI and HCB have not received any written request for information by any Governmental Authority with respect to the condition, use or operation of any of the
Properties nor has HCBI or HCB received any written notice from any Governmental Authority or other person with respect to any violation of or claimed or potential liability of any kind under any Environmental Law (including any letter, notice or
inquiry from any person or Governmental Authority informing HCBI or HCB that it is or may be liable in any way under any Environmental Laws or requesting information to enable such a determination to be made).
Section 3.23.
Regulatory Compliance
.
A. Neither HCBI nor HCB is now nor has been, since March 31, 2012, (i) subject to any cease-and-desist or other order or enforcement action issued by, (ii) a party to any written agreement,
consent agreement or memorandum of understanding with, (iii) a party to any commitment letter or similar undertaking to, (iv) subject to any order or directive by, (v) ordered to pay any civil penalty by, (vi) a recipient of a
supervisory letter from, or (vii) subject to any board resolutions adopted at the request or suggestion of, any Regulatory Agency or other Governmental Authority that restricts the conduct of its business or that relates to its capital
adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business (each of the items set forth in the preceding clauses (i) through (vii), a “
Regulatory Agreement
”). There are no
pending or, to the Best Knowledge of HCBI, threatened investigations by any Regulatory Agency that would reasonably result in a Regulatory Agreement with respect to HCBI or HCB.
B. All reports, records, registrations, statements, notices and other documents or information required to be filed by HCBI and HCB with
any Regulatory Agency have been duly and timely filed and, to the Best Knowledge of HCBI, all information and data contained in such reports, records or other documents are true, accurate, correct and complete in all material respects.
24
Section 3.24.
Absence of Certain Business Practices
. Neither HCBI nor HCB nor
any of their respective officers, employees or agents, nor any other person acting on their behalf, has, directly or indirectly, since March 31, 2012, given or agreed to give any gift or similar benefit to any customer, supplier, governmental
employee or other person who is or may be in a position to help or hinder the business of HCBI or HCB (or assist HCBI or HCB in connection with any actual or proposed transaction) that (A) may reasonably be expected to subject HCBI or HCB to
any damage or penalty in any civil, criminal or governmental litigation or proceeding, (B) if not given in the past, may reasonably have resulted in a Material Adverse Change or (C) if not continued in the future may reasonably be expected
to result in a Material Adverse Change or may reasonably be expected to subject HCBI or HCB to suit or penalty in any private or governmental litigation or proceeding.
Section 3.25.
Books and Records
. The minute books, stock certificate books and stock transfer ledgers of HCBI and HCB have been kept accurately in the ordinary course of business and are
complete and correct in all material respects. The transactions entered therein represent bona fide transactions, and there have been no material transactions involving the business of HCBI and HCB that properly should have been set forth therein
and that have not been accurately so set forth.
Section 3.26.
Forms of Instruments, Etc
. HCBI has made and will
make available to IBG copies of all of HCB’s standard forms of notes, mortgages, deeds of trust and other routine documents of a like nature used on a regular and recurring basis in the ordinary course of its business.
Section 3.27.
Fiduciary Responsibilities
. Each of HCBI and HCB has performed in all material respects all of its duties as a
trustee, custodian, guardian or as an escrow agent in a manner that complies in all material respects with all applicable laws, regulations, orders, agreements, instruments and common law standards, where the failure to so perform would result in a
Material Adverse Change.
Section 3.28.
Guaranties
. Except in the ordinary course of business, according to past
business practices and in material compliance with applicable law, HCBI or HCB have not guaranteed the obligations or liabilities of any other person, firm or corporation.
Section 3.29.
Employee Benefit Plans
.
A. Set forth on
Confidential Schedule 3.29
is a complete and correct list of all “employee benefit plans” (as defined in Section 3(3) of ERISA), all specified fringe benefit plans as defined in Code § 6039D, and all other bonus,
incentive, compensation, retention, deferred compensation, profit sharing, stock option, stock appreciation right, stock bonus, stock purchase, employee stock ownership, savings, severance, supplemental unemployment, layoff, salary continuation,
retirement, pension, health, life insurance, disability, group insurance, vacation, holiday, sick leave, fringe benefit or welfare plan, or any other similar plan, agreement, policy or understanding (whether written or oral, qualified or
nonqualified, currently effective or
25
terminated), and any trust, escrow or other agreement related thereto, which (a) is currently maintained or contributed to by HCBI or HCB, or with respect to which HCBI or HCB has any
liability, and (b) provides benefits to any officer, employee, service provider, former officer or former employee of HCBI or HCB, or the dependents of any thereof, regardless of whether funded or unfunded (herein collectively the
“
Employee Plans
” and each individually an “
Employee Plan
”).
B. No Employee Plan is a
defined benefit plan within the meaning of Section 3(35) of ERISA. HCBI has delivered or made available to IBG true, accurate and complete copies of the documents comprising each Employee Plan and any related trust agreements, annuity
contracts, insurance policies or any other funding instruments (“
Funding Arrangements
”), any contracts with independent contractors (including actuaries and investment managers) that relate to any Employee Plan, the Form 5500 filed
with the IRS in each of the three (3) most recent plan years with respect to each Employee Plan, and related schedules and opinions, and such other documents, records or other materials related thereto, as reasonably requested by IBG. There
have been no prohibited transactions (described under ERISA § 406 or Code § 4975(c)), breaches of fiduciary duty or any other breaches or violations of any law applicable to the Employee Plans and related Funding Arrangements
that would reasonably be expected to subject IBG, Independent Bank, HCBI or HCB to any material taxes, penalties or other liabilities. Each Employee Plan that is represented to be qualified under Code § 401(a) has a current favorable
determination or opinion letter, and does not have any amendments for which the remedial amendment period under Code § 401(b) has expired. All reports, descriptions and filings required by the Code, ERISA or any government agency with
respect to each Employee Plan have been timely and completely filed or distributed. Each Employee Plan has been operated in material compliance with applicable law or in accordance with its terms. There are no pending claims, lawsuits or actions
relating to any Employee Plan (other than ordinary course claims for benefits) and, to the Best Knowledge of HCBI, none are threatened. No written or, to the Best Knowledge of HCBI, oral representations have been made by HCBI or HCB to any employee
or former employee of HCBI or HCB promising or guaranteeing any employer payment or funding for the continuation of medical, dental, life or disability coverage for such person, their dependent, or any beneficiary for any period of time beyond the
end of the current plan year or beyond termination of employment (except to the extent of coverage required under Code § 4980B or applicable state law). Compliance with FAS 106 will not create any material change to the HCBI Financial
Statements or the HCB Call Reports. Except to the extent that the payment would constitute an “excess parachute payment” under Code § 280G, there are no contracts or arrangements providing for payments that will be nondeductible
or subject to excise tax under Code § § 4999 or 280G, nor will IBG or Independent Bank be required to “gross up” or otherwise compensate any person because of the limits contained in such Code sections. There are no
surrender charges, penalties, or other costs or fees that would reasonably be expected to be imposed by any person against HCBI, HCB, an Employee Plan, or any other person, including an Employee Plan participant or beneficiary, as a result of the
consummation of the transactions contemplated by this Agreement with respect to any insurance, annuity or investment contracts or other similar investment held by any Employee Plan.
26
C. With respect to each “employee benefit plan” (as defined in ERISA) maintained
or contributed to or required to be contributed to, currently or in the past, by any trade or business with which HCBI or HCB is required by any of the rules contained in the Code or ERISA to be treated as a single employer (“
Controlled
Group Plans
”):
(i) All Controlled Group Plans which are “group health plans” (as defined
in the Code and ERISA) have been operated before the Closing such that failures to operate such group health plans in compliance, in all material respects, with Part 6 of Subtitle B of Title 1 of ERISA and Code § § 4980B and 4980D
would not reasonably be expected to subject HCBI or HCB to liability;
(ii) There is no Controlled Group Plan
that is a defined benefit plan (as defined in Section 3(35) of ERISA), nor has there been a Controlled Group Plan that is a defined benefit plan in the last five (5) calendar years; and
(iii) There is no Controlled Group Plan that is a “multiple employer plan” or “multi-employer plan”
(as either such term is defined in ERISA), nor has there been a Controlled Group Plan that is either a multiple employer plan or multi-employer plan since 2007.
D. All Employee Plan documents, annual reports or returns, audited or unaudited financial statements, actuarial valuations, summary annual reports, and summary plan descriptions issued with respect to the
Employee Plans are correct, complete, and current in all material respects, have been timely filed, and there have been no material changes in the information set forth therein.
E. All contributions (including all employer contributions, employee salary reduction contributions and all premiums or other payments
(other than claims)) that are due have been made with respect to each Employee Plan.
Section 3.30.
No Excess
Parachute Payments
. No amount, whether in cash or property or vesting of property, that will be received by or benefit provided to, any officer, director or employee of HCBI, HCB or any of their respective Affiliates who is a “disqualified
individual” (as such term is defined in Treasury Regulation § 1.280G-1) under any employment, severance or termination agreement, other compensation arrangement or benefit plan currently in effect will be an “excess parachute
payment” (as such term is defined in Code § 280G(b)(1)) solely as a result of the transactions contemplated by this Agreement; and no such person is entitled to receive any additional payment from HCBI, HCB, or IBG if that the excise
tax of Code § 4999(a) is imposed on such person.
Section 3.31.
Bank Secrecy Act, Foreign Corrupt Practices Act
and U.S.A. Patriot Act
. HCB is in material compliance with the Bank Secrecy Act (12 U.S.C. §§ 1730(d) and 1829(b)), the United States Foreign Corrupt Practices Act and the International Money Laundering Abatement and Anti-Terrorist
Financing Act, otherwise known as the U.S.A. Patriot Act, and all regulations promulgated thereunder. HCB has properly certified all foreign deposit accounts and has made all necessary tax withholdings on all of its deposit accounts; furthermore,
HCB has timely and properly filed and maintained all requisite Currency Transaction Reports and other related forms, including any requisite Custom Reports required by any agency of the United States Treasury Department, including the IRS. HCB has
timely filed all Suspicious Activity
27
Reports with the Financial Institutions – Financial Crimes Enforcement Network (U.S. Department of the Treasury) required to be filed by it pursuant to the laws and regulations referenced in
this Section.
Section 3.32.
Data Processing Agreements
. HCB obtains its data processing services, ATM, and other
information technology services exclusively through the contracts or agreements with the persons or entities described on
Confidential Schedule 3.32
(“
DP Contracts
”). A true and correct executed copy of each DP Contract, as
in effect as of the date hereof, has been provided to IBG. Other than the DP Contracts, HCBI has no agreement with any other person or entity for data processing, ATM or other technology services.
Section 3.33.
Dissenting Shareholders
. To the Best Knowledge of HCBI, there is no plan or intention on the part of any
shareholders of HCBI to exercise their appraisal rights in the manner provided by applicable law.
Section 3.34.
Fair
Housing Act, Home Mortgage Disclosure Act and Equal Credit Opportunity Act and Flood Disaster Protection Act
. HCB is in compliance in all material respects with the Fair Housing Act (42 U.S.C. § 3601 et seq.), the Home Mortgage Disclosure
Act (12 U.S.C. § 2801 et seq.), the Equal Credit Opportunity Act (15 U.S.C. § 1691 et seq.), and the Flood Disaster Protection Act (42 USC § 4002, et seq.), and all regulations promulgated thereunder. Since December 31, 2010,
HCBI has not received any written notices of any violation of such acts or any of the regulations promulgated thereunder, and it has not received any written notice of any, and to the Best Knowledge of HCB there is no, threatened administrative
inquiry, proceeding or investigation with respect to its compliance with such laws.
Section 3.35.
Usury Laws and
Other Consumer Compliance Laws
. All loans of HCB have been made in compliance in all material respects with all applicable statutes and regulatory requirements at the time of such loan or any renewal thereof, including the Texas usury statutes
as currently interpreted, Regulation Z (12 C.F.R. § 226 et seq.) issued by the Board of Governors of the Federal Reserve System (“
FRB
”), the Federal Consumer Credit Protection Act (15 U.S.C. § 1601 et seq.), the Texas
Consumer Credit Code (Tex. Rev. Civ. Stat. Ann. Art. 5062-2.01, et seq.) and all statutes governing the operation of banks operating in the State of Texas. Each such loan was made by HCB in the ordinary course of its lending business.
Section 3.36.
Zoning and Related Laws
. All real property owned or operated by HCB and the use thereof is in compliance with
all applicable laws, ordinances, regulations, orders or requirements, including building, zoning and other laws, except where the failure, whether individually or in the aggregate, to be so in compliance would not reasonably be expected to cause a
Material Adverse Change.
Section 3.37.
Business Combination
. This Agreement and the transactions contemplated
hereby are exempt from the requirements of Subchapter M of Chapter 21 of the TBOC and any other applicable state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares.
Section 3.38.
Representations Not Misleading
. No representation or warranty by HCBI and HCB contained in this Agreement
contains or will contain on the Closing Date any untrue
28
statement of a material fact or omits or will omit on the Closing Date to state a material fact necessary to make the statements contained herein, in light of the circumstances under which they
were made, not misleading. To the Best Knowledge of HCBI, all written statements, exhibits, schedules, and other documents furnished to IBG by HCBI or HCB as part of the due diligence for this Agreement are accurate in all material respects.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IBG
IBG hereby makes the following
representations and warranties to HCBI. IBG agrees to provide to HCBI at the Closing supplemental disclosure schedules reflecting any material changes to the representations and warranties set forth herein between the date of this Agreement and the
Closing Date.
Section 4.01.
Organization
. IBG is a registered bank holding company under the Bank Holding Company
Act of 1956, as amended. IBG is a corporation duly organized, validly existing and in good standing under the laws, rules and regulations of the State of Texas. IBG has all requisite corporate power and authority to own Independent Bank as now owned
and to enter into and carry out its obligations under this Agreement, the Merger Agreement and the Subsequent Merger Documents. True and complete copies of the Amended and Restated Certificate of Formation and Bylaws of IBG, as amended to date, have
been made available to HCBI. IBG is the sole beneficial and record owner of all of the issued and outstanding shares of capital stock of Independent Bank, free and clear of all liens, security interests, and encumbrances of any kind or character,
and no other person or entity has any equity or other ownership interest in Independent Bank.
Section 4.02.
Execution
and Delivery
. IBG has full corporate power and authority to execute and deliver this Agreement, the Merger Agreement and the Subsequent Merger Documents, and to consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement, the Merger Agreement and the Subsequent Merger Documents and (if the required regulatory approvals are obtained) the consummation of the transactions contemplated hereby and thereby, have been duly and validly approved by
the IBG Board. Except for the written consent of IBG as the sole shareholder of Newco, no other corporate proceedings on the part of IBG are necessary to approve this Agreement, the Merger Agreement or the Subsequent Merger, and to consummate the
transactions contemplated hereby and thereby. This Agreement, the Merger Agreement, the Subsequent Merger Documents, and the other agreements and documents contemplated hereby and thereby have been, or at Closing will be, duly and validly executed
and delivered to HCBI, and each constitutes or at Closing will constitute a valid and binding obligation of IBG, enforceable against IBG in accordance with its terms and conditions, except as enforceability may be limited by bankruptcy,
conservatorship, insolvency, moratorium, reorganization, receivership or similar laws and judicial decisions affecting the rights of creditors generally and by general principles of equity (whether applied in a proceeding at law or in equity).
Section 4.03.
IBG Capitalization
. The authorized capital of IBG consists of 100,000,000 common shares, $0.01 par
value per share, of which 16,369,321 shares are outstanding as of the date of this Agreement and 10,000,000 preferred shares, $0.01 per share, of which 23,938.35
29
shares of Senior Non-Cumulative Perpetual Preferred Stock, Series A were issued or outstanding as of the date of this Agreement. All of such issued shares are validly issued, fully paid and
nonassessable. Except as set forth in
Confidential Schedule 4.03
, there are no (A) other outstanding equity securities of any kind or character, or (B) outstanding subscriptions, options, convertible securities, rights, warrants,
calls or other agreements or commitments of any kind issued or granted by, or binding upon, IBG to purchase or otherwise acquire any security of or equity interest in IBG, obligating IBG to issue any shares of, restricting the transfer of, or
otherwise relating to shares of its capital of any class except as set forth in
Confidential Schedule 4.03
. There are no outstanding contractual obligations of IBG to vote or dispose of any IBG Shares. There are no shareholder agreements,
voting trusts or similar agreements relating to the IBG Shares. All of the issued and outstanding IBG Shares have been duly authorized, validly issued and are fully paid and nonassessable, and have not been issued in violation of the preemptive
rights of any person. All of the IBG Shares have been issued in material compliance with the securities laws of the United States and other jurisdictions having applicable securities laws. There are no restrictions applicable to the payment of
dividends on the IBG Shares except pursuant to applicable laws and regulations, and all dividends declared before the date of this Agreement have been paid.
Section 4.04.
Independent Bank
.
A. Independent Bank is a Texas
banking association, duly organized, validly existing and in good standing under the laws of the State of Texas and the United States. Independent Bank has all requisite corporate power and authority (including all licenses, franchises, permits and
other governmental authorizations as are legally required) to carry on its business as now being conducted, to own, lease and operate its properties and assets as now owned, leased or operated and to enter into and to carry on the business and
activities now conducted by it. True and complete copies of the Amended and Restated Certificate of Formation and Bylaws of Independent Bank, as amended to date, have been delivered to HCBI. Independent Bank is an insured bank as defined in the
FDIA. The nature of the business of Independent Bank does not require it to be qualified to do business in any jurisdiction other than the State of Texas. Except as set forth in
Confidential Schedule 4.04(A)
, Independent Bank has no equity
interest, direct or indirect, in any other bank or corporation or in any partnership, joint venture or other business enterprise or entity, except as acquired through settlement of indebtedness, foreclosure, the exercise of creditors’ remedies
or in a fiduciary capacity, and the business carried on by Independent Bank has not been conducted through any other direct or indirect Subsidiary or Affiliate of Independent Bank.
B. The authorized capital stock of Independent Bank consists of 2,000,000 shares of common stock, $1.00 par value per share, of which
985,930 shares are issued and outstanding as of the date of this Agreement. IBG is in possession of all certificates evidencing all of the shares of capital stock of Independent Bank. All of the outstanding shares of capital stock or other
securities evidencing ownership of Independent Bank are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of the preemptive rights of any person and have been issued in material compliance with
applicable securities laws. There are no restrictions applicable to the payment of dividends on the shares of the capital stock of Independent Bank, except pursuant to applicable laws and regulations, and all dividends declared before the date of
this Agreement on such capital stock have been paid. There are no
30
(A) other outstanding equity securities of any kind or character, or (B) outstanding subscriptions, contracts, options, convertible securities, preemptive rights, warrants, calls or other
agreements or commitments of any kind issued or granted by, binding upon or otherwise obligating Independent Bank to issue, sell or otherwise dispose of, or to purchase, redeem or otherwise acquire, any shares of capital stock of Independent Bank.
There are no outstanding contractual obligations of Independent Bank to vote or dispose of any shares of capital stock of Independent Bank. There are no shareholder agreements, voting trusts or similar agreements relating to the capital stock of
Independent Bank.
Section 4.05.
Authorized and Outstanding Shares of Newco
. The authorized capital of Newco will
consist of 1,000 common shares, $1.00 par value per share (the “
Newco Shares
”). On the date the Merger Agreement is executed and delivered and on the Closing Date, 1,000 Newco Shares will be issued and outstanding.
Section 4.06.
Compliance with Laws, Permits and Instruments
. IBG, Independent Bank and Newco, and their respective employees
and agents, hold all material licenses, registrations, franchises, permits and authorizations necessary for the lawful conduct of their respective businesses. IBG and its Subsidiaries are in compliance in all material respects with all applicable
federal, state and local laws, rules, regulations and orders applicable to them except where the failure, whether individually or in the aggregate to be so in compliance is not reasonably expected to cause a Material Adverse Change. IBG is in
material compliance with all applicable listing and corporate governance rules of the NASDAQ.
Section 4.07.
Consents
and Approvals
. Except for regulatory and other approvals as disclosed in
Confidential Schedule 4.07
, no approval, consent, order or authorization of, or registration, declaration or filing with, any Governmental Authority or other third
party is required on the part of IBG in connection with the execution, delivery or performance of this Agreement or the agreements contemplated hereby, including the Merger Agreement or the consummation by IBG of the transactions contemplated hereby
or thereby.
Section 4.08.
Regulatory Approval; Call Reports
. IBG is “well capitalized” as defined by
federal regulations as of the date hereof. Independent Bank has a Community Reinvestment Act rating of “satisfactory”. Neither IBG nor Independent Bank is subject to any Regulatory Agreement, nor is IBG aware of any circumstance or event
that would reasonably result in a Regulatory Agreement with respect to IBG or Independent Bank. IBG reasonably believes that it will be able to obtain all requisite regulatory approvals necessary to consummate the Merger. All reports, records,
registrations, statements, notices and other documents or information required to be filed by IBG and Independent Bank with any Regulatory Agency have been duly and timely filed and, to the Best Knowledge of IBG, all information and data contained
in such reports, records or other documents are true, accurate, correct and complete in all material respects. IBG has made available to HCBI true and complete copies of the Reports of Condition and Income for Independent Bank filed during 2014 and
2013 (“
Independent Bank Call Reports
”). Each of the Independent Bank Call Reports fairly presents, in all material respects, the financial position of Independent Bank and the results of its operations at the dates and for the
periods indicated therein in conformity, in all material respects, with the instructions for the preparation of Independent Bank Call Reports as promulgated by applicable regulatory authorities.
31
Section 4.09.
Undisclosed Liabilities
. IBG and Independent Bank have no material
liability or obligation, accrued, absolute, contingent or otherwise and whether due or to become due (including unfunded obligations under any Employee Plan or liabilities for federal, state or local taxes or assessments) that are not reflected in
or disclosed in the IBG SEC Reports (as defined in Section 4.12) or the Independent Bank Call Reports, except (A) those liabilities, obligations and expenses incurred in the ordinary course of business and materially consistent with past
business practices since March 31, 2014, (B) liabilities, obligations and expenses incurred as a result of or arising from this Agreement or any other agreement or document contemplated hereby, or any of the transactions contemplated
hereby or thereby, or (C) liabilities, obligations and expenses as disclosed on
Confidential Schedule 4.09
.
Section 4.10.
No Violation
. Neither the execution and delivery of this Agreement nor the consummation of the transactions
contemplated hereby, nor compliance by IBG or Independent Bank with any of the terms or provisions hereof or thereof (if the required regulatory and shareholder approvals are obtained) will (i) violate any provision of the charters, articles,
certificates or bylaws of IBG or Independent Bank; (ii) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to IBG or Independent Bank or any of their respective properties or assets;
(iii) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or the lapse of time, or both, would constitute a default) under, result in the
termination or cancellation under, accelerate the performance required by or rights or obligations under, or result in the creation of any lien upon any of the respective properties or assets of IBG, or Independent Bank under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement, contract or other instrument or obligation to which IBG or Independent Bank is a party, or by which IBG or Independent Bank or any of their
respective properties, assets or business activities, may be bound or subject.
Section 4.11.
Litigation
. Except
as disclosed in
Confidential Schedule 4.11
, neither IBG nor Independent Bank are parties to any, and there are no pending or, to the Best Knowledge of IBG, threatened, legal, administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against IBG or Independent Bank which are reasonably likely, individually or in the aggregate, to result in a Material Adverse Change, nor, to the Best Knowledge of IBG, is there any basis for
any proceeding, claim or any action against IBG or Independent Bank that would be reasonably likely, individually or in the aggregate, to result in a Material Adverse Change. There is no injunction, order, judgment or decree imposed upon IBG or
Independent Bank or the assets or properties of IBG or Independent Bank that has resulted in, or is reasonably likely to result in, a Material Adverse Change.
Section 4.12.
SEC Filings; Financial Statements; Internal Controls
.
A. IBG has timely filed and made available to HCBI all documents required to be filed by IBG since April 1, 2013 (the “
IBG
SEC Reports
”). Except as set forth in
Confidential Schedule 4.12
, the IBG SEC Reports, including any IBG SEC Reports filed after the date of this Agreement until the Effective Time, at the time filed (or, if amended or superseded by
a filing before the date of this Agreement, then on the date of such filing) (A) complied in all material respects with the applicable requirements of the U.S. federal securities laws and other applicable laws, statutes, rules and regulations,
and (B) did not contain any untrue
32
statement of a material fact or omit to state a material fact required to be stated in such IBG SEC Reports or necessary in order to make the statements in such IBG SEC Reports, in light of the
circumstances under which they were made, not misleading. As of the date of this Agreement, there are no outstanding or unresolved comments received from the SEC staff with respect to the IBG SEC Reports. To the Best Knowledge of IBG, none of the
IBG SEC Reports is the subject of ongoing SEC review or investigation.
B. Each of the IBG financial statements (including, in
each case, any related notes) contained in the IBG SEC Reports, including any IBG SEC Reports filed after the date of this Agreement until the Effective Time, complied as to form in all material respects with the applicable published rules and
regulations of the SEC with respect thereto, was prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or, in the case of unaudited
interim statements, as permitted by Form 10-Q of the SEC), and fairly presented in all material respects the consolidated financial position of IBG and its Subsidiaries as at the respective dates and the consolidated results of operations and cash
flows for the periods indicated, except that the unaudited interim consolidated financial statements were or are subject to normal and recurring year-end adjustments which were not or are not expected to be material in amount or effect.
C. IBG has not been notified by its independent public accounting firm that such accounting firm is of the view that any of financial
statements should be restated which has not been restated in subsequent financial statements or that IBG should modify its accounting in future periods.
D. Since December 31, 2012, none of IBG nor any of its Subsidiaries, nor, to IBG’s Best Knowledge any director, officer or employee of IBG or any of its Subsidiaries or any auditor, accountant
or representative of IBG or any of its Subsidiaries, has received any complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of IBG or any of its
Subsidiaries or their respective internal accounting controls, including any complaint, allegation, assertion or claim that IBG or any of its Subsidiaries has engaged in questionable accounting or auditing practices. No attorney representing IBG or
any of its Subsidiaries, whether or not employed by IBG or any of its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by IBG, any of its Subsidiaries or any of their
officers, directors, employees or agents to IBG’s or any of its Subsidiaries’ board of directors or any committee thereof or to any director or officer of IBG or any of its Subsidiaries. Since December 31, 2012, there have been no
internal investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial officer, individuals performing similar functions, IBG’s or any of its
Subsidiaries’ board of directors or any committee thereof.
E. There are no outstanding loans made by IBG or any of its
Subsidiaries to any executive officer or director of IBG, other than loans that are subject to and in compliance with Regulation O under the Federal Reserve Act.
33
Section 4.13.
Taxes and Tax Returns
.
A. IBG and its Subsidiaries have duly and timely filed or caused to be filed all federal, state, foreign and local tax returns and
reports required to be filed by them on or before the date of this Agreement (all such returns and reports being accurate and complete in all material respects) and have duly paid or caused to be paid on their behalf all taxes that are due and
payable by them on or before the date of this Agreement, other than taxes that are being contested in good faith and are adequately reserved against or provided for (in accordance with GAAP) on their respective financial statements. As of the date
hereof, IBG and its Subsidiaries have no material liability for taxes in excess of the amount reserved or provided for on their respective financial statements as of the date thereof.
B. There are no disputes pending with respect to, or claims or assessments asserted in writing for, any material amount of taxes upon IBG
or any of its Subsidiaries, nor has IBG or any of its Subsidiaries given or been requested in writing to give any currently effective waivers extending the statutory period of limitation applicable to any tax return for any period.
C. Proper and accurate amounts, if required, have been withheld by IBG and its Subsidiaries from their respective employees, independent
contractors, creditors, shareholders or other third parties for all periods in material compliance with the tax withholding provisions of applicable law.
D. Since December 31, 2010, the federal income tax returns of IBG and its Subsidiaries have not been audited or examined and no such audit is currently pending or, to the Best Knowledge of IBG,
threatened.
E. Except as set forth in
Confidential Schedule 4.13
, neither IBG nor any of its Subsidiaries has entered
into any tax sharing agreement, tax allocation agreement, tax indemnity agreement, or similar contract or arrangement or any current or potential contractual obligation to indemnify any other person with respect to taxes that will require any
payment by IBG or any of its Subsidiaries after the date of this Agreement.
F. IBG has delivered or made available to HCBI
correct and complete copies of all material, U.S. federal income tax returns filed by IBG with the IRS, examination reports and statements of deficiency assessed against or agreed to by IBG and Independent Bank, if any, in each case with respect to
any taxable period beginning on or after December 31, 2010.
Section 4.14.
Compensation and Benefit Plans
.
The employee pension benefit plans and welfare plans that are sponsored, maintained or contributed to by IBG or its Subsidiaries have all been operated in all material respects in compliance with ERISA, the Code and any other applicable laws.
Neither IBG nor any of its Subsidiaries has any material liability for any unfunded benefit liabilities, whether or not waived, under such plans. Neither IBG nor any of its Subsidiaries contributes or has within the last 6 years contributed to any
multiemployer plan.
Section 4.15.
Bank Secrecy Act, Foreign Corrupt Practices Act and U.S.A. Patriot Act
.
Independent Bank is in material compliance with the Bank Secrecy Act (12 U.S.C. §§ 1730(d) and 1829(b)), the United States Foreign Corrupt Practices Act and the International Money Laundering Abatement and Anti-Terrorist Financing Act,
otherwise known as the U.S.A. Patriot
34
Act, and all regulations promulgated thereunder. Independent Bank has properly certified all foreign deposit accounts and has made all necessary tax withholdings on all of its deposit accounts;
furthermore, Independent Bank has timely and properly filed and maintained all requisite Currency Transaction Reports and other related forms, including any requisite Custom Reports required by any agency of the United States Treasury Department,
including the IRS. Independent Bank has timely filed all Suspicious Activity Reports with the Financial Institutions – Financial Crimes Enforcement Network (U.S. Department of the Treasury) required to be filed by it pursuant to the laws and
regulations referenced in this Section.
Section 4.16.
No Material Adverse Change
. Except as disclosed in the
representations and warranties made in this ARTICLE IV and the
Confidential Schedules
hereto, there has not been any Material Adverse Change with respect to IBG or Independent Bank since March 31, 2014, nor to the Best Knowledge of IBG,
has any event occurred that has resulted in, or has a reasonable probability of resulting in the future in, a Material Adverse Change with respect to IBG or Independent Bank.
Section 4.17.
Financing
. IBG has, or at the Closing will have, sufficient cash on hand which is uncommitted as to any other use, or a credit facility with sufficient availability, to pay the
Aggregate Cash Consideration.
Section 4.18.
Representations Not Misleading
. No representation or warranty by IBG
contained in this Agreement contains or will contain on the Closing Date any untrue statement of a material fact or omits or will omit on the Closing Date to state a material fact necessary to make the statements contained herein, in light of the
circumstances under which they were made, not misleading. To the Best Knowledge of IBG, all written statements, exhibits, schedules, and other documents furnished to HCB by IBG or Independent Bank as part of the due diligence for this Agreement are
accurate in all material respects.
ARTICLE V
COVENANTS OF HCBI
HCBI covenants and agrees with IBG as follows:
Section 5.01.
Commercially Reasonable Efforts
. HCBI will use commercially reasonable efforts to cause the
consummation of the transactions contemplated hereby in accordance with the terms and conditions of this Agreement.
Section 5.02.
Information for Regulatory Applications and Registration Statement
.
A. HCBI shall use its commercially reasonable efforts to promptly furnish IBG with all information concerning HCBI that is required for
inclusion in any application, statement or document to be made or filed by IBG with any federal or Texas regulatory or supervisory authority in connection with the transactions contemplated by this Agreement during the pendency of this Agreement.
HCBI shall have the right to review in advance, and to the extent practicable consult with IBG, in each case subject to applicable laws relating to the exchange of information, with respect to all written information submitted to any third party or
any federal or Texas regulatory or Governmental Authority supervisory authority in connection with the transactions contemplated by this Agreement, but IBG shall not be required to provide
35
HCBI with confidential portions of any filing with a federal or Texas regulatory or Governmental Authority. In exercising the foregoing right, HCBI agrees to act reasonably and as promptly as
practicable.
B. HCBI agrees that none of the information supplied or to be supplied by it for inclusion or incorporation by
reference in (i) the Registration Statement shall, at the time the Registration Statement and each amendment or supplement thereto, if any, becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Proxy Statement and any amendment or supplement thereto shall, at the date(s) of mailing to shareholders and at the time
of the Meeting, and (iii) any other filings made under applicable federal or Texas banking or securities laws and regulations, shall contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. HCBI further agrees that if it shall become aware before the effectiveness of the Registration Statement of any information furnished by such party that would cause any of the
statements in the Registration Statement or the Proxy Statement to be false or misleading with respect to any material fact, or to omit to state any material fact necessary to make the statements therein not false or misleading, to promptly inform
IBG thereof and to take the necessary steps to correct the Registration Statement or the Proxy Statement.
Section 5.03.
Affirmative Covenants
. Except as otherwise permitted or required by this Agreement, from the date hereof until the Effective Time, HCBI shall and shall cause HCB to:
A. Maintain its corporate existence in good standing;
B. Maintain the general
character of its business and conduct its business in its ordinary and usual manner;
C. Extend credit only in accordance with
existing lending policies and practices;
D. Use commercially reasonable efforts to preserve its business organization intact;
to retain the services of its present employees, officers, directors and agents; to retain its present customers, depositors, suppliers and correspondent banks; and to preserve its goodwill and the goodwill of its suppliers, customers and others
having business relationships with it;
E. Use commercially reasonable efforts to obtain any approvals or consents required to
maintain all existing contracts, leases and documents relating to or affecting its assets, Properties and business;
F.
Maintain all offices, machinery, equipment, materials, supplies, inventories, vehicles and other Properties owned, leased or used by it (whether under its control or the control of others) in good operating repair and condition, ordinary wear and
tear excepted;
G. Comply in all material respects with all laws, regulations, ordinances, codes, orders, licenses, and
permits applicable to its Properties and operations, the non-compliance with which would reasonably be expected to cause a Material Adverse Change;
36
H. Timely file all tax returns required to be filed by it and promptly pay all taxes,
assessments, governmental charges, duties, penalties, interest and fines that become due and payable, except those being contested in good faith by appropriate proceedings;
I. Withhold from each payment made to each of its employees the amount of all taxes (including federal income taxes, FICA taxes and state and local income and wage taxes) required to be withheld therefrom
and pay the same to the proper tax receiving officers;
J. Continue to follow and implement policies, procedures and practices
regarding the identification, monitoring, classification and treatment of all assets in substantially the same manner as it has in the past;
K. Account for all transactions in accordance with GAAP (unless otherwise instructed by RAP, in which instance account for such transaction in accordance with RAP) specifically without limitation
(i) maintaining the allowance for loan and lease losses account for HCB of at least $2,091,000; and (ii) paying or accruing for by the Closing Date all liabilities, obligations, costs, and expenses owed or incurred by HCBI or HCB on or
before the Closing Date;
L. Perform all of its material obligations under contracts, leases and documents relating to or
affecting its assets, Properties and business, except such obligations as it may in good faith dispute;
M. Maintain and keep
in full force and effect, in all material respects, presently existing insurance coverage and give all notices and present all claims under all insurance policies in due and timely fashion; and
N. Timely file all reports required to be filed with Governmental Authorities and observe and conform, in all material respects, to all
applicable laws, rules, regulations, ordinances, codes, orders, licenses and permits, except those being contested in good faith by appropriate proceedings.
Section 5.04.
Negative Covenants
. From the date of this Agreement through the Closing, without the prior written consent of IBG, HCBI shall not and HCBI shall cause HCB to not:
A. Introduce any new material method of management or operation;
B. Intentionally take any action that would reasonably be expected to result in a Material Adverse Change;
C. Take or fail to take any action that could reasonably be expected to cause the representations and warranties made in ARTICLE III to
be inaccurate in any material respect at the time of the Closing or preclude HCBI from making such representations and warranties (as modified by the supplemental Confidential Schedules) at the time of the Closing;
D. Declare, set aside or pay any dividend or other distribution with respect to its capital, except that (i) HCB may pay dividends
to HCBI, (ii) HCBI may pay a dividend of
37
$.50 per share to holders of its Common Stock on July 15, 2014, (iii) HCBI may pay a dividend of $.50 per share to holders of its Common Stock on October 15, 2014 if the Closing
Date is not on or prior to that date, and (iv) HCBI may pay the Section 1.05(D) Distribution;
E. Enter into, alter,
amend, renew or extend any material contract or commitment which would result in an obligation of HCBI or HCB to make payments in excess of $25,000, except for loans and extensions of credit in the ordinary course of business which are subject to
the provisions of Sections 5.04(Y) and 5.04(Z);
F. Mortgage, pledge or subject to lien, charge, security interest or any
other encumbrance or restriction any of its Properties, business or assets, tangible or intangible except in the ordinary course of business and consistent with past practices;
G. Cause or allow the loss of insurance coverage, unless replaced with coverage which is substantially similar (in amount and insurer) to
that in effect as of the date of this Agreement;
H. Incur any indebtedness, obligation or liability, whether absolute or
contingent, other than the receipt of deposits and trade debt or except in the ordinary course of business and consistent with past practices or in connection with the transactions contemplated by this Agreement or any of the agreements or documents
contemplated hereby;
I. Discharge or satisfy any lien or pay any obligation or liability, whether absolute or contingent, due
or to become due, except in the ordinary course of business and consistent with past practices, except for obligations under the retention agreements set forth in
Confidential Schedule 5.14
that are payable on or before the Closing;
J. Issue, reserve for issuance, grant, sell or authorize the issuance of any shares of its capital or other securities or
subscriptions, options, warrants, calls, rights or commitments of any kind relating to the issuance thereto, except to the extent any commitment to do so is outstanding as of the date of this Agreement;
K. Amend or otherwise change its articles of association, charter, or bylaws;
L. Sell, transfer, lease to others or otherwise dispose of any material amount of its assets or Properties, discount or arrange for a
payoff of a charged off or deficiency credit, cancel or compromise any material debt or claim, or waive or release any right or claim other than in the ordinary course of business and consistent with past practices; but any such transaction
involving amounts in excess of $100,000 shall be deemed to not be in the ordinary course of business;
M. Enter into any
material transaction other than in the ordinary course of business;
N. Except in the ordinary course of the business and
consistent with past practices, enter into or give any promise, assurance or guarantee of the payment, discharge or fulfillment of any undertaking or promise made by any other third person, firm or corporation;
38
O. Sell or knowingly dispose of, or otherwise divest itself of the ownership, possession,
custody or control, of any corporate books or records of any nature that, in accordance with sound business practice, normally are retained for a period of time after their use, creation or receipt, except at the end of the normal retention period;
P. Except for salary increases in the ordinary course of business and consistent with past practices of HCBI or HCB, make any
material change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, or pay or agree to or orally promise to pay, conditionally or otherwise, any bonus or extra compensation, pension, severance or vacation
pay, to or for the benefit of any of its shareholders, directors, officers or employees, or enter into any employment or consulting contract (other than as contemplated by this Agreement) or other agreement with any director, officer or employee or
adopt, amend in any material respect or terminate (other than termination of the Employee Benefit Plans contemplated by this Agreement) any pension, employee welfare, retirement, stock purchase, stock option, stock appreciation rights, termination,
severance, income protection, golden parachute, savings or profit-sharing plan (including trust agreements and insurance contracts embodying such plans), any deferred compensation, or collective bargaining agreement, any group insurance contract or
any other incentive, welfare or employee benefit plan or agreement maintained by it for the benefit of its directors, employees or former employees;
Q. Engage in any transaction with any Affiliate except in the ordinary course of business and consistent with past practices;
R. Acquire any capital or other equity securities or acquire any equity or ownership interest in any bank, corporation, partnership or other entity, except (i) through settlement of indebtedness,
foreclosure, or the exercise of creditors’ remedies or (ii) in a fiduciary capacity, the ownership of which does not expose it to any liability from the business, operations or liabilities of such person;
S. Except as contemplated by this Agreement, terminate, cancel or surrender any contract, lease or other agreement or unreasonably permit
any damage, destruction or loss which, in any case or in the aggregate, may reasonably be expected to result in a Material Adverse Change;
T. Dispose of, permit to lapse, transfer or grant any rights under, or knowingly breach or infringe upon, any United States or foreign license or Proprietary Right or materially modify any existing rights
with respect thereto, except in the ordinary course of business and consistent with past practices;
U. Make any capital
expenditures, capital additions or betterments in excess of an aggregate of $25,000;
V. Hire or employ any new officer or
hire or employ any new non-officer employee, other than to replace non-officer employees;
W. Make any, or acquiesce with any,
change in accounting methods, principles or material practices, except as required by GAAP or RAP, including without limitation making any “reverse provision for loan losses” or other similar entry or accounting method that would reduce
the allowance for loan and lease losses of HCB;
39
X. Pay a rate on deposits at HCB materially higher than is consistent with the ordinary
course of business and consistent with past practices;
Y. Make any new loan to a single borrower and his related interests in
excess of $500,000; but HCBI shall provide to IBG a weekly written report of all loans made, renewed, or modified by HCB;
Z.
Renew, extend the maturity of, or alter the material terms of any loan except in compliance with HCB’s existing policies and procedures and consistent with past practices and prudent banking principles;
AA. Renew, extend the maturity of or alter any of the material terms of any classified loan or extension of credit;
BB. Sell (but payment at maturity or prepayment is not deemed a sale) Investment Securities or purchase Investment Securities, other than
U.S. Treasuries with a maturity of two years or less; or
CC. Redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital.
Section 5.05.
Access; Pre Closing Investigation
. HCBI shall afford the officers, directors,
employees, attorneys, accountants, investment bankers and authorized representatives of IBG full access during regular business hours to all of the books, contracts, commitments, personnel and records of HCBI and HCB, and furnish to IBG during such
period all such information concerning HCBI and HCB and their affairs as IBG may reasonably request, so that IBG may have full opportunity to make such reasonable investigation as it shall desire to make of the affairs of HCBI and HCB, including
access sufficient to verify the value of the assets and the liabilities of HCBI and HCB and the satisfaction of the conditions precedent to IBG’s obligations described in ARTICLE VIII. HCBI agrees at any time, and from time to time, to furnish
to IBG as soon as practicable, any additional information that IBG may reasonably request. No investigation by IBG or its representatives shall affect the representations and warranties set forth herein.
Section 5.06.
Invitations to and Attendance at Directors’ and Committee Meetings
. HCBI shall cause HCB to give notice to
one designee of IBG of, and shall invite such designee to attend, all regular and special meetings of the HCBI Board and the HCB Board and all regular and special meetings of any senior management committee (including the executive committee and the
loan and discount committee of HCB) of HCBI and HCB; but such designee shall excuse himself from such meetings while this Agreement or the transactions contemplated hereby are being discussed. If the Merger is finally disapproved by any appropriate
Regulatory Agency or if this Agreement is terminated pursuant to its terms, IBG’s designee will no longer be entitled to notice of and permission to attend such meetings.
40
Section 5.07.
Additional Financial Statements
. HCBI shall promptly furnish IBG
with true and complete copies of each additional HCBI Regulatory Report and HCB Call Report as soon as such reports are available.
Section 5.08.
Untrue Representations
. HCBI shall promptly notify IBG in writing if HCBI becomes aware of any fact or condition that makes untrue, or shows to have been untrue, in any material
respect, any schedule or any other information furnished to IBG or any representation or warranty made in or pursuant to this Agreement or that results in HCBI’s failure to comply with any covenant, condition or agreement contained in this
Agreement.
Section 5.09.
Litigation and Claims
. HCBI shall promptly notify IBG in writing of any litigation, or
of any claim, controversy or contingent liability that is reasonably expected to become the subject of litigation, against HCBI or HCB or affecting any of their Properties, if such litigation or potential litigation is reasonably likely, in the
event of an unfavorable outcome, to result in a Material Adverse Change. HCBI shall promptly notify IBG of any legal action, suit or proceeding or judicial, administrative or governmental investigation, pending or, to the Best Knowledge of HCBI,
threatened against HCBI or HCB that (i) questions or would reasonably be expected to question the validity of this Agreement or the agreements contemplated hereby, or any actions taken or to be taken by HCBI or HCB pursuant hereto or
(ii) seeks to enjoin or otherwise restrain the transactions contemplated hereby or thereby.
Section 5.10.
Adverse Changes
. HCBI shall promptly notify IBG in writing if any change shall have occurred or, to the Best Knowledge of HCBI, been threatened (or any development shall have occurred or, to the Best Knowledge of HCBI, been threatened
involving a prospective change) in the business, financial condition or operations of HCBI and/or HCB that has resulted in or would reasonably be expected to result in a Material Adverse Change.
Section 5.11.
No Negotiation with Others
.
A. HCBI agrees that it shall not, and that it shall cause HCB and the respective employees, directors, officers, financial advisors and agents of HCBI and HCB (collectively, “
HCBI
Representatives
”) not to (i) solicit, knowingly encourage, initiate or participate in any negotiations or discussions with any third party (except for the limited purpose of notifying such person of the existence of the provisions of
this Section 5.11) regarding an Acquisition Proposal, whether by acquisition, business combination, purchase of securities or assets or otherwise; (ii) disclose to any third party any information concerning the business, Properties, books
or records of HCBI or HCB in connection with any Acquisition Proposal, other than as provided herein or as compelled by law; or (iii) cooperate with any third party to make any Acquisition Proposal, other than the sale by HCB of assets in the
ordinary course of business consistent with past practices. Promptly upon receipt of any unsolicited offer, HCBI will communicate to IBG the terms of any proposal or request for information and the identity of the parties involved
B. Notwithstanding anything to the contrary contained in this Section 5.11, if at any time after the date hereof and before
obtaining Shareholder Approval, HCBI and the HCBI Representatives, having each theretofore complied with the terms of Section 5.11(A), receives a bona fide, unsolicited written Acquisition Proposal, HCBI and the HCBI
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Representatives may engage in negotiations and discussions with, and furnish any information and other access (so long as all such information and access has previously been made available to IBG
or is made available to IBG before or concurrently with the time such information or access is made available to such person) to, any person making such Acquisition Proposal if, and only if, the HCBI Board determines in good faith, after
consultation with outside legal and financial advisors, that (i) such Acquisition Proposal is or is reasonably capable of becoming a Superior Proposal and (ii) the failure of the HCBI Board to furnish such information or access or enter
into such discussions or negotiations would reasonably be expected to be a violation of its fiduciary duties to the HCBI shareholders; but before furnishing any material nonpublic information, HCBI shall have received from the person making such
Acquisition Proposal an executed confidentiality agreement with terms at least as restrictive in all material respects on such person as the Confidentiality Agreement entered into with IBG on August 7, 2013, which confidentiality agreement
shall not prohibit HCBI from complying with the terms of this Section 5.11. HCBI will promptly, and in any event within two business days, (x) notify IBG in writing of the receipt of such Acquisition Proposal or any request for nonpublic
information relating to HCBI or for access to the properties, books or records of HCBI by any person that has made, or to the Best Knowledge of HCBI may be considering making, an Acquisition Proposal and (y) communicate the material terms of
such Acquisition Proposal to IBG, including as they may change upon any modification or amendment to the terms thereof. HCBI will keep IBG reasonably apprised of the status of and other matters relating to any such Acquisition Proposal on a timely
basis.
C. Nothing contained in this Section 5.11 shall prevent HCBI or the HCBI Board from (i) taking the actions
provided in Sections 1.08(C) or 5.11(B), (ii) responding to an unsolicited bona fide Acquisition Proposal for the sole purpose of clarifying the terms and conditions of the Acquisition Proposal, (iii) informing any person who submits an
unsolicited bona fide Acquisition Proposal of HCBI’s obligations pursuant to Section 5.11(A) or (iv) in consultation with outside counsel, complying with its disclosure obligations under federal or state law in connection with a
Change in Recommendation.
Section 5.12.
Consents and Approvals
. HCBI shall use commercially reasonable efforts to
obtain all consents and approvals from third parties, including the third party consents listed on
Confidential Schedule 3.09
, required of HCBI or HCB in connection with the consummation of the transactions contemplated by this Agreement.
HCBI will cooperate in all commercially reasonable respects with IBG to obtain all such approvals and consents required of IBG.
Section 5.13.
Environmental Investigation; Right to Terminate Agreement
.
A. IBG and its consultants, agents and representatives, at the sole cost and expense of IBG, shall have the right to the same extent that
HCBI has the right, but not the obligation or responsibility, to inspect any Property, including conducting asbestos surveys and sampling, environmental assessments and investigation, and other environmental surveys and analyses including soil and
ground sampling (“
Environmental Inspections
”). IBG shall notify HCBI in writing before any Environmental Inspection, and HCBI may place reasonable restrictions on the time of such Environmental Inspection. If, as a result of any
such Environmental Inspection, further investigation (“
Secondary Investigation
”) including, test borings, soil, water and other sampling is deemed desirable by IBG, IBG shall (i) notify HCBI in
42
writing of any Property for which it intends to conduct such a Secondary Investigation and the reasons for the Secondary Investigation, and (ii) at the sole cost and expense of IBG, commence
the Secondary Investigation. IBG shall give reasonable written notice to HCBI of the Secondary Investigation, and HCBI may place reasonable time and place restrictions on the Secondary Investigation.
B. IBG shall make available to HCBI the results and reports of such Environmental Inspections and Secondary Investigations promptly after
IBG receives or is advised of such results. IBG shall not have any liability or responsibility of any nature whatsoever for the results, conclusions or other findings related to any Environmental Inspection, Secondary Investigation or other
environmental survey. If this Agreement is terminated, except as otherwise required by law, reports to any Governmental Authority of the results of any Environmental Inspection, Secondary Investigation or other environmental survey shall not be made
by IBG. IBG shall make no such report before Closing unless required to do so by applicable law, and in such case will give HCBI reasonable written notice of IBG’s intentions.
C. IBG shall have the right to terminate this Agreement if (i) the factual substance of any warranty or representation set forth in
Section 3.22 is not materially true and accurate; (ii) the results of such Environmental Inspection, Secondary Investigation or other environmental survey are disapproved by IBG because the Environmental Inspection, Secondary Investigation
or other environmental survey identifies material violations or potential material violations of Environmental Laws; (iii) HCBI has refused to allow IBG to conduct an Environmental Inspection or Secondary Investigation in a manner that IBG
reasonably considers necessary; (iv) the Environmental Inspection, Secondary Investigation or other environmental survey identifies any past or present event, condition or circumstance that would or potentially could reasonably be expected to
require a material remedial or cleanup action or result in a Material Adverse Change; (v) the Environmental Inspection, Secondary Investigation or other environmental survey identifies the presence of any underground or above ground storage
tank in, on or under any Property that is not shown to be in material compliance with all Environmental Laws applicable to the tank either at the date of this Agreement or at a future time certain, or that has had a release of petroleum or some
other Hazardous Material that has not been cleaned up to the satisfaction of the relevant Governmental Authority or any other party with a legal right to compel cleanup; or (vi) the Environmental Inspection, Secondary Investigation or other
environmental survey identifies the presence of any asbestos-containing material in, on or under any Property, the removal of which could reasonably be expected to result in a Material Adverse Change. IBG shall advise HCBI in writing (the
“
Environmental Notice
”) as to whether IBG intends to terminate this Agreement because IBG disapproves of the results of the Environmental Inspection, Secondary Inspection or other environmental survey. Upon receipt of the
Environmental Notice, HCBI shall have the opportunity to correct any objected to violations or conditions to IBG’s reasonable satisfaction within 30 days after the date of the Environmental Notice. If that HCBI fails to demonstrate its
satisfactory correction of the violations or conditions to IBG, IBG may terminate the Agreement on the 31st day after the date of the Environmental Notice.
D. HCBI agrees to make available to IBG and its consultants, agents and representatives all documents and other material relating to environmental conditions of any Property including the results of other
environmental inspections and surveys. HCBI also agrees
43
that all engineers and consultants who prepared or furnished such reports may discuss such reports and information with IBG and shall be entitled to certify the same in favor of IBG and its
consultants, agents and representatives and make all other data available to IBG and its consultants, agents and representatives.
Section 5.14.
Employee Plans
. Before the Closing Date, HCBI shall and shall cause HCB to terminate the Employee Plans subject to compliance with applicable law, so long as any such action
preserves the rights of the participants in such Employee Plans (including vesting rights). HCBI and HCB shall terminate the retention agreements listed in
Confidential Schedule 5.14
and the agreement listed in
Confidential Schedule
3.18
, make the payments required pursuant to such agreements, and use commercially reasonable efforts to obtain from each applicable officer a termination and release with respect to their agreement.
Section 5.15.
Disclosure Schedules
. At least three business days before the Closing, HCBI agrees to provide IBG with
supplemental Confidential Schedules to be delivered by HCBI pursuant to this Agreement reflecting any material changes thereto between the date of this Agreement and the Closing Date.
Section 5.16.
Voting Agreement
. HCBI shall execute and deliver, and shall use its best efforts to cause the directors of HCBI
and HCB to execute and deliver contemporaneously with the execution of this Agreement, the Voting Agreement, in the form attached hereto as
Exhibit “B”
, and HCBI acknowledges that, upon the execution and delivery of the Voting
Agreement, such persons shall have agreed that they will vote the HCBI Shares owned by them in favor of this Agreement and the transactions contemplated hereby, including the Merger, subject to required regulatory approvals.
Section 5.17.
Releases
. HCBI shall use its commercially reasonable efforts to obtain from each of the directors and executive
officers of HCBI and HCB a written release in the form attached hereto as
Exhibit “C”
executed by such director or executive officer and dated the Closing Date, releasing HCBI and HCB from claims arising before the Effective Time
(the “
Releases
”).
Section 5.18.
Other Agreements
. HCBI will, as soon as practicable after the
execution of this Agreement, enter into the Merger Agreement with Newco, and shall perform all of its obligations thereunder. HCBI shall, and shall cause HCB to, execute and deliver the Merger Agreement, the Bank Merger Agreement and such other
agreements, certificates of merger, certificates, and other documents reasonably necessary to effect and evidence the Merger and the Bank Merger, and to take all actions necessary or required to consummate the transactions contemplated thereby.
Section 5.19.
Support Agreements
. HCBI shall use its commercially reasonable efforts to obtain from each outside
director of HCBI and HCB a Support Agreement in the form attached hereto as
Exhibit “D”
executed by such directors (other than directors who are employees of HCB) contemporaneously with the execution of this Agreement.
Section 5.20.
Shareholder Lists
. After the date of this Agreement, HCBI shall from time to time make available to IBG, upon
its request, a list of the HCBI shareholders and their addresses, a list showing all transfers of the HCBI Shares and such other information as IBG may reasonably request regarding both the ownership and prior transfers of the HCBI Shares.
44
Section 5.21.
Conforming Accounting Adjustments
. HCBI shall, if requested in
writing by IBG, consistent with GAAP, immediately before Closing, make such accounting entries as HCBI may reasonably request in order to conform the accounting records of HCBI to the accounting policies and practices of IBG. No such adjustment by
HCBI or HCB shall of itself constitute or be deemed to be a breach, violation or failure by HCBI or HCB to satisfy any representation, warranty, covenant, condition or other provision or constitute grounds for termination of this Agreement by IBG or
be an acknowledgment by HCBI of any adverse circumstances for purposes of determining whether the conditions to IBG’s obligations under this Agreement have been satisfied, nor will any such adjustment affect the calculation of the Tangible Book
Value under Section 8.07.
Section 5.22.
D & O Liability Insurance
. Contemporaneously with the Closing,
HCBI and HCB shall purchase an extended reporting period for three years under HCBI’s existing directors and officers liability insurance policy, on terms approved by IBG, for purposes of covering actions occurring before the Effective Time.
Notwithstanding any other provision of this Agreement, the premiums for such coverage shall be paid and accrued for by HCBI and/or HCB and shall be included (as a deduction) in the calculation of HCBI Tangible Equity.
Section 5.23.
Employment Agreement
. HCBI shall use its commercially reasonable efforts to cause the executive officers
identified in
Confidential Schedule 5.23
to execute and deliver to IBG, simultaneously with the execution of this Agreement, an employment agreement providing for their continued employment with Independent Bank after the Merger.
Section 5.24.
Liquidation of Subsidiary
. HCBI shall take all steps necessary to cause the liquidation and dissolution of HCB
Nevada, Inc. prior to the Closing Date.
ARTICLE VI
COVENANTS OF IBG
IBG hereby makes the covenants set forth in this ARTICLE VI to HCBI.
Section 6.01.
Commercially Reasonable Efforts
. IBG agrees to use commercially reasonable efforts to cause the consummation of
the transactions contemplated hereby in accordance with the terms and conditions of this Agreement.
Section 6.02.
Untrue Representations
. IBG shall promptly notify HCBI in writing if IBG becomes aware of any fact or condition that makes untrue, or shows to have been untrue, in any material respect, any schedule or any other information furnished to HCBI
or any representation or warranty made in or pursuant to this Agreement or that results in IBG’s failure to comply with any covenant, condition or agreement contained in this Agreement.
Section 6.03.
Affirmative Covenants
. Except as otherwise permitted or required by this Agreement, from the date hereof until
the Effective Time, IBG shall and shall cause Independent Bank to:
A. Maintain its corporate existence in good standing;
45
B. Maintain the general character of its business and conduct its business in its ordinary
and usual manner;
C. Extend credit only in accordance with existing lending policies and practices;
D. Use commercially reasonable efforts to preserve its business organization intact; to retain the services of its present employees,
officers, directors and agents; to retain its present customers, depositors, suppliers and correspondent banks; and to preserve its goodwill and the goodwill of its suppliers, customers and others having business relationships with it; and
E. Promptly furnish or make available to HCBI true and complete copies of each additional IBG SEC Report and Independent Bank
Call Report as soon as such reports are available.
Section 6.04.
Registration Statement
.
A. IBG agrees that none of the information supplied or to be supplied by it for inclusion or incorporation by reference in (i) the
Registration Statement shall, at the time the Registration Statement and each amendment or supplement thereto, if any, becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading and (ii) the Proxy Statement and any amendment or supplement thereto shall, at the date(s) of mailing to shareholders and at the time of the Meeting,
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. IBG further agrees that if it shall become aware before the effectiveness of
the Registration Statement of any information furnished by such party that would cause any of the statements in the Registration Statement or the Proxy Statement to be false or misleading with respect to any material fact, or to omit to state any
material fact necessary to make the statements therein not false or misleading, to promptly inform HCBI thereof and to take the necessary steps to correct the Registration Statement or the Proxy Statement. IBG agrees to advise HCBI, promptly after
IBG receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, of the issuance of any stop order or the suspension of the qualification of IBG Shares for offering or sale
in any jurisdiction, of the initiation or, to the extent IBG is aware thereof, threat of any proceeding for any such purpose, or of any request by the SEC for the amendment or supplement of the Registration Statement or for additional information.
IBG agrees to promptly provide to HCBI copies of all correspondence between IBG or any of its representatives, on the one hand, and the SEC, on the other hand.
Section 6.05.
NASDAQ Listing
. IBG shall, as promptly as practicable, file all documents, take all actions reasonably necessary and otherwise use its reasonable best efforts to list, before the
Effective Date, on the NASDAQ the IBG Shares to be issued to the HCBI shareholders as part of the Merger Consideration in connection with the Merger.
46
Section 6.06.
Litigation and Claims
. IBG shall promptly notify HCBI in writing
of any litigation, or of any claim, controversy or contingent liability that might reasonably be expected to become the subject of litigation, against IBG or Independent Bank or affecting any of their respective Properties, if such litigation or
potential litigation is reasonably likely, in the event of an unfavorable outcome, to result in a Material Adverse Change. IBG shall promptly notify HCBI in writing of any legal action, suit or proceeding or judicial, administrative or governmental
investigation, pending or, to the knowledge of IBG, threatened against IBG or Independent Bank that (i) questions or could reasonably be expected to question the validity of this Agreement or the agreements contemplated hereby or any actions
taken or to be taken by IBG with respect hereto or thereto or (ii) seeks to enjoin or otherwise restrain the transactions contemplated hereby or thereby.
Section 6.07.
Regulatory and Other Approvals
. With the cooperation of HCBI, IBG shall promptly file or cause to be filed applications for all regulatory approvals required to be obtained by
IBG, HCB and Newco in connection with this Agreement and the transactions contemplated hereby, including to the necessary applications for the prior approval of the Merger by the FRB (or appropriate Federal Reserve Bank acting on delegated
authority), the Texas Department of Banking (the “
TDB
”) and the Federal Deposit Insurance Corporation (the “
FDIC
”). Such applications shall be filed by June 30, 2014 IBG shall use commercially reasonable
efforts to obtain all such regulatory approvals and any other approvals from third parties at the earliest practicable time. IBG shall keep HCBI reasonably informed as to the status of such applications and filings, and IBG shall promptly furnish
HCBI and its counsel with copies of all such regulatory filings and all correspondence for which confidential treatment has not been requested.
Section 6.08.
Formation and Organization of Newco
. IBG will duly form and organize Newco as a Texas corporation.
Section 6.09.
Other Agreements
. IBG will, as soon as practicable after the execution of this Agreement, cause Newco to enter into the Merger Agreement with HCBI, and to perform all of its
obligations thereunder. IBG shall, and shall cause Independent Bank and Newco to, take such actions and to execute and deliver the Merger Agreement, the Bank Merger Agreement, the Subsequent Merger Documents, and such other agreements, certificates
of merger, certificates, and other documents reasonably necessary to effect and evidence the Merger, the Bank Merger and the Subsequent Merger, and to take any and all actions necessary or required to consummate the transactions contemplated
thereby.
Section 6.10.
Employee Matters
. On the Closing Date, IBG may, but shall not be required to, cause IBG to
offer employment to the employees of HCB. Each of the employees of HCB who becomes an employee of IBG after the Effective Time shall be entitled to receive, from and after the Effective Time, the same pension, profit sharing, health, welfare,
incentive, vacation and other benefits as are customarily offered or afforded to the employees of IBG. Each of the employees of HCB who becomes an employee of IBG after the Effective Time shall receive credit for their prior service at HCB for
purposes of vesting, eligibility or any other purpose under the employee benefit plans of IBG; and such persons shall not have lack of coverage for pre-existing conditions or be subject to any additional deductibles or waiting periods otherwise
required for health insurance coverage. IBG shall provide each such employee
47
with credit for co-payments and deductibles paid in the plan year in which the Closing Date occurs in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans in
which such employee is eligible to participate in after the Closing Date. IBG shall, within 30 calendar days of the date of this Agreement, provide HCBI with a list of employees of HCB to whom IBG will not offer employment. Such list shall be kept
confidential and disclosed only to the executive officers and directors of HCBI, and to the employees of IBG who need to know the information, and such information shall not be provided to or discussed with other employees of HCBI without
HCBI’s prior written consent.
Section 6.11.
Adverse Changes
. IBG shall promptly notify HCBI in writing if
any change shall have occurred or been threatened (or any development shall have occurred or been threatened involving a prospective change) in the business, financial condition, or operations of IBG and/or Independent Bank that has or may
reasonably be expected to have to result in a Material Adverse Change with respect to IBG or Independent Bank or lead to a failure to obtain necessary regulatory approval of this transaction.
Section 6.12.
Disclosure Schedules
. At least three business days before the Closing, IBG agrees to provide HCBI with
supplemental disclosure schedules to be delivered by IBG pursuant to this Agreement reflecting any material changes thereto between the date of this Agreement and the Closing Date.
Section 6.13.
Issuance of IBG Common Shares
. The IBG Shares to be issued by IBG to the shareholders of HCBI pursuant to this
Agreement will, on the issuance and delivery to such shareholders pursuant to this Agreement, be duly authorized, validly issued, fully paid and nonassessable. The IBG Shares to be issued to the shareholders of HCBI pursuant to this Agreement are
and will be free of any preemptive rights of the shareholders of IBG or any other person, firm or entity. The IBG Shares to be issued to the shareholders of HCBI pursuant to this Agreement pursuant to the Registration Statement which has become
effective, except for IBG Shares issued to any shareholder of HCBI who may be deemed to be an “affiliate” (under the Exchange Act) of IBG after completion of the Merger will be freely tradable by each HCBI shareholder who is not a dealer
for purposes of the Securities Act.
Section 6.14.
Access to Properties and Records
. To the extent permitted by
applicable law, IBG shall and shall cause each of its Subsidiaries, upon reasonable notice from HCBI to IBG to: (a) afford the employees and officers and authorized representatives (including legal counsel, accountants and consultants) of HCBI
reasonable access to the properties, books and records of IBG and its Subsidiaries during normal business hours in order that HCBI may have the opportunity to make such reasonable investigation as it shall desire to make of the affairs of IBG and
its Subsidiaries, and (b) furnish HCBI with such additional financial and operating data and other information as to the business and properties of IBG as HCBI may, from time to time, reasonably request.
Section 6.15.
Director and Officer Indemnification
. For a period of three years after the Effective Time, IBG shall
indemnify, defend and hold harmless each person entitled to indemnification from HCBI and HCB (each, an “
Indemnified Party
”) against all liabilities arising out of actions or omissions occurring at or prior to the Effective Time to
the same extent and subject to the conditions set forth in the Articles of Incorporation or Association, as applicable, of HCBI and HCB, and in the Bylaws of HCBI and HCB, as in effect on the date hereof.
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ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF HCBI
The obligations of HCBI
under this Agreement are subject to the satisfaction, before or at the Closing, of each of the following conditions, which may be waived in whole or in part by HCBI:
Section 7.01.
Representations and Warranties
. All representations and warranties made by IBG in this Agreement or in any document or schedule delivered to HCBI in connection with this
Agreement shall have been true and correct when made and shall be true and correct in all material respects as of the Closing with the same force and effect as if such representations and warranties were made at and as of the Closing, except with
respect to those representations and warranties specifically made as of an earlier date (in which case such representations and warranties shall be true and correct as of such earlier date).
Section 7.02.
Performance of Obligations
. IBG shall have, or shall have caused to be, performed or complied with, in all
material respects, all agreements, terms, covenants and conditions required by this Agreement to be performed or complied with by IBG at or before the Closing.
Section 7.03.
Government and Other Approvals
. IBG shall have received approval by such Governmental Authorities as may be required by applicable law of the transactions contemplated by this
Agreement, the Merger Agreement and the Subsequent Merger Documents, and all applicable waiting periods prescribed by applicable law or regulation shall have expired. Such approvals and the transactions contemplated hereby shall not have been
contested or threatened to be contested by any Governmental Authority or by any other third party (except shareholders asserting statutory dissenters’ appraisal rights) by formal proceedings.
Section 7.04.
No Litigation
. No action shall have been taken, and no statute, rule, regulation or order shall have been
promulgated, enacted, entered, enforced or deemed applicable to this Agreement, the Merger Agreement, the Bank Merger Agreement, the Subsequent Merger Documents or the transactions contemplated hereby or thereby by any Governmental Authority,
including by means of the entry of a preliminary or permanent injunction, that would (A) make this Agreement or any other agreement contemplated hereby or thereby, or the transactions contemplated hereby or thereby, illegal, invalid or
unenforceable, (B) impose material limits on the ability of any party to this Agreement to consummate this Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby, or (C) if the consummation
of this Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby, subject or could reasonably be expected to subject HCBI or HCB, or any of their respective officers, directors, shareholders or
employees, to criminal or civil liability. No action or proceeding by or before any Governmental Authority or by any other person shall be threatened, instituted or pending that could reasonably be expected to result in any of the consequences
referred to in clauses (A) through (C) above.
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Section 7.05.
Delivery of Closing Documents
. HCBI shall have received all
documents required to be delivered by IBG, Independent Bank and Newco on or before the Closing Date as set forth in Section 2.03, all in form and substance reasonably satisfactory to HCBI.
Section 7.06.
Shareholder Approvals
. This Agreement, the Merger, and the Merger Agreement shall have been approved by the
affirmative vote of the holders of the percentage of the outstanding HCBI Shares required for approval of this Agreement, the Merger, and the Merger Agreement in accordance with the Articles of Incorporation of HCBI and the TBOC.
Section 7.07.
Registration Statement
. The Registration Statement shall have become effective under the Securities Act and no
stop order suspending such effectiveness shall be in effect, and no action, suit, proceeding, or investigation by the SEC to suspend the effectiveness shall have been initiated, continuing, or have been threatened and be unresolved, and all
necessary approvals under state securities laws relating to the issuance or trading of the IBG Share to be issued in the Merger shall have been received.
Section 7.08.
Listing of IBG Shares
. The IBG Shares to be delivered to the shareholders of HCBI pursuant to this Agreement shall have been authorized for listing on the NASDAQ.
Section 7.09.
No Material Adverse Change
. There shall have been no Material Adverse Change in IBG since March 31, 2014.
Section 7.10.
Delivery of Merger Consideration
. IBG shall have delivered, or caused to be delivered, to the
Exchange Agent, the IBG Shares issuable to the holders of HCBI Share as part of the Merger Consideration and the cash portion of the Merger Consideration payable pursuant to ARTICLE I, and HCBI shall have received evidence of the same from IBG.
Section 7.11.
Average Closing Price
. The Average Closing Price shall be at least $37.7416.
Section 7.12.
Tax Opinion
. HCBI shall have received an opinion (reasonably acceptable in form and substance to HCBI) from
Harris Law Firm PC, dated as of the Closing Date, to the effect that for federal income tax purposes (i) the Merger and the Subsequent Merger, together, will be treated as a reorganization within the meaning of § 368(a) of the Code, and
(ii) each of IBG and HCBI will be a party to such reorganization within the meaning of § 368(b) of the Code, and such opinion shall not have been withdrawn, revoked or modified. Such opinion will be based upon representations of the
Parties contained in this Agreement and in the tax representation letters described in Section 1.13(C).
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF IBG
The obligations of IBG under this Agreement are subject to the satisfaction, before or at the Closing, of each of the following
conditions, which may be waived in whole or in part by IBG.
Section 8.01.
Representations and Warranties
. All
representations and warranties made by HCBI in this Agreement or in any schedule delivered to IBG pursuant hereto shall have been
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true and correct when made and shall be true and correct in all material respects as of the Closing with the same force and effect as if such representations and warranties were made at and as of
the Closing, except with respect to those representations and warranties specifically made as of an earlier date (in which case such representations and warranties shall be true as of such earlier date) or changes or updates contemplated by this
Agreement.
Section 8.02.
Performance of Obligations
. HCBI shall have performed or complied with, in all material
respects, all agreements, terms, covenants and conditions required by this Agreement to be performed or complied with by HCBI before or at the Closing.
Section 8.03.
Delivery of Closing Documents
. IBG shall have received all documents required to be delivered by HCBI on or before the Closing Date as set forth in Section 2.02, all in form
and substance reasonably satisfactory to IBG.
Section 8.04.
Government and Other Approvals
. IBG shall have
received approvals and consents, on terms and conditions reasonably acceptable to IBG, as may be required (A) by applicable law from all applicable Governmental Authorities, including the FRB, the FDIC and the TDB, and (B) from all third
parties, in each case, in connection with this Agreement and any other agreement contemplated hereby, and with the consummation of the transactions contemplated hereby and thereby, and all applicable waiting periods shall have expired. Such
approvals and consents shall not have imposed, in the reasonable judgment of IBG, any material adverse requirement upon IBG or its Subsidiaries, including any requirement that IBG sell or dispose of any significant amount of its assets or any IBG
Subsidiary. Neither such approvals or consents, nor any of the transactions contemplated hereby, shall have been contested or threatened to be contested by any Governmental Authority or by any other third party (except shareholders asserting
statutory dissenters’ appraisal rights) by formal proceedings. It is understood that, if such contest is brought by formal proceedings, IBG may, but shall not be obligated to, answer and defend such contest or otherwise pursue this transaction
over such objection.
Section 8.05.
No Litigation
. No action shall have been taken, and no statute, rule,
regulation or order shall have been promulgated, enacted, entered, enforced or deemed applicable to this Agreement, the Merger Agreement, the Bank Merger Agreement or the Subsequent Merger Documents, or the transactions contemplated hereby or
thereby, by any Governmental Authority, including by means of the entry of a preliminary or permanent injunction, that would (A) make this Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby,
illegal, invalid or unenforceable, (B) require the divestiture of a material portion of the assets of HCBI, (C) impose material limits on the ability of any party to this Agreement to consummate the Agreement or any other agreement
contemplated hereby, or the transactions contemplated hereby or thereby, (D) otherwise result in a Material Adverse Change, or (E) if the consummation of this Agreement or any other agreement contemplated hereby, or the transactions
contemplated hereby or thereby, subject or could reasonably be expected to subject IBG or any of its Subsidiaries, or any officer, director, shareholder or employee of IBG or any of its Subsidiaries, to criminal or civil liability. No action or
proceeding by or before any Governmental Authority or by any other person shall be threatened, instituted or pending that would reasonably be expected to result in any of the consequences referred to in clauses (A) through (E) above.
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Section 8.06.
No Material Adverse Change
. There shall have been no Material
Adverse Change in HCBI or HCB since March 31, 2014.
Section 8.07.
Minimum Tangible Book Value
. As of the
Closing Date, the Tangible Book Value of HCBI shall be not less than $24,000,000. For purposes of this Agreement, “Tangible Book Value” means the tangible shareholders’ equity of HCBI as determined from HCBI’s financial
statements prepared in accordance with generally accepted accounting principles, consistently applied. All of the costs and expenses, of HCBI and HCB related to the transactions contemplated by this Agreement (including, without limitation,
investment banking fees, legal fees, accounting fees, any director, officer, or employee bonuses or payments, (including change in control payments or other payments due under employment arrangements, and any anticipated “stay” or
“retention” bonuses to be paid to HCB employees (including without limitation the payments required under the retention agreements listed on
Confidential Schedule 8.07)
, any costs or fees (including forfeited prepaid expenses)
arising from or related to the termination of the material contracts, the printing and mailing costs related to the Proxy Statement, and the premium for D&O insurance tail coverage, shall have been paid or accrued for before the Closing Date and
shall be included (as a deduction) in the calculation of Tangible Book Value. The calculation of Tangible Book Value shall include accruals for all ad valorem taxes owed by HCBI on a pro-rated basis for the period ending on the Closing Date. The
amount of the unrealized loss set forth in
Confidential Schedule 8.
07 (the “Signing Date Unrealized Loss”) on the investment securities of HCB identified in
Confidential Schedule 8.07
(the “Compatible Securities”)
shall be included (as a deduction) in the calculation of Tangible Book Value. However, any unrealized loss on the Compatible Securities as of the closing date in excess of the Signing Date Unrealized Loss will not be included (as a deduction) in the
calculation of Tangible Book Value. Any and all unrealized gain or loss on all investment securities of HCBI other than the Compatible Securities (the “Non Compatible Securities”) as of the closing date will be included in the calculation
of Tangible Book Value.
HCBI shall, at least three business days before the Closing Date, provide IBG with a preliminary
calculation of Tangible Book Value. If IBG disagrees with such calculation of Tangible Book Value, HCBI and IBG shall meet to resolve any such disagreement. If HCBI and IBG cannot resolve any such disagreement, then an independent accounting firm
mutually agreed to by IBG and HCBI shall resolve any such disagreement which resolution shall be final and binding upon HCBI and IBG. A preliminary calculation of the Tangible Book Value as if the Closing was to occur on October 31, 2014 is
included in
Confidential Section 8.07.
If the Tangible Book Value is less than $24,000,000 at Closing, then the
Aggregate Cash Consideration shall be reduced by an amount equal to $24,000,000 minus the Tangible Book Value at Closing. The adjusted amount or cash consideration amount is referred to as the “
Aggregate Cash Consideration
Adjustment
.” The Per Share Cash Consideration or the Increased Per Share Cash Consideration, as the case may be, shall be reduced by an amount equal to the quotient of (i) the Aggregate Cash Consideration Adjustment,
divided by
(ii) the number of HCBI Shares outstanding on the Closing Date (the “
Adjusted Per Share Cash Consideration
”).
Notwithstanding the foregoing adjustments, IBG shall not be obligated to consummate the Merger if the Tangible Book Value at Closing is less than $22,000,000.
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Section 8.08.
Minimum ALLL
. As of the Closing Date, the Allowance for Loan and
Lease Losses of HCBI shall be at least $2,091,000.
Section 8.09.
Shareholder Approvals
. The holders of at least
the minimum number of HCBI Shares necessary under applicable law to approve this Agreement, the Merger, the Merger Agreement, and all other agreements contemplated hereby, shall have approved this Agreement, the Merger, the Merger Agreement, and all
other agreements contemplated hereby, and the holders of no more than 5% of the HCBI Shares shall have exercised their statutory dissenters’ rights under the TBOC.
Section 8.10.
Termination of Employee Benefit Plans
. All Employee Plans shall have been terminated in accordance with the respective terms of such Employee Plans, the Code, ERISA and all other
applicable laws and regulations and the affected participants shall have been notified of such terminations. Each of the retention agreements between HCBI and HCB and their respective officers listed in
Confidential Schedule 5.14
and the
agreement listed in
Confidential Schedule 3.18
shall have been terminated, and each such officer shall have executed a termination and release with respect to their respective agreement.
Section 8.11.
Releases, Support Agreements, and Resignations
. IBG shall have received executed Releases and Support
Agreements as provided in Section 5.17 and the resignations of each of the directors of HCBI and HCB, effective as of the Closing Date. The Support Agreements entered into by the directors of HCBI and HCB contemporaneously with the execution of
this Agreement shall not have been terminated and shall remain in full force and effect.
Section 8.12.
Registration
Statement
. The Registration Statement covering the IBG Shares to be issued in the Merger shall have become effective under the Securities Act and no stop order suspending such effectiveness shall be in effect, and no action, suit, proceeding, or
investigation by the SEC to suspend the effectiveness shall have been initiated, continuing, or have been threatened and be unresolved, and all necessary approvals under state securities laws relating to the issuance or trading of the IBG Share to
be issued in the Merger shall have been received.
Section 8.13.
Listing
. The IBG Shares to be issued to the HCBI
shareholders as part of the Merger Consideration in the Merger shall have been approved for listing on the NASDAQ.
Section 8.14.
Employment Agreements
. The employment agreements entered into between Independent Bank and those persons listed
on
Confidential Schedule 5.23
contemporaneously with the execution of this Agreement shall not have been terminated and shall remain in full force and effect.
Section 8.15.
Tax Opinion
. IBG shall have received an opinion (reasonably acceptable in form and substance to IBG) from Andrews Kurth LLP, dated as of the Closing Date, to the effect that for
federal income tax purposes (i) the Merger and the Subsequent Merger, together, will be treated as a reorganization within the meaning of § 368(a) of the Code, (ii) each of IBG and HCBI will be a party to such reorganization within
the meaning of § 368(b) of the Code, (iii) the Bank Merger will be treated as a reorganization within the meaning of § 368(a) of the Code,
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and (iv) each of Independent Bank and HCB will be a party to such reorganization within the meaning of § 368(b) of the Code, and such opinion shall not have been withdrawn, revoked or
modified. Such opinion will be based upon representations of the Parties contained in this Agreement and in the tax representation letters described in Section 1.13(C).
Section 8.16.
Average Closing Price
. The Average Closing Price shall be at least $37.7416.
Section 8.17.
Liquidation of Subsidiary
. HCB Nevada, Inc. shall have been liquidated and dissolved.
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.01.
Right of Termination
. This Agreement and the transactions contemplated hereby may be terminated at any time
before the Effective Time (except as otherwise set forth in this Section 9.01), whether before or after approval by the HCBI shareholders as follows, and in no other manner:
A. By the mutual written consent of HCBI and IBG, duly authorized by the HCBI Board and the IBG Board, respectively.
B. By either HCBI or IBG (if the terminating party is not in material breach of any representation, warranty, covenant or other agreement
contained herein) if the conditions precedent to such party’s obligations to close specified in ARTICLES VII and VIII, respectively, shall not have been satisfied on or before December 31, 2014; but if conditions precedent have not been
satisfied because approval of this Agreement or any other agreement contemplated hereby has not been received from any Regulatory Agency whose approval is required to consummate such transactions, either HCBI or IBG can unilaterally extend such
deadline by up to 30 days by providing written notice thereof to the other.
C. By either IBG or HCBI if any of the
transactions contemplated by this Agreement or any other agreement contemplated hereby are disapproved by any Regulatory Agency whose approval is required to consummate such transactions or if any Governmental Authority shall have issued an order,
decree or ruling or taken any other action restraining, enjoining, invalidating or otherwise prohibiting this Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby and such order, decree, ruling or
other action shall have been final and nonappealable.
D. By IBG if it reasonably determines, in good faith and after
consulting with counsel, there is substantial likelihood that any necessary regulatory approval will not be obtained or will be obtained only upon a condition or conditions that make it inadvisable to proceed with the transactions contemplated by
this Agreement or any other agreement contemplated hereby.
E. By IBG if there shall have been any Material Adverse Change in
HCBI or HCB; and by HCBI, if there shall have been any Material Adverse Change in IBG.
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F. By IBG, if HCBI shall have breached or failed to perform in any material respect any of
its representations, warranties, covenants or other agreements contained in this Agreement or any other agreement contemplated hereby, and such failure shall not have been cured within a period of thirty (30) calendar days after written notice
from IBG.
G. By HCBI, if IBG shall have breached or failed to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement or any other agreement contemplated hereby, and such failure shall not have been cured within a period of thirty (30) calendar days after written notice from HCBI.
H. By IBG, in accordance with the provisions of Section 5.13 (Environmental Investigation).
I. By either IBG or HCBI, if the approval of this Agreement and the Merger by the shareholders of HCBI shall not have been obtained by
reason of the failure to obtain the required vote at the Meeting.
J. By HCBI at any time before the Meeting in order to
concurrently enter into an acquisition agreement or similar agreement (each, an “
Acquisition Agreement
”) with respect to a Superior Proposal which has been received and considered by HCBI and the HCBI Board in accordance with all of
the requirements of Section 5.10 hereof.
K. By IBG, if the HCBI Board shall have (i) recommended to the
shareholders of HCBI that they tender their shares in a tender or exchange offer commenced by an un-Affiliated third party for more than 15% of the outstanding HCBI Share, (ii) effected a Change in Recommendation or recommended to the HCBI
shareholders acceptance or approval of any alternative Acquisition Proposal, (iii) has notified IBG in writing that HCBI is prepared to accept a Superior Proposal, or (iv) shall have resolved to do the foregoing.
Section 9.02.
Notice of Termination
. The power of termination provided for by Section 9.01 may be exercised only by a
notice given in writing, as provided for in Section 11.07.
Section 9.03.
Effect of Termination
. In the event
of the termination of this Agreement and abandonment of the Merger pursuant to the provisions of Section 9.01, no party to this Agreement shall have any further liability or obligation in respect of this Agreement, except that (A) the
provisions of ARTICLE X and Section 9.03, 9.04, 11.02, 11.03, and 11.08 shall survive any such termination of the Agreement and abandonment of the Merger and (B) notwithstanding anything to the contrary, neither IBG nor HCBI shall be
relieved or released from any liabilities or damages arising out of its fraud or willful breach of any provision of this Agreement.
Section 9.04.
HCB Termination Fee
. To compensate IBG for entering into this Agreement, taking actions to consummate the transactions contemplated hereunder and incurring the costs and expenses
related thereto and other losses and expenses, including foregoing the pursuit of other opportunities, HCBI and IBG agree as follows:
A. If IBG is not in material breach of any covenant or obligation under this Agreement, HCBI shall pay to IBG the sum of $1,500,000 (the “
Termination Fee
”) if this Agreement is
terminated:
(i) by HCBI under the provisions of Section 9.01(J),
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(ii) by either IBG or HCBI under the provisions of Section 9.01(I)
and
, if
either:
(1) at the time of any failure by the shareholders of HCBI to approve and adopt this Agreement and the Merger, there
shall exist an Acquisition Proposal with respect to HCBI that has not been withdrawn before the Meeting or
(2) within twelve
months of the termination of this Agreement, HCBI enters into a definitive agreement with any third party with respect to any Acquisition Proposal, or
(iii) by IBG under the provisions of Section 9.01(K).
HCBI’s
obligation to pay the Termination Fee pursuant to this Section 9.04(A) shall survive the termination of this Agreement. HCBI shall not be obligated to pay the Termination Fee in the event this Agreement is terminated other than as referenced in
subsections (A)(i) through (A)(iii) above.
B. Any payment required by Section 9.04(A) shall become payable within two
business days after receipt by the non-terminating party of written notice of termination of this Agreement, except that any payment required by Section 9.04(A)(ii)(2) above shall become payable within two business days after execution of the
definitive agreement referenced therein.
C. For purposes of this Agreement, “
Acquisition Proposal
” means a
written offer or proposal from a party other than IBG which contains a fixed price per share or a mathematically ascertainable formula for calculating a price per share for the HCBI Share regarding any of the following (other than the transactions
contemplated by this Agreement) involving HCBI: (i) any merger, reorganization, consolidation, share exchange, recapitalization, business combination, liquidation, dissolution or other similar transaction involving any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of all or substantially all of the assets or equity securities or deposits of, HCBI, in a single transaction or series of related transactions which could reasonably be expected to impede, interfere
with, prevent or materially delay the completion of the Merger; (ii) any tender offer or exchange offer for 50% or more of the outstanding HCBI Shares or the filing of a registration statement in connection therewith; or (iii) any public
announcement of a proposal, plan or intention to do any of the foregoing or any agreement to engage in any of the foregoing.
D. For purposes of this Agreement, “
Superior Proposal
” means a bona fide Acquisition Proposal made by a party other than
IBG that the HCBI Board determines in its good faith judgment to be more favorable to HCBI’s shareholders than the Merger (taking into account, in good faith, the written opinion, with only customary qualifications, of HCBI’s independent
financial advisor that the value of the consideration to HCBI’s shareholders provided for in such Acquisition Proposal exceeds the value of the consideration to HCBI’s shareholders provided for in the Merger) and for which financing, to
the extent required, is then committed or which, in the good faith judgment of the HCBI Board (taking into account, in good faith, the written advice of HCBI’s independent financial advisor), is reasonably capable of being obtained by such
third person.
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ARTICLE X
CONFIDENTIAL INFORMATION
Section 10.01.
Definition of
“Recipient,” “Disclosing Party” and “Representative”
. For purposes of this ARTICLE X, the term “
Recipient
” means the party receiving the Subject Information (as such term is defined in
Section 10.02) and the term “
Disclosing Party
” means the party furnishing the Subject Information. The terms “Recipient” or “Disclosing Party,” as used herein, include: (A) all persons and entities
related to or affiliated in any way with the Recipient or the Disclosing Party, as the case may be, and (B) any Affiliate the Recipient or the Disclosing Party, as the case may be. The term “
Representative
,” as used herein,
shall include all directors, officers, shareholders, employees, representatives, advisors, attorneys, accountants and agents of the Recipient or the Disclosing Party, as the case may be. The term “
person
” as used in this ARTICLE X
shall be broadly interpreted to include, without limitation, any corporation, company, group, partnership, Governmental Authority or individual.
Section 10.02.
Definition of “Subject Information”
. For purposes of this ARTICLE X, the term “
Subject Information
” means all information furnished to the Recipient
or its Representatives (whether prepared by the Disclosing Party, its Representatives or otherwise and whether or not identified as being non-public, confidential or proprietary) by or on behalf of the Disclosing Party or its Representatives
relating to or involving the business, operations or affairs of the Disclosing Party or otherwise in possession of the Disclosing Party. The term “
Subject Information
” shall not include information that (A) was already in the
Recipient’s possession at the time it was first furnished to Recipient by or on behalf of Disclosing Party, if such information is not known by the Recipient to be subject to another confidentiality agreement with or other obligation of secrecy
to the Disclosing Party, its Subsidiaries or another party, or (B) becomes generally available to the public other than as a result of a disclosure by the Recipient or its Representatives, or (C) becomes available to the Recipient on a
non-confidential
basis from a source other than the Disclosing Party, its Representative or otherwise, if such source is not known by the Recipient to be bound by a confidentiality agreement with or other obligation
of secrecy to the Disclosing Party, its Representative or another party.
Section 10.03.
Confidentiality
. Each
Recipient hereby agrees that the Subject Information will be used solely for the purpose of reviewing and evaluating the transactions contemplated by this Agreement and any other agreement contemplated hereby, and that the Subject Information will
be kept confidential by the Recipient and the Recipient’s Representatives; but (A) any of such Subject Information may be disclosed to the Recipient’s Representatives (including the Recipient’s accountants, attorneys and
investment bankers) who need to know such Subject Information for the purpose of evaluating any such possible transaction between the Disclosing Party and the Recipient (it being understood that such Representatives shall be informed by the
Recipient of the confidential nature of such Subject Information and that the Recipient shall direct and cause such persons to treat such Subject Information confidentially); (B) any of such Subject Information may be disclosed by a Recipient
who has been ordered by a court to do so or is required by law to do so provided Recipient has notified the Disclosing Party before such disclosure and cooperates with the Disclosing Party if the Disclosing Party elects to pursue legal
57
means to contest and avoid the disclosure; and (C) any disclosure of such Subject Information may be made to which the Disclosing Party expressly consents in writing before any such
disclosure by Recipient. Each Recipient hereby agrees that it will not use the Subject Information to solicit customers from the Disclosing Party.
Section 10.04.
Securities Law Concerns
. Each Recipient hereby acknowledges that the Recipient is aware, and the Recipient will advise the Recipient’s Representatives who are informed as
to the matters that are the subject of this Agreement, that the United States securities laws prohibit any person who has received material, non-public information from an issuer of securities from purchasing or selling securities of such issuer or
from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
Section 10.05.
Return of Subject Information
. If this Agreement is terminated for any reason, the Recipient shall promptly
return to the Disclosing Party all written material containing or reflecting any of the Subject Information, other than information contained in any application, notice or other document filed with any Governmental Authority and not returned to the
Recipient by such Governmental Authority. In making any such filing, the Recipient will request confidential treatment of such Subject Information included in any application, notice or other document filed with any Governmental Authority.
ARTICLE XI
MISCELLANEOUS
Section 11.01.
No Survival of Representations and
Warranties
. The parties hereto agree that all of the representations, warranties and covenants contained in this Agreement shall terminate and be extinguished at Closing, except for those covenants that specifically require performance after the
Closing. Nothing in this Section 11.01 shall limit or otherwise affect the remedies available to IBG with respect to a cause of action for fraud against the person who committed the fraud.
Section 11.02.
Expenses
. Except as specifically provided in this Agreement, all costs and expenses incurred in connection
with this Agreement and all agreements and documents contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, shall be borne and paid by the party incurring such costs or expenses.
Section 11.03.
Brokerage Fees and Commissions
. IBG hereby represents to HCBI that no agent, representative or broker has
represented IBG or Independent Bank in connection with the transactions described in this Agreement. HCBI shall not have any responsibility or liability for any fees, expenses or commissions payable to any agent, representative or broker of IBG or
Independent Bank, and IBG hereby agrees to indemnify and hold harmless HCBI for any amounts owed to any agent, representative or broker of IBG or Independent Bank. Except as set forth on
Confidential Schedule 11.03,
HCBI hereby represents to
IBG that no agent, representative or broker has represented HCBI or HCB in connection with the transactions described in this Agreement. IBG shall have no responsibility or liability for any other fees, expenses or commissions payable to any agent,
representative or broker of HCBI or HCB and HCBI hereby agrees to indemnify and hold harmless IBG for any amounts owed to any other agent, representative or broker of HCBI or HCB.
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Section 11.04.
Entire Agreement
. This Agreement (including the documents and
instruments referred to herein) and the other agreements, documents, schedules and instruments executed and delivered by the parties to each other at the Closing constitute the full understanding of the parties, a complete allocation of risks
between them and a complete and exclusive statement of the terms and conditions of their agreement relating to the subject matter hereof, and supersede any and all prior agreements, whether written or oral, that may exist between the parties with
respect thereto. Except as otherwise specifically provided in this Agreement, no conditions, usage of trade, course of dealing or performance, understanding or agreement purporting to modify, vary, explain or supplement the terms or conditions of
this Agreement shall be binding unless hereafter or contemporaneously herewith made in writing and signed by the party to be bound, and no modification shall be effected by the acknowledgment or acceptance of documents containing terms or conditions
at variance with or in addition to those set forth in this Agreement.
Section 11.05.
Further Cooperation
. The
parties agree that they will, at any time and from time to time after the Closing, upon request by the other and without further consideration, do, perform, execute, acknowledge and deliver all such further acts, deeds, assignments, assumptions,
transfers, conveyances, powers of attorney, certificates and assurances as may be reasonably required in order to fully consummate the transactions contemplated hereby in accordance with this Agreement or to carry out and perform any undertaking
made by the parties hereunder.
Section 11.06.
Severability
. If any term or other provision of this Agreement is
held to be illegal, invalid or unenforceable by any rule of law or public policy, such term or provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision were not a
part hereof, and all other conditions and provisions of this Agreement shall remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or unenforceable, there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and still be legal, valid and enforceable. If any provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only as broad as is enforceable.
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Section 11.07.
Notices
. All payments (other than payments at the Closing),
notices, requests, claims, demands, instructions and other communications required or permitted to be given under this Agreement after the date hereof by any party hereto to any other party shall be in writing; and may be delivered personally, by
nationally-recognized overnight courier service, by United States mail, or by e-mail or facsimile transmission, to such party at the address or transmission numbers set forth below:
A. If given to HCBI, or to an officer thereof, in such officer’s official capacity, at HCBI’s mailing address or transmission
number set forth below (or such address or transmission number as HCBI may give notice to IBG by like notice):
Mr. W.
Phillip Johnson, Jr.
Chairman of the Board
Houston City Bancshares, Inc.
11390 Veterans Memorial Blvd.
Houston, TX 77267
Facsimile: 281-397-2429
Email: PJohnson@houstoncommunitybank.com
with a copy (which shall not constitute notice) to:
Mr. T. Alan Harris
Harris Law Firm PC
600 Congress Ave., Suite 200
Austin, Texas 78701
Facsimile: 877-876-8913
Email: alan.harris@harrislawusa.com
B. If given to IBG, or to an officer thereof, in such officer’s official capacity, at IBG’s mailing address or transmission number set forth below (or such address or transmission number as IBG
may give notice to HCBI by like notice):
Mr. David Brooks
Independent Bank Group, Inc.
1600 Redbud Blvd., Suite 400
McKinney, TX 75069
Facsimile: 972-562-5496
Email: drbrooks@independent-bank.com
with a copy (which shall not constitute
notice) to:
Mark Haynie, Esq.
Haynie Rake Repass & Lowry, P.C.
14643 Dallas Parkway, Suite 550
Dallas, Texas 75254
Facsimile: (972) 716-1850
Email: mark@hrrpc.com
Any notice given pursuant to this Agreement shall be effective (i) in the case of personal delivery, e-mail or facsimile
transmission, when received; (ii) in the case of mail, upon the earlier of actual receipt or three business days after deposit with the United States Postal Service, first class certified or registered mail, postage prepaid, return receipt
requested; and (iii) in the case of nationally-recognized overnight courier service, one business day after delivery to the courier service together with all appropriate fees or charges and instructions for overnight delivery.
Section 11.08.
GOVERNING LAW; VENUE
. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES SUBJECT TO THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
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IF A DISPUTE ARISES UNDER OR ARISES RELATED TO THIS AGREEMENT, THE PARTIES IRREVOCABLY AGREE THAT VENUE FOR SUCH DISPUTE SHALL LIE EXCLUSIVELY IN ANY COURT OF COMPETENT JURISDICTION IN COLLIN
COUNTY, TEXAS.
Section 11.09.
Multiple Counterparts; Electronic Transmission
. For the convenience of the parties
hereto, this Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all counterparts hereof so executed by the parties hereto, whether or not such counterpart shall bear the execution of each of the
parties hereto, shall be deemed to be, and shall be construed as, one and the same Agreement. An e-mail, facsimile or other electronic transmission of a signed counterpart of this Agreement shall be sufficient to bind the party or parties whose
signature(s) appear thereon.
Section 11.10.
Certain Definitions
.
A. “
Affiliate
” means any business entity, bank, or person that, directly or indirectly, controls, is controlled by, or
is under common control with, such person in question. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”) as used with respect
to any business entity, bank, or person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or by contract or
otherwise.
B. “
Best Knowledge
” means the actual knowledge of executive officers of IBG or HCBI, as
applicable, with respect to a particular matter, after reasonable inquiry.
C. “
Environmental Laws
” means any
applicable federal, state, or local laws or regulations, codes, or ordinances, now in effect and in each case as amended to date, including any judicial or administrative order, consent decree, judgment relating to pollution or protection of public
or employee health or safety or the environment, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et seq.; the Hazardous Materials Transportation
Authorization Act, as amended 49 U.S.C. § 5101, et. seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. § 6901, et. seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. §1201, et. seq.; the
Toxic Substances Control Act, 15 U.S.C. § 2601, et. seq.; the Clean Air Act, 42 U.S.C. §7401, et. seq.; and the Safe Drinking Water Act, 42 U.S.C. § 300f. et. seq.
D. “
Governmental Authority
” means any United States or foreign federal, state or local court, administrative agency,
commission or other governmental authority, Regulatory Agency or instrumentality thereof, in each case, of competent jurisdiction.
E. “
Hazardous Material
” means any pollutant, contaminant, chemical, or toxic or hazardous substance, constituent, material or waste, or any other chemical, substances, constituent or
waste including petroleum, including crude oil or any fraction thereof, or any petroleum product, defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,”
“extremely hazardous wastes,” “restricted hazardous wastes,” toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of
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similar import, under any Environmental Laws, or which is in any way regulated as hazardous or toxic by any federal, state or local government authority, agency or instrumentality, including
mixtures thereof with other materials, and including any regulated building materials such as asbestos and lead, but notwithstanding the foregoing or any other provision in this Agreement to the contrary, the words “Hazardous Material”
shall not mean or include any such Hazardous Material used, generated, manufactured, stored, disposed of or otherwise handled in normal quantities in the ordinary course of the business of the Bank in compliance with all Environmental Laws, or such
that may be naturally occurring in any ambient air, surface water, ground water, land surface or subsurface strata.
F.
“
Investment Securities
” means a security held by HCB and reflected as an asset of HCB in accordance with RAP.
G. “
Material Adverse Change
” means any material adverse change in the financial condition, assets, properties,
liabilities (absolute, accrued, contingent or otherwise), reserves, business or results of operations other than, in each case, any change, circumstance, event or effect relating to (i) any change occurring after the date hereof in any federal
or state law, rule or regulation, which change affects banking institutions and their holding companies generally, including any change affecting the Deposit Insurance Fund administered by the FDIC, or (ii) changes in general economic, legal,
regulatory or political conditions affecting financial institutions generally, including changes in interest rates.
H.
“
Property
” or “
Properties
” means all real property owned or leased by HCBI or HCB, including to properties that HCB has foreclosed on as well as their respective premises and all improvements and fixtures thereon.
I. “
Regulatory Agency
” means (i) the SEC, (ii) any
self-regulatory
organization, (iii) the FRB, (iv) the FDIC, (v) the TDB, and (vi) any other federal or state governmental or regulatory agency or authority.
J. “
Subsidiary
” means, when used with reference to any entity, any corporation, a majority of the outstanding voting
securities of which are owned, directly or indirectly, by such entity or any partnership, joint venture or other enterprise in which such entity has, directly or indirectly, any equity interest.
Section 11.11.
Specific Performance
. Each of the parties hereto acknowledges that the other party would be irreparably
damaged and would not have an adequate remedy at law for money damages if that any of the covenants contained in this Agreement were not performed in accordance with its terms or otherwise were materially breached. Each of the parties hereto
therefore agrees that, without the necessity of proving actual damages or posting bond or other security, the other party shall be entitled to seek temporary and/or permanent injunction or injunctions to prevent breaches of such performance and to
specific enforcement of such covenants in addition to any other remedy to which such other party may be entitled, at law or in equity.
Section 11.12.
Attorneys’ Fees and Costs
. If attorneys’ fees or other costs are incurred to secure performance of any of the obligations herein provided for, or to establish damages
for the
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breach thereof, or to obtain any other appropriate relief, whether by way of prosecution or defense, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs
incurred therein.
Section 11.13.
Rules of Construction
. When a reference is made in this Agreement to an Article,
Section, Exhibit or Confidential Schedule, such reference shall be to an Article or Section of, or an Exhibit or Confidential Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are
for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed
to be followed by the words “without limitation.” The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision in this Agreement. Each use herein of the masculine, neuter or feminine gender shall be deemed to include the other genders. Each use herein of the plural shall include the singular and vice versa, in each case as the context
requires or as is otherwise appropriate. The word “or” is used in the inclusive sense. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to
all attachments thereto and instruments incorporated therein. References to a person are also to its permitted successors or assigns.
Section 11.14.
Binding Effect; Assignment
. All of the terms, covenants, representations, warranties and conditions of this Agreement shall be binding upon, and inure to the benefit of and be
enforceable by, the parties hereto and their respective heirs, successors, representatives and permitted assigns. Nothing expressed or referred to herein is intended or shall be construed to give any person other than the parties hereto any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any provision herein contained, it being the intention of the parties hereto that this Agreement, the assumption of obligations and statements of responsibilities hereunder,
and all other conditions and provisions hereof are for the sole benefit of the parties to this Agreement and for the benefit of no other person. Nothing in this Agreement shall act to relieve or discharge the obligation or liability of any third
party to any party to this Agreement, nor shall any provision give any third party any right of subrogation or action over or against any party to this Agreement. No party to this Agreement shall assign this Agreement, by operation of law or
otherwise, in whole or in part, without the prior written consent of the other party. Any assignment made or attempted in violation of this Section 11.14 shall be void and of no effect.
Section 11.15.
Public Disclosure
. None of IBG, Independent Bank, HCBI or HCB will make, issue or release, or cause to be
made, issued or released, any announcement, statement, press release, acknowledgment or other public disclosure of the existence, terms, conditions or status of this Agreement or the transactions contemplated hereby without the prior written consent
of the other parties to this Agreement. Notwithstanding the foregoing, IBG and HCBI, upon prior notice to the other party, will be permitted to make (i) disclosure to their own officers, directors, employees and shareholders, and (ii) any
public disclosures or governmental filings as legal counsel may deem necessary to maintain compliance with or to prevent violations of applicable federal or state laws or regulations or that may be necessary to obtain regulatory approval for the
transactions contemplated hereby.
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Section 11.16.
Extension; Waiver
. At any time before the Closing Date, the
parties hereto, by action taken or authorized by their respective boards of directors, may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties contained herein or in any document, certificate or writing delivered pursuant hereto or (iii) waive compliance with any of the agreements or conditions contained herein.
Any agreement on the part of a party hereto to any such extension of waiver shall be valid only if set forth in a written instrument signed on behalf of such party in the manner provided in Section 11.17, but such extension or waiver or failure
to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. No party to this Agreement shall by any act (except by a written
instrument given pursuant to Section 11.17) be deemed to have waived any right or remedy hereunder or to have acquiesced in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising any right,
power or privilege hereunder by any party hereto shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver of any party of any right or remedy on any one occasion shall not be construed as a bar to any right or remedy that such party would otherwise have on any future occasion or to any right or remedy that any other party
may have hereunder.
Section 11.17.
Amendments
. This Agreement may be amended by the parties hereto, by action
taken or authorized by their respective boards of directors, at any time before or after approval of this Agreement by the HCBI shareholders; but after the approval of this Agreement by the HCBI shareholders, there shall not be, without the further
approval of the HCBI shareholders, any amendment of this Agreement that decreases the consideration to be paid for the HCBI Shares pursuant to Section 1.05 that materially and adversely affects the rights of the HCBI shareholders hereunder.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
[Signature Page to Follow]
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[Signature Page to Agreement and Plan of Reorganization]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first
above written.
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INDEPENDENT BANK GROUP, INC.
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By:
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/s/ David R. Brooks
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David R. Brooks
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Chairman of the Board and CEO
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HOUSTON CITY BANCSHARES, INC.
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By:
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/s/ W. Phillip Johnson, Jr.
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W. Phillip Johnson, Jr.
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Chairman of the Board
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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this
“
Merger Agreement
”), is made effective as of , 2014, by and among IBGHCB ACQUISITION CORPORATION, a Texas corporation (“
Newco
”), and HOUSTON
CITY BANCSHARES, INC., a Texas corporation and registered bank holding company with its principal offices in Houston, Texas (“
HCBI
”), and joined in by INDEPENDENT BANK GROUP, INC., a Texas corporation and registered bank holding
company with its principal offices in McKinney, Texas (“
IBG
”).
RECITALS:
WHEREAS, HCBI and IBG are parties to that certain Agreement and Plan of Reorganization dated as of June 2, 2014 (the
“
Reorganization Agreement
”). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Reorganization Agreement;
WHEREAS, IBG desires to acquire all of the issued and outstanding common shares of HCBI, par value $5.00 per share (the “
HCBI Shares
”), pursuant to the terms of the Reorganization
Agreement;
WHEREAS, IBG and HCBI desire to effect such acquisition by merging Newco with and into HCBI (the
“
Merger
”) pursuant to the terms and conditions of this Merger Agreement;
WHEREAS, Newco is a corporation
duly organized and existing under the laws of the State of Texas with authorized capital consisting of 1,000 common shares, par value $1.00 per share (“
Newco Shares
”), of which 1,000 shares are issued and outstanding as of the date
of this Merger Agreement;
WHEREAS, the majority of the respective board of directors of HCBI and Newco, pursuant to the
authority given by and in accordance with the provisions of the Texas Business Organizations Code, as amended (the “
TBOC
”), has approved this Merger Agreement and the Merger and has authorized the execution hereof; and
WHEREAS, as and when required by the provisions of this Merger Agreement, all such action as may be necessary or appropriate shall be
taken by Newco and HCBI in order to consummate the Merger.
AGREEMENT:
NOW, THEREFORE, Newco and HCBI, joined by IBG, hereby agree that Newco shall be merged with and into HCBI on the following terms and
conditions:
1.
Merger of Newco and HCBI
. At the Effective Time (as defined in Section 16), Newco shall be merged
with and into HCBI pursuant to the provisions of Chapter 10 of the TBOC.
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2.
Effects of the Merger
. The Merger shall have the effects set forth in
Section 10.008 of the TBOC. After the Merger, HCBI shall continue as the corporation resulting from the Merger (the “
Resulting Corporation
”), and the separate corporate existence of Newco shall cease. The name of the Resulting
Corporation shall be “Houston City Bancshares, Inc.” The existing offices and facilities of HCBI immediately preceding the Merger shall be the principal offices and facilities of the Resulting Corporation after the Merger. At the Effective
Time, all rights, title and interests to all real estate and other property owned by each of Newco and HCBI shall be allocated to and vested in the Resulting Corporation without reversion or impairment, without further act or deed, and without any
transfer or assignment having occurred, but subject to any existing liens or encumbrances thereon. At the Effective Time, all liabilities and obligations of Newco and HCBI shall be allocated to the Resulting Corporation, and the Resulting
Corporation shall be the primary obligor therefor, and no other party to the Merger shall be liable therefor. At the Effective Time, a proceeding pending by or against either Newco or HCBI may be continued as if the Merger did not occur, or the
Resulting Corporation may be substituted in the proceedings.
3.
Certificate of Formation and Bylaws
. As a result of
the Merger, the Articles of Incorporation and Bylaws of HCBI shall continue in effect as the Articles of Incorporation and Bylaws of the Resulting Corporation until the same shall be amended and changed as provided by applicable law.
4.
Directors and Officers
. The directors and officers of Newco at the Effective Time shall be the directors and officers of the
Resulting Corporation and shall hold office from the Effective Time until their respective successors are duly elected or appointed and qualified in the manner provided in the Articles of Incorporation and Bylaws of the Resulting Corporation or as
otherwise provided by applicable law.
5.
Conversion of HCBI Shares
. At the Effective Time, each HCBI Share issued and
outstanding immediately before the Effective Time, shall, by virtue of the Merger, and without any action on the part of any holder thereof, be converted into the right to receive the consideration set forth in Section 1.05 of the
Reorganization Agreement. At the Effective Time, each HCBI Share that is owned by HCBI (other than as a fiduciary) shall automatically be canceled and retired and all rights with respect thereto shall cease to exist, and no consideration shall be
delivered in exchange therefor.
6.
Conversion of Newco Shares
. The Newco Shares outstanding at the Effective Time
shall, at the Effective Time and by virtue of the Merger, be converted into a like number of common shares of the Resulting Corporation with a par value of $1.00 per share, with the effect that the number of common shares of the Resulting
Corporation outstanding immediately after the Effective Time shall be equal to the aggregate number of Newco Shares outstanding immediately before the Effective Time, all of which shall continue to be owned by IBG. The authorized number of common
shares of the Resulting Corporation shall be the same as the authorized number of Newco Shares immediately before the Effective Time.
7.
Rights of Former HCBI Shareholders
. Until surrendered for exchange in accordance with the Reorganization Agreement, each certificate and document theretofore
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representing HCBI Shares shall, from and after the Effective Time, represent for all purposes only the right to receive the applicable consideration therefor set forth in Section 1.05 of the
Reorganization Agreement. No interest will be paid on such consideration.
8.
Share Transfer Books
. The share transfer
books of HCBI shall be closed as of the close of business at the Effective Time, and no transfer of record of any of the HCBI Shares shall take place thereafter.
9.
Shareholder Approval
. This Merger Agreement and the Merger shall be submitted to the shareholders of HCBI at a meeting called to be held as promptly as practicable and to the sole shareholder of
Newco by written consent of thereof. Upon approval by the requisite votes of the shareholders of HCBI and the approval of the sole shareholder of Newco, this Merger Agreement shall be made effective as soon as practicable thereafter in the manner
provided in the Reorganization Agreement.
10.
Dissenters’ Rights
. Any shareholder of HCBI who objects to the
Merger and follows the procedure for dissent as set forth in Subchapter H of Chapter 10 of the TBOC shall be entitled to the rights and benefits afforded to dissenting shareholders by such statute.
11.
Conditions to Consummation of the Merger
. The consummation of the Merger as provided herein shall be conditioned upon the
satisfaction of the conditions set forth in the Reorganization Agreement, any or all of which may be waived in accordance with the terms and provisions of the Reorganization Agreement.
12.
Termination
. This Merger Agreement may be terminated and abandoned at any time before or on the Closing Date, whether before
or after action thereon by the shareholders of HCBI or the sole shareholder of Newco, pursuant to the terms and provisions of the Reorganization Agreement.
13.
Effect of Termination
. In the event of the termination and abandonment of this Merger Agreement pursuant to the provisions of Section 12, the liability by reason of this Merger Agreement
or the termination thereof on the part of either HCBI, IBG or the directors, officers, employees, agents or shareholders of either of them shall be determined pursuant to the terms and provisions of the Reorganization Agreement. Such terms and
provisions are hereby incorporated herein by reference for all purposes.
14.
Waiver, Amendment and Modification
. Any
of the terms or conditions of this Merger Agreement may be waived at any time, whether before or after action thereon by the shareholders of HCBI or the sole shareholder of Newco, by the party that is entitled to the benefits thereof. This Merger
Agreement may be modified or amended at any time, whether before or after action thereon by the shareholders of HCBI or the sole shareholder of Newco, by IBG and HCBI; but in no event may any amendment hereto be made after action by the shareholders
of HCBI that affects the value of the consideration to be received by the shareholders of HCBI set forth in Section 1.05 of the Reorganization Agreement or that materially and adversely affects the rights of HCBI’s shareholders hereunder
without the requisite approval of such shareholders. Any waiver, modification or amendment of this Merger Agreement shall be in writing.
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15.
Time and Place of the Closing and Closing Date
. Subject to the terms and
conditions of this Merger Agreement, a meeting (the “
Closing
”) will take place in accordance with the terms of the Reorganization Agreement, at which the parties to this Merger Agreement will exchange certificates, letters and
other documents in order to confirm that all of the conditions set forth in Articles VII and VIII of the Reorganization Agreement have been satisfied or waived or whether any condition exists that would permit a party to this Merger Agreement or the
Reorganization Agreement to terminate this Merger Agreement. If no such condition then exists or if no party elects to exercise any right it may have to terminate this Merger Agreement, then and thereupon the appropriate parties shall execute such
documents and instruments as may be necessary or appropriate in order to effect the transactions contemplated by this Merger Agreement.
16.
Effective Time
. The Merger and the other transactions contemplated by this Merger Agreement shall become effective on the date and at the time the Certificate of Merger reflecting the Merger
shall become effective with the Secretary of State of the State of Texas (the “
Effective Time
”). The Certificate of Merger shall be filed as soon as practicable after the Closing.
17.
Multiple Counterparts; Electronic Transmission
. For the convenience of the parties hereto, this Merger Agreement may be
executed in multiple counterparts, each of which shall be deemed an original, and all counterparts hereof so executed by the parties hereto, whether or not such counterpart shall bear the execution of each of the parties hereto, shall be deemed to
be, and shall be construed as, one and the same Merger Agreement. A facsimile or other electronic transmission of a signed counterpart of this Merger Agreement shall be sufficient to bind the party or parties whose signature(s) appear thereon.
18.
GOVERNING LAW; VENUE
. THIS MERGER AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TEXAS APPLYING TO CONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN THE STATE OF TEXAS, WITHOUT REGARD FOR THE PROVISIONS THEREOF REGARDING CHOICE OF LAW. VENUE FOR DISPUTES ARISING UNDER THIS MERGER AGREEMENT SHALL BE SOLELY IN COLLIN
COUNTY, TEXAS.
19.
Rules of Construction
. Descriptive headings as to the contents of particular sections are for
convenience only and shall not control or affect the meaning, construction or interpretation of any provision of this Merger Agreement. All articles and sections referred to herein are articles and sections, respectively, of this Merger Agreement.
Each use herein of the masculine, neuter or feminine gender shall be deemed to include the other genders. Each use herein of the plural shall include the singular and vice versa, in each case as the context requires or as it is otherwise
appropriate. The word “or” is used in the inclusive sense.
20.
Binding Effect
. All of the terms and
conditions of this Merger Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the parties hereto and their respective successors, representatives and permitted assigns. Nothing expressed or referred to
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herein is intended or shall be construed to give any person other than the parties hereto any legal or equitable right, remedy or claim under or in respect of this Merger Agreement, or any
provision herein contained, it being the intention of the parties hereto that this Merger Agreement, the assumption of obligations and statements of responsibilities hereunder, and all other conditions and provisions hereof are for the sole benefit
of the parties to this Merger Agreement and for the benefit of no other person. Nothing in this Merger Agreement shall act to relieve or discharge the obligation or liability of any third party to any party to this Merger Agreement, nor shall any
provision give any third party any right of subrogation or action over or against any party to this Merger Agreement. No party to this Merger Agreement shall assign this Merger Agreement, by operation of law or otherwise, in whole or in part,
without the prior written consent of the other parties. Any assignment made or attempted in violation of this Section 20 shall be void and of no effect.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement to be executed by
their duly authorized officers as of the date first above written.
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HOUSTON CITY BANCSHARES, INC.
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By:
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W. Phillip Johnson, Jr.
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Chairman of the Board
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IBGHCB ACQUISITION CORPORATION
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By:
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David R. Brooks
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Chairman of the Board
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IBG hereby joins in the foregoing Merger Agreement, and undertakes that it will be bound
thereby and will do and perform all acts and things therein referred to or provided to be done by it.
IN WITNESS
WHEREOF
, IBG has caused this undertaking to be made in counterparts by its duly authorized officer and its corporate seal to be hereunto affixed as of the date first above written.
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INDEPENDENT BANK GROUP, INC.
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By:
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David R. Brooks
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Chairman of the Board and CEO
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EXHIBIT B
VOTING AGREEMENT
THIS VOTING AGREEMENT (this “
Voting
Agreement
”) dated June 2, 2014, is executed by and among INDEPENDENT BANK GROUP, INC., a Texas corporation and registered bank holding company with its principal offices in McKinney, Texas (“
IBG
”), HOUSTON CITY
BANCSHARES, INC., a Texas corporation with its principal offices in Houston, Texas (“
HCBI
”), and the shareholders of HCBI whose names are set forth on the signature page hereto (individually, a “
Shareholder
” and
collectively, the “
Shareholders
”).
RECITALS:
WHEREAS, HCBI and IBG are parties to that certain Agreement and Plan of Reorganization, dated as of June 2, 2014 (the
“
Reorganization Agreement
”), which provides for the acquisition of HCBI by IBG through the merger of IBGHCB Acquisition Corporation, a wholly owned subsidiary of IBG (“
Newco
”), with and into HCBI (the
“
Merger
”). Terms with their initial letter capitalized and not otherwise defined herein shall have the meanings given them in the Reorganization Agreement;
WHEREAS, the Reorganization Agreement requires that HCBI deliver this Voting Agreement to IBG; and
WHEREAS, HCBI and IBG are relying on this Voting Agreement in incurring expenses in reviewing the business of HCBI, in preparing the Registration Statement and related Proxy Statement for the meeting of
shareholders of HCBI, in proceeding with the filing of applications for regulatory approvals, and in undertaking other actions necessary for the consummation of the Merger.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the foregoing and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, HCBI, IBG and the Shareholders undertake, promise, covenant and agree with each other as follows:
1. As of the date hereof, the Shareholders own the common shares of HCBI (“
HCBI Shares
”), set forth beside their
respective names on
Schedule 1
attached hereto (with respect to each Shareholder, all such HCBI Shares and any HCBI Shares hereafter acquired by such Shareholder before the termination of this Voting Agreement, collectively, such
Shareholder’s “
Shares
”).
2. Each Shareholder represents that he, she or it has the full legal capacity
and authority to execute, deliver and perform this Voting Agreement, including the exclusive right to vote such Shareholder’s Shares. Each Shareholder hereby agrees to vote at the shareholders’ meeting of HCBI called to consider and act
upon the Merger (the “
Meeting
”) such Shareholder’s Shares in favor of approval of the Reorganization Agreement, the Merger, and all of the agreements and transactions contemplated by the Reorganization Agreement.
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3. If HCBI conducts a meeting of, solicits written consents from or otherwise seeks a vote
of its shareholders with respect to any Acquisition Proposal (as that term is defined in the Reorganization Agreement) or any other matter which may contradict any provision of this Voting Agreement or may prevent IBG or HCBI from consummating the
Merger, then each Shareholder shall vote such Shareholder’s Shares in the manner most favorable to consummation of the Merger and the transactions contemplated by the Reorganization Agreement.
Notwithstanding, the foregoing sentence, the Shareholders may vote in favor of a Superior Proposal (as that term is defined in the
Reorganization Agreement).
4. Each Shareholder hereby covenants and agrees that, until this Voting Agreement is terminated in
accordance with its terms, each Shareholder will not, and will not agree to, directly or indirectly, without the prior written consent of IBG, (i) sell, assign, transfer or dispose of any of such Shareholder’s Shares, (ii) hypothecate
such Shareholder’s Shares under terms that would prevent the voting thereof, (iii) deposit such Shareholder’s Shares into a voting trust or enter into a voting agreement or arrangement with respect to such Shareholder’s Shares or
grant any proxy with respect thereto except as herein provided, or (iv) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect sale, assignment, transfer or other disposition of any of such
Shareholder’s Shares, in connection with a transaction pursuant to which 25% or more of the voting power of HCBI Shares is, or control of HCBI otherwise is, transferred to a person or entity other than a party to this Voting Agreement.
Notwithstanding any of the foregoing, any Shareholder may (i) make such gifts of such Shareholder’s Shares as such
Shareholder may choose to make, (ii) transfer such Shares to trusts or other entities controlled by the Shareholder or for estate planning purposes, so long as the recipient of such Shareholder’s Shares executes and delivers an amendment
to this Voting Agreement whereby such recipient becomes bound by the terms of this Voting Agreement.
5. This Voting Agreement
shall continue in effect until the earlier to occur of (i) the termination of the Reorganization Agreement, as it may be amended or extended from time to time, or (ii) the consummation of the transactions contemplated by the Reorganization
Agreement.
6. If that a Shareholder transfers a certificate representing any of such Shareholder’s Shares before the
Meeting, HCBI shall require such certificate to bear the following endorsement, noted conspicuously thereon:
“The shares
represented by this certificate are subject to the terms of a Voting Agreement dated June 2, 2014, a copy of which is on file in the principal office of Houston City Bancshares, Inc.”
7. This Voting Agreement may not be modified, amended, altered or supplemented with respect to a particular Shareholder except upon the
execution and delivery of a written agreement executed by HCBI, IBG and such Shareholder.
8. This Voting Agreement may be
executed in any number of counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. An electronic or facsimile transmission of a signed counterpart of this Voting Agreement shall be
sufficient to bind the party or parties whose signature(s) appear thereon.
B-2
9. This Voting Agreement, together with the Reorganization Agreement and the agreements
contemplated thereby, embody the entire agreement and understanding of the parties hereto in respect to the subject matter contained herein. This Voting Agreement supersedes all prior agreements and understandings among the parties with respect to
such subject matter contained herein.
10. All notices, requests, demands and other communications required or permitted
hereby shall be in writing and shall be deemed to have been duly given if delivered by hand or mail, certified or registered mail (return receipt requested) with postage prepaid to the addresses of the parties hereto set forth on below their
signature on the signature pages hereof or to such other address as any party may have furnished to the others in writing in accordance herewith.
11. THIS VOTING AGREEMENT AND THE RELATIONS AMONG THE PARTIES HERETO ARISING FROM THIS VOTING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. VENUE FOR
DISPUTES ARISING UNDER THIS AGREEMENT SHALL BE SOLELY IN COLLIN COUNTY, TEXAS.
[Signature Page to Follow]
B-3
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date above
written.
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HOUSTON CITY BANCSHARES, INC.
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By:
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W. Phillip Johnson, Jr.
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Chairman of the Board
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INDEPENDENT BANK GROUP, INC.
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By:
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David R. Brooks
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Chairman of the Board and CEO
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B-4
[Signature Page to Voting Agreement]
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SHAREHOLDER
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(Individual)
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Signature
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Printed Name
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SHAREHOLDER
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(Entity)
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Entity Name
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By:
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Name:
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Title:
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B-5
SCHEDULE 1
VOTING AGREEMENT SHAREHOLDERS
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Name of Shareholder
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Number of Shares
of HCBI Shares
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TOTAL NO. OF SHARES
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TOTAL VOTING POWER
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B-6
EXHIBIT C
RELEASE
(Director)
THIS RELEASE (the “
Release
”), effective as of ,
2014, is made by (the “
Director
”), a director of Houston City Bancshares, Inc. (“
HCBI
”) and
Houston Community Bank, N.A. (“HCB”), Houston, Texas, in favor of HCBI and HCB.
RECITALS:
WHEREAS,
pursuant to that certain Agreement and Plan of Reorganization (the “
Agreement
”), dated as of
June 2, 2014, by and between Independent Bank Group, Inc. (“
IBG
”) and HCBI, it is a condition to the consummation of the transactions contemplated by the Agreement that the Director shall have executed and delivered to IBG an
instrument releasing HCBI and HCB from any and all claims of such Director (except for certain matters described herein);
WHEREAS,
the purpose of this Release is to serve as the instrument referred to in Section 5.17 and Section 8.11 of the
Agreement; and
WHEREAS,
the Director desires to enter into this Release in consideration of the matters set forth
herein.
AGREEMENT:
NOW, THEREFORE,
for and in consideration of $1.00 and other good and valuable consideration, the receipt and sufficiency of which is hereby expressly acknowledged, the Director agrees as follows:
1. Attached hereto is a list of all loans outstanding from HCB to the Director. The Director acknowledges that as of the date
hereof there are no existing claims or defenses, personal or otherwise, or rights of set off whatsoever against HCBI or HCB, except as a result of the Director’s capacity as a depositor with HCB or pursuant to other written contractual
obligations of HCB to the Director. Effective as of the effective time of the acquisition of HCBI and HCB by IBG pursuant to the Agreement, the Director for himself and on behalf of his heirs and assigns (the “
Director Releasing
Parties
”) releases, acquits and forever discharges HCBI and HCB and its predecessors, successors, assigns, officers, directors, employees, agents and servants, and all persons, natural or corporate, in privity with them or any of them, from
any and all claims or causes of action of any kind whatsoever, at common law, statutory or otherwise, which the Director Releasing Parties, or any of them, has now, known or unknown, now existing or that may hereafter arise in respect of any and all
agreements and obligations incurred on or before the date hereof, or in respect of any event occurring or circumstances existing on or before the date hereof; but HCBI and HCB shall not be released from any obligations or liabilities to the
Director (i) pursuant to the provisions of the articles of incorporation or association and bylaws of HCBI or HCB regarding the indemnification of directors, and (ii) in connection with any written contractual obligations of HCB to the
Director existing on the date of this Release.
C-1
2. It is expressly understood and agreed that the terms hereof are contractual and not
merely recitals, and that the agreements herein contained and the consideration herein transferred is to compromise doubtful and disputed claims, and that no releases made or other consideration given hereby or in connection herewith shall be
construed as an admission of liability, all liability being expressly denied by HCBI and HCB. The Director hereby represents and warrants that the consideration hereby acknowledged for entering into this Release and the transactions contemplated
hereby is greater than the value of all claims, demands, actions and causes of action herein relinquished, released, renounced, abandoned, acquitted, waived and/or discharged, and that this Release is in full settlement, satisfaction and discharge
of any and all such claims, demands, actions, and causes of action that the Director may have or be entitled to against HCBI and HCB and its predecessors, assigns, legal representatives, officers, directors, employees, attorneys and agents other
than obligations or liabilities to the Director (i) pursuant to the provisions of the articles of incorporation or association and bylaws of HCBI and HCB regarding the indemnification of directors, and (ii) in connection with any written
contractual obligations of HCB to the Director existing on the date of this Release.
3. The Director represents and warrants
that he has full power and authority to enter into, execute and deliver this Release, all proceedings required to be taken to authorize the execution, delivery and performance of this Release and the agreements and undertakings relating hereto and
the transactions contemplated hereby have been validly and properly taken and this Release constitutes a valid and binding obligation of the Director in the capacity in which executed. The Director further represents and warrants that he has entered
into this Release freely of his own accord and without reliance on any representations of any kind or character not set forth herein. The Director enters into this release having had the opportunity to seek the advice of his own legal counsel.
4. This Release shall be governed by, and construed in accordance with, the laws of the State of Texas, without regard to the
laws that might otherwise govern under applicable principles of conflicts of law. If any provision of this Release or the application thereof to any person or circumstance shall be determined to be invalid or unenforceable to any extent, such
provision shall be deemed severable, the remainder of this Release and the application of all other provisions shall not be affected thereby and shall be enforced to the greatest extent permitted by law. This Release is executed as of the date first
above written. As used herein, the singular includes the plural, the masculine includes the feminine and neuter, and vice versa.
[Signature Page to Follow]
C-2
[Signature Page to Release]
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STATE OF TEXAS
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§
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§
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COUNTY OF
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This instrument was acknowledged before me on
, 2014, by
, individually.
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Notary Public in and for the State of Texas
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My Commission Expires:
C-3
RELEASE
(Officer)
THIS RELEASE (the “
Release
”), effective as of
, 2014, is made by (the “
Officer
”), an
officer of Houston City Bancshares, Inc. (“
HCBI
”) or Houston Community Bank, N.A. (“
HCB
”), Houston, Texas, in favor of HCBI and HCB.
RECITALS:
WHEREAS,
pursuant to that certain Agreement and Plan of
Reorganization (the “
Agreement
”), dated as of June 2, 2014, by and between Independent Bank Group, Inc. (“
IBG
”) and HCBI, it is a condition to the consummation of the transactions contemplated by the
Agreement that the Officer shall have executed and delivered to IBG an instrument releasing HCBI and HCB from any and all claims of such Officer (except for certain matters described herein);
WHEREAS,
the purpose of this Release is to serve as the instrument referred to in Section 5.17 and Section 8.11 of the
Agreement; and
WHEREAS,
the Officer desires to enter into this Release in consideration of the matters set forth
herein.
AGREEMENT:
NOW, THEREFORE,
for and in consideration of $1.00 and other good and valuable consideration, the receipt and sufficiency of which is hereby expressly acknowledged, the Officer agrees as follows:
1. Attached hereto is a list of all loans outstanding from HCB to the Officer. The Officer acknowledges that as of the date
hereof there are no existing claims or defenses, personal or otherwise, or rights of set off whatsoever against HCBI or HCB, except (i) as a result of the Officer’s capacity as a depositor with HCB or pursuant to other written contractual
obligations of HCB to the Officer; (ii) for salary or bonus due to such Officer from HCB in the ordinary course of business; or (iii) in connection with medical claims not yet filed. Effective as of the effective time of the acquisition of
HCBI and HCB by IBG pursuant to the Agreement, the Officer for himself and on behalf of his heirs and assigns (the “
Officer Releasing Parties
”) releases, acquits and forever discharges HCBI, HCB and their respective predecessors,
successors, assigns, officers, directors, employees, agents and servants, and all persons, natural or corporate, in privity with them or any of them, from any and all claims or causes of action of any kind whatsoever, at common law, statutory or
otherwise, which the Officer Releasing Parties, or any of them, has now, known or unknown, now existing or that may hereafter arise in respect of any and all agreements and obligations incurred on or before the date hereof, or in respect of any
event occurring or circumstances existing on or before the date hereof; but HCBI and HCB shall not be released from any obligations or liabilities to the Officer (i) in connection with any written contractual obligations of HCB to the Officer
existing on the date of this Release; (ii) accrued compensation and benefits; (iii) in connection with medical claims not yet filed; and (iv) pursuant to the provisions of the articles of incorporation or association and bylaws of
HCBI or HCB regarding the indemnification of officers.
C-4
2. It is expressly understood and agreed that the terms hereof are contractual and not
merely recitals, and that the agreements herein contained and the consideration herein transferred is to compromise doubtful and disputed claims, and that no releases made or other consideration given hereby or in connection herewith shall be
construed as an admission of liability, all liability being expressly denied by HCBI and HCB. The Officer hereby represents and warrants that the consideration hereby acknowledged for entering into this Release and the transactions contemplated
hereby is greater than the value of all claims, demands, actions and causes of action herein relinquished, released, renounced, abandoned, acquitted, waived and/or discharged, and that this Release is in full settlement, satisfaction and discharge
of any and all such claims, demands, actions, and causes of action that the Officer may have or be entitled to against HCBI and HCB and their respective predecessors, assigns, legal representatives, officers, directors, employees, attorneys and
agents other than obligations or liabilities to the Officer (i) in connection with any written contractual obligations of HCB to the Officer existing on the date of this Release; (ii) any accrued compensation and benefits; (iii) in
connection with medical claims not yet filed; and (iv) pursuant to the provisions of the articles of incorporation or association and bylaws of HCBI and HCB regarding the indemnification of officers.
3. The Officer represents and warrants that he has full power and authority to enter into, execute and deliver this Release, all
proceedings required to be taken to authorize the execution, delivery and performance of this Release and the agreements and undertakings relating hereto and the transactions contemplated hereby have been validly and properly taken and this Release
constitutes a valid and binding obligation of the Officer in the capacity in which executed. The Officer further represents and warrants that he has entered into this Release freely of his own accord and without reliance on any representations of
any kind or character not set forth herein. The Officer enters into this release having had the opportunity to seek the advice of his own legal counsel.
4. This Release shall be governed by, and construed in accordance with, the laws of the State of Texas, without regard to the laws that might otherwise govern under applicable principles of conflicts of
law. If any provision of this Release or the application thereof to any person or circumstance shall be determined to be invalid or unenforceable to any extent, such provision shall be deemed severable, the remainder of this Release and the
application of all other provisions shall not be affected thereby and shall be enforced to the greatest extent permitted by law. This Release is executed as of the date first above written. As used herein, the singular includes the plural, the
masculine includes the feminine and neuter, and vice versa.
[Signature Page to Follow]
C-5
[Signature Page to Release]
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STATE OF TEXAS
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§
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§
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COUNTY OF
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§
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This instrument was acknowledged before me on
, 2014, by
, individually.
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Notary Public in and for the State of Texas
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My Commission Expires:
C-6
EXHIBIT D
DIRECTOR
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT (the “
Support Agreement
”) is made and entered into as of the day of
, 2014, by and between Independent Bank Group, a Texas corporation (“
IBG
”) and
(the “
Director
”).
RECITALS:
WHEREAS, IBG and Houston Community Bancshares, Inc.
(“
HCBI
”), have entered into that certain Agreement and Plan of Reorganization, dated as of June 2, 2014 (the “
Reorganization Agreement
”), which provides for the acquisition of Houston Community Bank, N.A., a
wholly owned subsidiary of HCBI (“
HCB
”), by IBG through the merger of HCB with and into Independent Bank, IBG’s wholly owned subsidiary. Terms with their initial letter capitalized and not otherwise defined herein shall have
the meanings given them in the Reorganization Agreement;
WHEREAS, the Director is a director of HCBI and HCB;
WHEREAS, in connection with consummation of the transactions contemplated by the Reorganization Agreement, IBG and the Director have
agreed to enter into this Support Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and intending to be legally bound hereby, IBG and
the Director agree as follows:
1.
Support
. The Director agrees to use reasonable efforts to refrain from harming
HCB’s goodwill and their customer and client relationships.
2.
Covenants
. For and in consideration of
consummation of the transactions contemplated by the Reorganization Agreement, the Director agrees that for a period of two years after the Closing Date (as defined in the Reorganization Agreement) (the “Support Period”), the Director will
not, without the prior written consent of IBG, directly or indirectly, (i) solicit banking business of any current customers of HCB; (ii) acquire more than 2% of, charter, operate or own control of, any financial services company or
institution that provides banking services similar to those provided by HCB; (iii) serve as an officer, director, employee, agent or consultant to any financial services company or institution that provides banking services similar to those
provided by HCB, or (iv) establish or operate a branch or other office of a financial services company or institution that provides banking services similar to those provided by HCB, in each case set forth in clauses (ii), (iii) and (iv),
that has its main office, a branch office, or other office in Houston-Sugar Land-Baytown Metropolitan Statistical Area.
D-1
Notwithstanding the provisions of this Section 2, the Director shall not be prohibited
from (i) serving as an officer, director, employee, agent or consultant of the financial services company or institution set forth on
Confidential Schedule 1
attached hereto (an “
Excepted Company
”), or
(ii) establishing or operating a branch or other office of an Excepted Company; but the Director shall be subject to the prohibitions in Section 2(a)(i) even in his role with an Excepted Company.
The Director agrees that (i) this Support Agreement is entered into in connection with the sale to IBG of the goodwill of the
business of HCBI and HCB, (ii) is ancillary to the Agreement and Plan of Reorganization, (iii) the Director is receiving valuable consideration in the Reorganization Agreement for this Support Agreement, and (iv) the limitations as to
time, geographical area, and scope of activity to be restrained by this Support Agreement are reasonable and acceptable, and do not impose any greater restraint than is reasonably necessary to protect the goodwill and other business interests that
IBG is acquiring from HCBI and HCB.
This Support Agreement creates a narrowly tailored advance approval requirement in order
to avoid unfair competition and irreparable harm to IBG and Independent Bank, the successor to HCB, and is not intended or to be construed as a general restraint from engaging in a lawful profession or a general covenant against competition. Nothing
herein will prohibit (i) ownership of less than 2% of the publicly traded capital stock of a corporation so long as this is not a controlling interest, or (ii) ownership of mutual fund investments. The Director may not avoid the purpose
and intent of this paragraph by engaging in conduct within the geographically limited area from a remote location through means such as telecommunications, written correspondence, computer generated or assisted communications, or other similar
methods. The Director agrees that if, at some later date, a court of competent jurisdiction determines that the non-solicitation agreement set forth in this Support Agreement does not meet the criteria set forth by applicable law, this Support
Agreement may be reformed by the court and enforced to the maximum extent permitted under applicable law.
3.
Confidentiality, Non-Solicitation of Employees
. The Director agrees that he is familiar with HCB
’
s confidential business information and trade secrets, including without limitation, customer lists and information, account lists,
and other business plans and information, and salary, pay scale, capabilities, experiences, skill and desires of HCB
’
s employees (the “
Confidential Information
”). The Confidential Information does not include any
information that (i) is generally available to and known by the public, (ii) was available on a non-confidential basis from a source other than HCB, or (iii) was independently acquired or developed without violating any laws or
obligations under this Support Agreement. The Director agrees to maintain the confidentiality of the Confidential Information and not use such Confidential Information for any purpose. The Director further covenants and agrees that, during the
Support Period, he shall not recruit, directly or indirectly, any employees of Independent Bank, as the successor to HCB, nor shall he contact or communicate with any employees of Independent Bank for the purpose of inducing employees to terminate
their employment with Independent Bank. Notwithstanding the foregoing, the Director shall not be prohibited from hiring any employee who (i) is terminated by Independent Bank or who has voluntarily resigned from employment without direct or
indirect solicitation by the Director, (ii) responds to any general advertisement appearing in a newspaper, magazine or trade publication, or (iii) is a referral made by a placement agency or service so long as such placement agency or
service has not been instructed by Director to solicit from Independent Bank such employee.
D-2
4.
Maintenance of Banking Relationship
. During the Support Period, Director shall
(i) maintain his borrowing and deposit relationships currently existing (in amounts consistent with amounts currently existing) with HCB at the date of this Support Agreement with Independent Bank as the successor to HCB, and (ii) refrain
from establishing any new borrowing or deposit relationship with any other person or entity.
5.
Termination
. This
Support Agreement shall terminate after the end of the period set forth in Section 2 above.
6.
Effective Time
.
This Support Agreement shall become effective on the Closing Date (as defined in the Reorganization Agreement). If the Reorganization Agreement is terminated in accordance with its terms, this Support Agreement shall not become effective and shall
be of no further force and effect.
7.
Injunctive Relief
. If that IBG and/or the Director violate any of the provisions
set forth in this Support Agreement, IBG and the Director acknowledge that IBG and Independent Bank would suffer immediate and irreparable harm and would not have an adequate remedy at law for money damages if that any of the covenants contained
herein were not performed in accordance with their terms or otherwise were materially breached. Accordingly, IBG and the Director agree that, without the necessity of proving actual damages or posting bond or other security, IBG and Independent Bank
shall be entitled to temporary or permanent injunction or injunctions to prevent breaches of such performance and to specific enforcement of such covenants in addition to any other remedy to which IBG and Independent Bank may be entitled, at law or
in equity. In such a situation, the parties agree that IBG and Independent Bank may pursue any remedy available, including declaratory relief, concurrently or consecutively in any order as to any breach, violation, or threatened breach or violation
of this Support Agreement, and the pursuit of any particular remedy or remedies shall not be deemed an election of remedies or waiver of the right to pursue any other remedy.
8.
Assignability
. Neither this Support Agreement nor any of the rights, interests or obligations under this Support Agreement may be assigned, in whole or in part, by operation of law or otherwise
by any of the parties hereto without the prior written consent of the other party. Any assignment in violation of the preceding sentence shall be void. Subject to the preceding two sentences, this Support Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors and assigns.
9.
GOVERNING LAW
. THIS
SUPPORT AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS SUPPORT AGREEMENT SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF TEXAS, WITHOUT
GIVING EFFECT TO PROVISION THEREOF REGARDING CONFLICT OF LAWS. THE PARTIES IRREVOCABLY AGREE THAT VENUE FOR SUCH DISPUTE SHALL LIE EXCLUSIVELY IN ANY COURT OF COMPETENT JURISDICTION IN COLLIN COUNTY, TEXAS.
D-3
10.
Severability
. If any term or other provision of this Support Agreement is held to
be illegal, invalid or unenforceable by any rule of law or public policy, (a) such term or provision shall be fully severable and this Support Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision were
not a part hereof; (b) the remaining provisions of this Support Agreement shall remain in full force and effect and shall not be affected by such illegal, invalid or unenforceable provision or by its severance from this Support Agreement; and
(c) there shall be added automatically as a part of this Support Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and still be legal, valid and enforceable. If any provision of
this Support Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is enforceable.
11.
Notice
. All notices, requests, consents and other communications to be given or delivered hereunder shall be given in accordance with, and the effectiveness of such communications shall be
determined under, the provisions of Section 11.07 of the Reorganization Agreement and shall be delivered at the respective addresses of the parties set forth on the signature page hereto.
12.
No Delay, Waiver, Etc
. No delay on the part of the parties hereto in exercising any power or right hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any power or right hereunder preclude other or further exercise thereof or the exercise of any other power or right.
13.
Modification
. No amendment hereof shall be effective unless contained in a written instrument signed by the parties hereto.
14.
Headings
. The descriptive headings of the several sections of this Support Agreement are inserted for convenience
of reference only and do not constitute a part of this Support Agreement.
[Signature Page to Follow]
D-4
IN WITNESS WHEREOF, the undersigned have executed this Support Agreement as of the date
first above written.
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INDEPENDENT BANK GROUP, INC.
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By:
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David R. Brooks
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Chairman of the Board and CEO
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Address:
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Independent Bank Group, Inc.
1600 Redbud Blvd., Suite 400
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McKinney, Texas 75069
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Attn: Mr. David Brooks
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D-5
Exhibit 10.14
DEFINITIVE AGREEMENT
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into and effective as of June 4, 2014, by and between INDEPENDENT BANK GROUP, INC., a Texas
corporation and a registered bank holding company (the “
Borrower
”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association (the “
Lender
”).
RECITALS
The Borrower has requested that the Lender extend to it a credit in the aggregate principal amount not to exceed $35,000,000 in the form of Revolving Loans. The Lender is willing to extend such credit to
the Borrower upon all of the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing
premises and the mutual agreements contained herein, the receipt and sufficiency of all such consideration being hereby acknowledged, the parties agree as follows:
AGREEMENT
SECTION 1
DEFINITIONS AND TERMS
1.1
Definitions
. As used in this Agreement, the following terms have the following meanings:
“
Affiliate
” shall mean, as to any Person, any (a) director, officer or employee of such Person, or (b) Person
directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if the controlling Person directly or indirectly, either individually or together
with (in the case of an individual) his spouse, lineal descendants and ascendants and brothers or sisters by blood or adoption or spouses of such descendants, ascendants, brothers and sisters, owns five percent (5%) or more of any class of
voting securities of the controlled Person or possesses, directly or indirectly, the power to direct, or cause the direction of, the management or policies of the controlled Person, whether through the ownership of voting securities, through common
directors, trustees or officers, by contract or otherwise. “
Agreement
” shall mean this Credit Agreement, as amended, supplemented, modified or extended from time to time.
“
Average Daily Principal Balance
” shall mean, for any Fiscal Quarter (or portion thereof), the average daily principal
balance of the Revolving Loans outstanding during such Fiscal Quarter (or portion thereof).
“
Bank
Subsidiary
” shall mean Independent Bank, and any Person which is now or hereafter an “insured depository institution” within the meaning of 12 U.S.C. Section 1831(c), as amended, and which is now or hereafter
“controlled” by the Borrower within the meaning of 12 U.S.C. Section 1841(a), as amended.
“
Borrower
” has the meaning set forth in the preamble to this Agreement.
“
Borrowing Date
” shall mean a date on which Borrower has requested the funding of Loans under this
Agreement, which date must be a Business Day and may not be later than one Business Day prior to the Termination Date.
“
Business Day
” shall mean a New York Banking Day.
“
Change of Control
” shall mean (a) the acquisition by any Person, or two (2) or more Persons acting in
concert, of the beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 10% or more of the outstanding shares of voting ownership interests of the Borrower, or
(b) the lease, sale or transfer or other disposition of all or substantially all of the assets of the Borrower or any Bank Subsidiary in one or a series of transactions to any Person, or two (2) or more Persons acting in concert.
“Change of Control” shall not include, however, any of the foregoing transactions among Subsidiaries of the Borrower.
“
Code
” shall mean the Internal Revenue Code of 1986, as amended, and any successor statute, together with the
regulations and published interpretations thereunder, in each case as in effect from time to time.
“
Collateral
” shall mean all of the Property granted to the Lender as collateral under the Related Documents, if any.
“
Commitment Fee Percentage
” shall mean 0.30%.
“
Consolidated Bank Subsidiaries
” shall mean the Bank Subsidiaries on a consolidated basis.
“
Default
” shall mean an event which with the giving of notice or the passage of time or both would constitute an Event
of Default.
“
Dollars
” and the sign “
$
” mean the lawful money of the United States of
America.
“
EDGAR
” shall mean the Electronic Data Gathering, Analysis and Retrieval system of the United
States Securities and Exchange Commission.
“
Employee Plan
” shall mean any savings, profit sharing, or
retirement plan or any deferred compensation contract or other plan maintained for employees of the Borrower or its Subsidiaries and covered by Title IV of ERISA, including any “multiemployer plan” as defined in ERISA.
“
Environmental Law
” shall mean any local, state or federal law or other statute, law, ordinance, rule, code, regulation,
decree or order, presently in effect or hereafter enacted, promulgated or implemented governing, regulating or imposing liability or standards of conduct concerning the use, treatment, generation, storage, disposal, discharge or other handling or
release of any Hazardous Substance.
-2-
“
Environmental Liability
” shall mean all liability arising under, resulting
from or imposed by any Environmental Law and all liability imposed under common law with respect to the use, treatment, generation, storage, disposal, discharge or other handling or release of any Hazardous Substance.
“
ERISA
” shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor statute, together
with the regulations and published interpretations thereunder, in each case as in effect from time to time.
“
Event of
Default
” shall have the meaning assigned in Section 7.1.
“
FDIC
” shall mean the Federal Deposit
Insurance Corporation and any successor thereof.
“
Fiscal Quarter
” shall mean any of the quarterly accounting
periods of the Borrower, ending on the last day of March, June, September and December of each calendar year.
“
Fiscal
Year
” shall mean any of the annual accounting periods of the Borrower ending on December 31 of each calendar year.
“
GAAP
” shall mean those generally accepted accounting principles and practices which are recognized as such by the Financial Accounting Standards Board and the Securities and Exchange
Commission acting through appropriate boards or committees thereof for all periods so as to properly reflect the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries.
“
Governmental Authority
” shall mean the government of the United States of America or any other nation, or of any
political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank and including each Regulatory Authority).
“
Guaranteed Loan Amount
” shall mean, as of any date and with respect to each Bank Subsidiary, 100% of the aggregate principal amount set forth in (a) Columns B and C of
item 11.f. on Schedule RC-N of the quarterly Consolidated Reports of Condition and Income for A Bank with Domestic Offices Only – Federal Financial Institution Examination Counsel Form 041 most recently filed by such Bank Subsidiary with
the appropriate Regulatory Authorities or (b) items PD940 and PD1040 on Schedule PD of the quarterly Thrift Financial Report most recently filed by such Bank Subsidiary with the appropriate Regulatory Authorities, as applicable.
“
Guaranteed OREO Amount
” shall mean, as of any date and with respect to each Bank Subsidiary, 100% of the aggregate
principal amount set forth in (a) item 13.b.7 on Schedule RC-M of the quarterly Consolidated Reports of Condition and Income for A Bank with Domestic Offices Only – Federal Financial Institution Examination Counsel Form 041 most recently
filed by such Bank Subsidiary with the appropriate Regulatory Authorities or (b) item SI795 on Schedule SI of the quarterly Thrift Financial Report most recently filed by such Bank Subsidiary with the appropriate Regulatory Authorities, as
applicable.
-3-
“
Hazardous Substance
” shall mean any pollutant, contaminant, waste, or
toxic or hazardous chemicals, wastes or substances, including asbestos, urea formaldehyde insulation, petroleum, PCB’s, air pollutants, water pollutants, and other substances defined as hazardous or toxic in, or subject to regulation under, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9061 et seq., Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. § 6901 et seq., the Toxic Substance Control Act of 1976, as amended, 15 U.S.C. § 2601 et seq., the Solid Waste Disposal Act, 42 U.S.C. § 3251 et seq., the Clean Air Act, 42 U.S.C.
§ 1857 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq., Emergency Planning and Community Right to Know Act, 42 U.S.C. § 11001, et seq., or any other statute, rule, regulation or order of any Governmental
Authority having jurisdiction over the control of such wastes or substances, including without limitation the United States Environmental Protection Agency, the United States Nuclear Regulatory Agency, and any applicable state department or county
department of health or similar entity.
“
Holding Company Indebtedness
” shall mean all (a) indebtedness
of the Borrower for borrowed money; (b) indebtedness for the deferred purchase price of property or services for which the Borrower is liable, contingently or otherwise, as obligor, guarantor or otherwise; (c) commitments by which the
Borrower assures a creditor against loss, including contingent reimbursement obligations of the Borrower with respect to letters of credit; (d) obligations of the Borrower which are evidenced by notes, acceptances or other instruments;
(e) indebtedness guaranteed in any manner by the Borrower, including guaranties in the form of an agreement to repurchase or reimburse; (f) obligations of the Borrower under leases which are or should be, in accordance with GAAP, recorded
as capital leases for which obligations the Borrower is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations the Borrower assures a creditor against loss; (g) unfunded obligations of the
Borrower to any Employee Plan; (h) liabilities secured by any Lien on any Property owned by the Borrower even though it has not assumed or otherwise become liable for the payment thereof; and (i) other liabilities or obligations of the
Borrower which would, in accordance with GAAP, be included on the liability portion of a balance sheet;
provided
that Holding Company Indebtedness shall not include any liabilities incurred by the Borrower in the ordinary course of business
(including any such liabilities arising under interest rate management transactions or other financial contracts that are entered into in the ordinary course of business that are non-speculative in nature) and other liabilities which do not exceed
$1,000,000.
“
Indebtedness
” shall mean all (a) indebtedness of the Borrower or a Subsidiary for borrowed
money; (b) indebtedness for the deferred purchase price of property or services for which the Borrower or a Subsidiary is liable, contingently or otherwise, as obligor, guarantor or otherwise; (c) commitments by which the Borrower or a
Subsidiary assures a creditor against loss, including contingent reimbursement obligations with respect to letters of credit; (d) obligations of the Borrower or a Subsidiary which are evidenced by notes, acceptances or other instruments;
(e) indebtedness guaranteed in any manner by the Borrower or a Subsidiary, including guaranties in the form of an agreement to repurchase or reimburse; (f) obligations under leases which are or
-4-
should be, in accordance with GAAP, recorded as capital leases for which obligations the Borrower or a Subsidiary is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations the Borrower assures a creditor against loss; (g) unfunded obligations of the Borrower or a Subsidiary to any Employee Plan; (h) liabilities secured by any Lien on any Property owned by the Borrower or any
Subsidiary even though it has not assumed or otherwise become liable for the payment thereof; and (i) other liabilities or obligations of the Borrower and its Subsidiaries which would, in accordance with GAAP, be included on the liability
portion of a balance sheet;
provided
that Indebtedness shall not include any liabilities incurred by the Borrower in the ordinary course of business (including any such liabilities arising under interest rate management transactions or other
financial contracts that are entered into in the ordinary course of business that are non-speculative in nature) and other liabilities which do not exceed) which do not exceed $1,000,000.
“
Indemnitee
” has the meaning set forth in Section 5.9 hereof.
“
Independent Bank
” shall mean Independent Bank, a Texas state chartered bank.
“
Interest Differential
” shall mean that sum equal to the greater of zero or the financial loss incurred by the Lender
resulting from prepayment, calculated as the difference between the amount of interest the Lender would have earned (from like investments in the Money Markets as of the first day of the LIBOR Loan) had prepayment not occurred and the interest the
Lender will actually earn (from like investments in the Money Markets as of the date of prepayment) as a result of the redeployment of funds from the prepayment. Because of the short-term nature of this facility, the Borrower agrees that the
Interest Differential shall not be discounted to its present value.
“
Lender
” has the meaning set forth in
the preamble to this Agreement.
“
LIBOR Loans
” shall mean Loans to the extent LIBOR Rate is the base rate of
interest for such Loans under this Agreement.
“
LIBOR Rate
” shall mean an annual rate equal to 2.50% plus the
one-month LIBOR rate quoted by the Lender from Reuters Screen LIBOR01 Page or any successor thereto, which shall be that one-month LIBOR rate in effect two New York Banking Days prior to the Reprice Date, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation, such rate to be reset monthly on each Reprice Date. If the initial advance under any Note occurs other than on the Reprice Date, the initial one-month LIBOR rate shall be that
one-month LIBOR rate in effect two New York Banking Days prior to the date of the initial advance, which rate plus the percentage described above shall be in effect until the next Reprice Date. The Lender’s internal records of applicable
interest rates shall be determinative in the absence of manifest error.
“
Lien
” shall mean any mortgage,
pledge, hypothecation, assignment, collateral deposit arrangement, encumbrance, lien (statutory or other), deed of trust, charge, preference, priority, security interest or other security agreement or preferential arrangement of any kind or nature
whatsoever including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the UCC or comparable law of any
jurisdiction.
-5-
“
Liquid Assets
” shall mean, with respect to the Borrower (on a
non-consolidated basis), cash, reserves, and U.S. treasury securities or agency securities having a maturity no longer than one year after the date of issuance and rated at least AA+ by S&P and Fitch and Aa1 by Moody’s, in each case held by
the Borrower or maintained for the account of the Borrower at any member bank of the U.S. Federal Reserve System.
“
Loan Account
” shall mean an account on the books of the Lender in which the Lender will record, pursuant to
Section 2.3, the Obligations, payments made upon the Obligations, and other advances, debits and credits pertaining to the Obligations or the Collateral, if any.
“
Loan Loss Reserves
” shall mean, with respect to any Bank Subsidiary as at any date of determination, the loan loss reserves of such Bank Subsidiary and its consolidated Subsidiaries on a
consolidated basis as of such date.
“
Loan Request
” shall mean a loan request completed by the Borrower
substantially in the form of
Exhibit A
hereto.
“
Loans
” shall mean the Revolving Loans.
“
Material
” shall mean having or relating to meaningful consequences, and for purposes of this Agreement shall be
determined reasonably in light of the facts and circumstances of the matter in question. The term “
Materially
” shall have a correlative meaning.
“
Material Adverse Effect
” shall mean (a) a Default, (b) a Materially adverse change in the business, Property, operations, prospects or condition (financial or otherwise) of the
Borrower or any Bank Subsidiary, (c) the termination of any Material agreement to which the Borrower or any Subsidiary is a party which would have a Material adverse effect on the Borrower or any Bank Subsidiary, (d) any Material
impairment of the right to carry on the business as now or proposed to be conducted by the Borrower or any Subsidiary, which would have a Material effect on the Borrower or any Bank Subsidiary, or (e) any Material impairment of the ability of
the Borrower to perform the Obligations under this Agreement or the Borrower or any Subsidiary under any Related Document to which it is a party. A Material Adverse Effect shall be deemed to have occurred if the cumulative effect of an individual
event and all other then existing events would result in a Material Adverse Effect.
“
Maximum Available
Commitment
” shall mean an amount, if any, equal to the excess of the Revolving Loan Commitment
minus
the outstanding principal amount of all Revolving Loans.
“
Money Markets
” shall mean one or more wholesale funding markets available to and selected by the Lender, including negotiable certificates of deposit, commercial paper, Eurodollar
deposits, bank notes, federal funds, interest rate swaps or others.
“
Negative Pledge Agreement
” shall mean
the Negative Pledge Agreement, in the form of
Exhibit D
hereto, by and between the Borrower and the Lender, as amended, supplemented, modified, extended or restated from time to time, pursuant to which the Borrower shall agree not to
pledge or grant a lien on the stock of any Bank Subsidiary to any Person.
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“
New York Banking Day
” shall mean any day (other than a Saturday or Sunday)
on which commercial banks are open for business in New York, New York.
“
Non-Performing Asset Amount
” shall
mean, with respect to any Bank Subsidiary at any time, the sum of all Non-Performing Loans
plus
OREO
minus
Guaranteed OREO Amount of such Bank Subsidiary at such time.
“
Non-Performing Loans
” shall mean, with respect to any Bank Subsidiary at any time, the aggregate principal amount
(including any capitalized interest) of all nonaccruing loans of such Bank Subsidiary
plus
the aggregate principal amount of all loans of such Bank Subsidiary that are ninety (90) days or more past due and still accruing
minus
the
Guaranteed Loan Amount of such Bank Subsidiary, in each case at such time.
“
Notes
” shall mean the Revolving
Credit Note, and any note(s) or obligation(s) issued in substitution, replacement, renewal, amendment or restatement thereof.
“
Obligations
” shall mean the Revolving Loans, all mandatory prepayments, all costs and expenses owing to the Lender
hereunder or under the Related Documents, all liabilities of the Borrower to the Lender under this Agreement and of the Borrower or any Subsidiary under the Related Documents two which the Borrower or such Subsidiary is a party, and all other
Holding Company Indebtedness of the Borrower owing to the Lender and its Affiliates, whether or not evidenced by this Agreement or the Related Documents, including all liabilities under Rate Management Transactions.
“
OCC
” shall mean the Office of the Comptroller of the Currency and any successor thereof.
“
OREO
” shall mean, of any Bank Subsidiary, all real estate other than premises owned or controlled by such Bank
Subsidiary and its consolidated Subsidiaries and direct and indirect investments of such Bank Subsidiary and Subsidiaries in real estate ventures, in each case to the extent included in OREO Amount.
“
OREO Amount
” shall mean, of each Bank Subsidiary as of any date of determination, 100% of the aggregate principal
amount set forth in item 3.f. on Schedule RC-M of the quarterly Consolidated Reports of Condition and Income for A Bank with Domestic Offices Only – Federal Financial Institution Examination Counsel Form 041 most recently filed by such Bank
Subsidiary with the appropriate Regulatory Authorities.
“
PBGC
” shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA, and any successor thereof.
“
Permitted
Liens
” shall mean: (a) Liens for Taxes, assessments, or governmental charges, carriers’, warehousemen’s, repairmen’s, mechanics’, materialmen’s and other like Liens, which are either not delinquent or are being
contested in good faith by appropriate proceedings which will prevent foreclosure of such Liens, and against which adequate cash reserves have been provided; (b) easements, restrictions, minor title irregularities and similar matters which have
no Material adverse impact upon the ownership and use of the affected Property; (c) Liens or deposits
-7-
in connection with worker’s compensation, unemployment insurance, social security or other insurance or to secure customs duties, public or statutory obligations in lieu of surety, stay or
appeal bonds, or to secure performance of contracts or bids, other than contracts for the payment of money borrowed, or deposits required by law as a condition to the transaction of business or other Liens or deposits of a like nature made in the
ordinary course of business; (d) Liens in favor of the Lender pursuant to the Related Documents; (e) Liens evidenced by conditional sales, purchase money mortgages or other title retention agreements on machinery and equipment (acquired in
the ordinary course of business and otherwise permitted to be acquired hereunder) which are created at the time of the acquisition of Property solely for the purposes of securing the Indebtedness incurred to finance the cost of such Property,
provided no such Lien shall extend to any Property other than the Property so acquired and identifiable proceeds; (f) government deposit security pledges; (g) liens and pledges made in connection with repurchase agreements entered into by
any Bank Subsidiary; (h) Liens existing on any asset of any Person at the time such Person is acquired by or is combined with any of the Borrower’s Subsidiaries, provided the Lien was not created in contemplation of that event;
(i) Liens on Property required by Regulation W promulgated by the Federal Reserve System; (j) Liens in the ordinary course of business in favor of any Federal Reserve Bank or the United States Treasury; (k) Liens in the ordinary
course of business in favor of any Federal Home Loan Bank; (l) Liens not otherwise permitted by the foregoing clauses of this definition securing Indebtedness (other than indebtedness represented by the Notes) in an aggregate principal amount
at any time outstanding not to exceed $50,000,000; (m) Liens incidental to the conduct of business or ownership of Property of any of the Borrower’s Subsidiaries which do not in the aggregate Materially detract from the value of the
Property of the Borrower’s Subsidiaries or Materially impair the use thereof in business operations; and (n) Liens arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any of the foregoing Liens.
“
Person
” shall mean an individual, partnership, corporation, limited liability Borrower, partnership, firm,
enterprise, business trust, joint stock Borrower, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.
“
Prime Rate
” shall mean the interest rate publicly announced by the Lender from time to time in Minneapolis, Minnesota as its prime rate for interest rate determinations, which is solely
a reference rate and may be at, above or below the rate or rates at which the Lender lends to other Persons. Any change in the Prime Rate shall become effective as of the opening of business on the day on which such change is publicly announced by
the Lender.
“
Property
” shall mean any interest of any Person of any kind in property or assets, whether
real, personal, mixed, tangible or intangible, wherever located, and whether now owned or subsequently acquired or arising and in the products, proceeds, additions and accessions thereof or thereto.
“
Rate Management Transaction
” shall mean any transaction (including an agreement with respect thereto) now existing or
hereafter entered into between the Borrower and the Lender or any of its Affiliates which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency
-8-
option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.
“
Regulation
” shall mean any
federal, state or international law, governmental or quasi-governmental rule, regulation, policy, guideline or directive (including but not limited to the Dodd-Frank Wall Street Reform and Consumer Protection Act and enactments, issuances or similar
pronouncements by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices or any similar authority and any successor thereto) that applies to the Lender.
“
Regulatory Authority
” shall mean any state, federal or other Governmental Authority, agency or instrumentality,
including the FDIC, the Federal Reserve Board, the OCC, Texas Department of Banking, and the Securities and Exchange Commission, responsible for the examination and oversight of the Borrower and each Bank Subsidiary.
“
Related Documents
” shall mean the Revolving Credit Note, the Negative Pledge Agreement, and all other instruments,
agreements, certificates, and other documents executed by or on behalf of the Borrower, any Subsidiary or any guarantor in connection with any of the Obligations or the transactions contemplated under this Agreement, all as amended, supplemented,
modified or extended from time to time.
“
Reprice Date
” shall mean the first day of each month.
“
Requirements of Law
” shall mean as to any matter or Person, the Certificate or Articles of Incorporation and Bylaws or
other organizational or governing documents of such Person, and any law (including any Environmental Law), ordinance, treaty, rule, regulation, order, decree, determination or other requirement having the force of law relating to such matter or
Person and, where applicable, any interpretation thereof by any Governmental Authority.
“
Restricted
Payments
” shall mean (a) dividends or other distributions by the Borrower or any Subsidiary based upon the equity interests of the Borrower or any Subsidiary (except (i) dividends payable to the Borrower or any Subsidiary by any
Subsidiary and (ii) dividends payable solely in equity interests of the Borrower), (b) any other distribution by the Borrower in respect of the equity interests of the Borrower, whether now or hereafter outstanding, either directly or
indirectly, whether in cash or property or otherwise, and (c) payment of management fees by the Borrower or any Subsidiary to any Affiliate, either directly or indirectly, whether in cash or property or otherwise (but excluding
(i) management fees paid among the Borrower and its Subsidiaries in the ordinary course of business, (ii) fees paid by and among the Borrower and its Subsidiaries consistent with past practices, and (iii) payments by the Borrower and
its Subsidiaries pursuant to the Borrower’s or such Subsidiaries’ Supplemental Executive Retirement Plans, provided such payments are consistent with past practices).
“
Return on Average Assets
” shall mean, for the Consolidated Bank Subsidiaries as at the end Fiscal Quarter (or portion
thereof), the quotient, expressed as a percentage, obtained by dividing the net income of the Consolidated Bank Subsidiaries for such Fiscal Quarter by the average total daily assets of the Consolidated Bank Subsidiaries during such Fiscal Quarter
(or portion thereof).
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“
Revolving Credit Note
” shall mean the promissory note from the Borrower to
the Lender in the form of
Exhibit B
evidencing the Revolving Loans, as amended, supplemented, modified, extended or restated from time to time.
“
Revolving Loan Commitment
” shall mean an aggregate principal amount not to exceed $35,000,000.
“
Revolving Loans
” shall mean the loans to the Borrower pursuant to Section 2.1 of this Agreement and evidenced by the Revolving Credit Note.
“
SBLF Preferred Stock
” means senior perpetual noncumulative preferred stock (or equivalent securities) of the Borrower
that is funded by the U.S. Treasury Department out of the Small Business Lending Fund established under the Small Business Jobs Act of 2010.
“
Subordinated Indebtedness
” means Indebtedness of the Borrower that (a) is evidenced by bonds or notes, (b) at or before the time of issuance or distribution, is fully
subordinated in right of payment to the Obligations and any instruments or securities issued in substitution of, or exchange for, all or any portion of the Obligations, (c) does not have the benefit of any obligation of any Person (whether as
issuer, guarantor or otherwise), (d) is unsecured, (e) does not contain any financial covenants and does not contain any other terms which are more burdensome to the Borrower this Agreement or the Related Documents, and (f) is not
subject to optional or mandatory prepayment and does not mature prior to the date that is five (5) years after the date of its issuance.
“
Subsidiary
” shall mean as to any Person, a Bank Subsidiary, a corporation, limited liability Borrower, partnership, association, joint venture or other entity of which shares of stock,
membership interests or other voting interests having voting power (other than stock having such power only by reason of the happening of a contingency that has not occurred) sufficient to elect a majority of the board of directors or other managers
of such entity are at the time owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, the term “Subsidiary” shall mean a
Subsidiary of the Borrower and shall include all Bank Subsidiaries.
“
Tax
” shall mean any Federal, State or
foreign tax, assessment or other governmental charge or levy (including any withholding tax) upon a Person or upon its assets, revenues, income or profits.
“
Termination Date
” shall mean May 3, 2015, or, in any case, such earlier date on which the Obligations shall terminate as provided in this Agreement.
“
Texas Ratio
” shall mean, of the Consolidated Bank Subsidiaries as at any date of determination, the ratio (expressed as
a percentage rounded to two decimal places) of (a) the Non-Performing Asset Amount of the Consolidated Bank Subsidiaries to (b) (i) the aggregate amount of total equity capital of Borrower and its Subsidiaries as at such date of
determination, plus (ii) the
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amount of Loan Loss Reserves as at such date of determination, minus (iii) the aggregate amount of all disallowed goodwill and other intangible assets of the Borrower and its Subsidiaries as
at the date of determination.
“
Total Risk-Based Capital Ratio
” shall mean the Total Risk-Based Capital Ratio
determined in accordance with the rules and regulations of the appropriate Regulatory Authority as from time to time in effect, and any successor or other regulation or official interpretation of said Regulatory Authority relating thereto.
“
UCC
” shall mean the Uniform Commercial Code as the same may, from time to time, be in effect and codified
in the State of New York;
provided, however,
in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of Lender’s security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction solely for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to such provisions.
1.2
Accounting and
Financial Determinations
.
(a) To the extent applicable and except as otherwise specified in this Agreement, where the
character or amount of any asset or liability or item of income or expense is required to be determined, or any accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall be made on a
consolidated basis so as to include Borrower and each Subsidiary of the Borrower in each such calculation and shall be made in accordance with GAAP;
provided, however,
that if any change in GAAP from those applied in the preparation of the
financial statements referred to in Section 5.3 is occasioned by the promulgation of rules, regulations, pronouncements and opinions by or required by the Financial Accounting Standards Board or the Securities and Exchange Commission (or its
boards or committees or successors thereto or agencies with similar functions), the initial announcement of which change is made after the date hereof, results in a change in the method of calculation of financial covenants, standards or terms found
in Section 6, the parties hereto agree to enter into good faith negotiations in order to amend such provisions so as to reflect such changes with the desired result that the criteria for evaluating the Borrower’s financial condition shall
be the same after such changes as if such changes had not been made; and
provided
,
further
, that until such time as the parties hereto agree upon such amendments, such financial covenants, standards and terms shall be construed and
calculated as though no change had taken place.
(b) All regulatory determinations and calculations made in connection with
the determination of the status of the Borrower and any Bank Subsidiary as well-capitalized under Section 5.11 hereof, shall be made in accordance with the laws, rules, regulations and interpretations thereof by the Governmental Authority
charged with interpretations thereof, as in effect on the date of such determination or calculation, as the case may be.
(c)
When used herein, the term “financial statement” shall include balance sheets, statements of earnings, statements of stockholders’ equity, statements of cash flows and the notes and schedules thereto, and each reference herein to a
balance sheet or other financial statement of the Borrower shall be to a statement prepared on a consolidated basis, unless otherwise specified.
-11-
1.3
Interpretation
. The words “hereof,” “herein” and
“hereunder” and words of a similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Section, Schedule and Exhibit references contained in this Agreement are
references to sections, schedules and exhibits in or to this Agreement unless otherwise specified. Any reference in any Section or definition to any clause is, unless otherwise specified, to such clause of such Section or definition. The term
“including” shall mean “including, without limitation,”.
1.4
Other Terms
. Except as otherwise
specifically provided, each accounting term used herein shall have the meaning given to it under GAAP, and all other terms contained in this Agreement (and which are not otherwise specifically defined herein) shall have the meanings provided in the
UCC to the extent the same are used or defined therein unless the context otherwise requires. Terms defined in other Sections of this Agreement shall have the meanings set forth therein.
SECTION 2
AMOUNTS AND TERMS OF OBLIGATIONS
2.1
Revolving Loans
.
(a) Prior to the Termination Date, on the terms and
conditions set forth in this Agreement to make to the Borrower Revolving Loans from time to time in amounts not to exceed in the aggregate at any one time outstanding the Revolving Loan Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, prepay (in whole or in part) and reborrow the Revolving Loans prior to (but not on) the Termination Date. The Revolving Loans made by the Lender shall be evidenced by the Revolving Credit Note.
(b) Prior to an Event of Default, and except as otherwise provided herein, each Revolving Loan shall bear interest on the unpaid
principal balance before maturity (whether upon demand, acceleration, default or otherwise) at the rate
per annum
equal to the LIBOR Rate. Interest shall be computed daily based on the actual number of days elapsed and a year of 360 days.
(c) From the date of the first Revolving Loan and until all Revolving Loans are paid in full, the Borrower shall pay to the
Lender all accrued and unpaid interest on each Revolving Loan on the first day of each month;
provided
that accrued and unpaid interest during the occurrence and continuation of an Event of Default shall be payable upon demand. The Lender may
debit to the Borrower’s Loan Account all unpaid and accrued interest on the Revolving Loans when due without prior notice to or consent of the Borrower.
(d) Notwithstanding anything to the contrary herein, all outstanding unpaid principal and accrued interest on the Revolving Loans shall be due and payable to the Lender on the Termination Date.
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(e) The Borrower may obtain Revolving Loans by submitting a Loan Request in writing,
including but not limited to submissions via facsimile, emails and/or documents in electronic format. Such request shall be received by the Lender by 2:00 p.m. (New York time) two (2) New York Banking Days before the Borrowing Date set forth in
the Loan Request and shall specify (i) such Borrowing Date, and (ii) the amount of the Revolving Loan requested. Once submitted, each Loan Request shall be irrevocable and no Loan Request may be modified, altered or amended without the
prior written consent of the Lender. Each Revolving Loan shall be in the principal amount of the lesser of (i) $100,000 or a multiple thereof, and (ii) the Maximum Available Commitment. Upon fulfillment of the conditions specified in
Section 4 hereof, the Lender shall promptly deposit the amount of such Revolving Loan in the operating account of the Borrower maintained with the Lender.
2.2
Interest After Default
. After and during the continuation of an Event of Default, each of the Obligations shall bear interest at the rate of three percent (3%)
per annum
in excess
of the applicable rates set forth in this Agreement. In no event shall the interest rate under the Notes exceed the highest rate permitted by law.
2.3
Loan Account
. The Lender will enter as a debit to the Loan Account the aggregate principal amount of each Obligation as disbursed or issued from time to time. The Lender shall also record in
the Loan Account, in accordance with the Lender’s customary accounting practices, all accrued interest and all other charges, expenses and other items properly chargeable to the Borrower hereunder or under the Related Documents, all payments
made by the Borrower with respect to the Obligations, and all other debits and credits. Once each month, the Lender shall render a statement of account of the Loan Account (including a statement of the outstanding principal balance of the Loans,
accrued and unpaid interest on the Loans, accrued fees and expenses and the applicable interest rate for each Loan) which statement shall be considered correct and conclusively binding upon the Borrower absent manifest error. Notwithstanding the
foregoing, neither the failure to make any such debit or recordation nor any error in any such entry shall affect the Revolving Credit Commitment or the Obligations in respect of any applicable Loans.
2.4
Payments
. All payments by the Borrower of principal, interest, fees and other Obligations shall be made in Dollars in same day
funds, without defense, setoff, counterclaim, reduction or deduction, and free of any restriction or condition, and delivered to the Lender not later than 12:00 noon (New York time) on the date due at U.S. Bank National Association, 425 Walnut,
Cincinnati, OH 45202, ABA #042000013, GL #03000001584, Account #152310887715, it being understood and agreed that funds received by the Lender after such time on any date shall be deemed to have been paid by the Borrower on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, such payment may be made on the next succeeding Business Day in Dollars in same day funds, and such extension of time shall in
such case be included in the computation of payment of interest on the Notes. The Lender may debit to the depository accounts maintained by the Borrower with the Lender all payments on the Obligations when due without prior notice to or consent of
the Borrower.
2.5
Prepayments
.
(a)
Optional Prepayments
. Subject only to the payment of any amounts required by Section 2.6 hereof, the Borrower may, at its option and at any time, prepay the Obligations in
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whole or in part;
provided, however,
that (i) the Bank shall have received from the Borrower notice of such prepayment (which shall be irrevocable and shall specify the Loan and the
amount to be prepaid and the date of such prepayment) not later than 3:00 p.m. on a Business Day that is at least three (3) Business Day’s prior to the date specified in such notice for prepayment, and (ii) any prepayment of a Loan
shall be in a principal amount of $100,000 or a whole multiple of $100,000 in excess thereof, or, if less, the entire principal amount thereof then outstanding.
(b)
Mandatory Prepayment
. At any time that the aggregate principal amount of Revolving Loans outstanding hereunder exceeds the Revolving Loan Commitment, the Borrower shall immediately pay the
amount of such excess in immediately available funds, together with interest accrued on the amount of such payment.
2.6
General Provisions Applicable to LIBOR Rate Loans
.
(a) In the event the Lender shall incur any loss, cost, expense or
premium (including any loss of profit or loss, cost, expense or premium incurred by reason of the liquidation or reemployment of deposits or other funds acquired or contracted to be acquired by the Lender to fund or maintain LIBOR Loans or the
relending or reinvesting of such deposits or other funds or amounts paid or prepaid to the Lender), as a result of any failure by the Borrower to borrow any LIBOR Loan on the date specified in the applicable Loan Request given pursuant to this
Agreement; then upon the demand of the Lender, the Borrower shall pay to the Lender such amount as will reimburse the Lender for such loss, cost, expense or premium. If the Lender requests such a reimbursement it shall provide the Borrower with a
certificate setting forth the computation of the loss, cost, expense or premium giving rise to the request for reimbursement in reasonable detail and such certificate shall be deemed prima facie correct.
(b) If the Lender reasonably determines that (i) by reason of circumstances affecting the London Interbank Eurodollar Market
adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate; or (ii) the LIBOR Rate will not adequately and fairly reflect the cost to the Lender of maintaining or funding Loans based on the LIBOR Rate, or that the
maintenance or funding of such Loans based on the LIBOR Rate has become impracticable as a result of an event occurring after the date of this Agreement which in the opinion of the Lender Materially affects such Loans; then so long as such
circumstances shall continue, the Lender shall not be under any obligation to make or continue Loans based on the LIBOR Rate, and during such time the Loans may bear interest at the Prime Rate.
2.7
Effect of Regulatory Change
. If there shall occur any adoption or implementation of, or change to, any Regulation, or
interpretation or administration thereof, which shall have the effect of imposing on the Lender (or the Lender’s holding company) any increase or expansion of or any new: Tax (excluding taxes on its overall income and franchise taxes), charge,
fee, assessment or deduction of any kind whatsoever, or reserve, capital adequacy, special deposits or similar requirements against credit extended by, assets of, or deposits with or for the account of the Lender or other conditions affecting the
extensions of credit under this Agreement; then the Borrower shall pay to the Lender such additional amount as the Lender deems necessary to compensate the Lender for any increased cost to the Lender attributable to the extension(s) of credit under
this Agreement and/or for any reduction in the rate of return on the Lender’s capital and/or the Lender’s revenue attributable to such extension(s) of credit. If the Lender requests such a reimbursement it shall
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provide the Borrower with a certificate setting forth the computation of the increased costs or reduction in rate of return giving rise to the request for reimbursement in reasonable detail and
such certificate shall be deemed prima facie correct. Such amount(s) shall be payable within 15 days of demand and, if recurring, as otherwise billed by the Lender.
2.8
Taxes; Withholding,
Etc
. If any Tax is required to be withheld or deducted from, or is otherwise payable by the Borrower in connection with, any payment due to the Lender under this
Agreement or the Related Documents, the Borrower (a) shall, if required, withhold or deduct the amount of such Tax from such payment and, in any case, pay such Tax to the appropriate taxing authority in accordance with applicable law and
(b) shall pay to the Lender (i) such additional amounts as may be necessary so that the net amount received by the Lender with respect to such payment, after withholding or deducting all Taxes required to be withheld or deducted, is equal
to the full amount payable under this Agreement or the Related Documents and (ii) an amount equal to all Taxes payable by the Lender as a result of payments made by the Borrower (whether to a taxing authority or to the Lender) pursuant to this
Section 2.8. If any Tax is withheld or deducted from, or is otherwise payable by the Borrower in connection with, any payment due to the Lender under this Agreement or the Related Documents, the Borrower shall, within 30 days after the date of
such payment, furnish to the Lender the original or a certified copy of a receipt for such Tax from the applicable taxing authority. If any payment due to the Lender under this Agreement or the Related Documents is or is expected to be made without
withholding or deducting therefrom, or otherwise paying in connection therewith, any Tax payable to any taxing authority, the Borrower shall, within 30 days after any request from the Lender, furnish to the Lender a certificate from such taxing
authority, or an opinion of counsel acceptable to the Lender, in either case stating that no Tax payable to such taxing authority was or is, as the case may be, required to be withheld or deducted from, or otherwise paid by the Borrower in
connection with, such payment.
2.9
No Obligation to Extend or Forbear
. The Borrower acknowledges and agrees that the
Lender: (a) upon execution hereof, has no duty or obligation of any kind to, and has made no representations of any kind or nature that the Lender will, extend credit or any other kind of financial accommodations to the Borrower after the
Termination Date, or forbear at any time from the exercise of any of its rights or remedies under this Agreement, the Related Documents and applicable law; and (b) may at any time, in its sole and absolute discretion, exercise whatever rights
and remedies the Lender may have under this Agreement, the Related Documents and applicable law. All Obligations shall be due in full on the Termination Date without further notice or demand.
SECTION 3
REPRESENTATIONS AND WARRANTIES
In order to induce the
Lender to enter into this Agreement and make and incur the Obligations as herein provided, the Borrower hereby represents and warrants to the Lender as follows:
3.1
Organization, Qualification and Subsidiaries
. The Borrower is lawfully existing and in good standing as a Texas corporation and as a registered bank holding company. The Borrower and each
Subsidiary are lawfully existing and in good standing under the laws of their respective jurisdiction of incorporation or organization, and are duly qualified, in good standing and authorized to do business in each jurisdiction where failure to do
so might have a Material adverse impact on
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the consolidated assets, condition or prospects of such Subsidiary or the Borrower. The Borrower has the corporate power and authority and all necessary licenses, permits and franchises to borrow
hereunder, and the Borrower and each Subsidiary has the corporate power and authority and all necessary licenses, permits and franchises to own its assets and conduct its business as presently conducted. All of the issued and outstanding capital
stock of the Borrower and each of its Subsidiaries has been validly issued and is fully paid and
non-assessable.
Except as set forth on
Schedule 3.1
attached hereto, as of the date hereof, the
Borrower has no Subsidiaries and the Borrower does not own, directly or indirectly, any outstanding shares of any class of capital stock of any other Person.
3.2
Financial Statements
. The Borrower’s (a) year-end audited financial statements for December 31, 2013, audited by McGladrey LLP, and (b) quarter-end unaudited financial
statements for the three-month period ended March 31, 2014, were prepared in accordance with GAAP consistently applied throughout the applicable period, excepting any change in accounting methodology and/or business combination reporting
resulting from the adoption of new accounting guidance, and present fairly in all Material respects the financial condition of the Borrower and its consolidated Subsidiaries as of such dates and the results of its operations and cash flows for the
periods then ended. The balance sheets and footnotes thereto show all known Material liabilities, direct or contingent, of the Borrower and its consolidated Subsidiaries as of the respective dates thereof in accordance with GAAP. There has been no
Material Adverse Effect since the date of the latest of such statements. The Fiscal Year of the Borrower and each Subsidiary begins on January 1.
3.3
Authorization
. The making, execution, delivery and performance of this Agreement and the Related Documents by the Borrower have each been duly authorized by all necessary corporate action. The
valid execution, delivery and performance of this Agreement, the Related Documents and the transactions contemplated hereby and thereby, are not and will not be subject to any approval, consent or authorization of any Governmental Authority. This
Agreement and the Related Documents are the valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except to the extent enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to time in effect which affect creditors’ rights generally; (b) legal and equitable limitations on the availability of injunctive relief, specific performance,
and other equitable remedies, and (c) general principles of equity and applicable laws or court decisions limiting the enforceability of particular provisions.
3.4
Absence of Conflicting Obligations
. The making, execution, delivery and performance of this Agreement and the Related Documents, and compliance with their respective terms, do not violate or
constitute a default, breach or violation under any Requirements of Law or any covenant, indenture, deed, lease, contract, agreement, mortgage, deed of trust, note or instrument to which the Borrower or any of its Subsidiaries is a party or by which
it is bound.
3.5
Taxes
. The Borrower and each Subsidiary have filed all federal, state, foreign and local Tax returns
which were required to be filed, except those returns for which the due date has been validly extended. The Borrower and each Subsidiary have paid or made provisions for the payment of all Taxes, assessments, fees and other governmental charges
owed, and no Material Tax deficiencies have been assessed, or to the Borrower’s knowledge after due inquiry, proposed or
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threatened against the Borrower or its Subsidiaries. The federal income Tax liability of the Borrower and its Subsidiaries has been paid for all taxable years up to and including the taxable year
ended December 31, 2013, and there is no pending or, to the Borrower’s knowledge, threatened Material Tax controversy or dispute as of the date hereof.
3.6
Absence of Litigation
. There is no pending or, to the knowledge of the Borrower, threatened litigation or administrative proceeding at law or in equity which would, if adversely determined,
result in a Material Adverse Effect, and, to the best of the Borrower’s knowledge after due inquiry, there are no presently existing facts or circumstances likely to give rise to any such litigation or administrative proceeding.
3.7
Accuracy of Information
. All information, certificates or statements given or made by or on behalf of the Borrower to the
Lender in writing in connection with or pursuant to this Agreement and the Related Documents were accurate, true and complete in all Material respects when given, continue to be accurate, true and complete in all Material respects as of the date
hereof (except for information, certificates or statements which speak as of a specific date), and do not contain any untrue statement or omission of a Material fact necessary to make the statements herein or therein not misleading. There is no fact
known to the Borrower on the date of execution and delivery of this Agreement which is not set forth in this Agreement, the Related Documents or other documents, certificates or statements furnished to the Lender by or on behalf of the Borrower in
connection with the transactions contemplated hereby and which will, or which in the future may (so far as the Borrower can reasonably foresee), cause a Material Adverse Effect.
3.8
Ownership of Property
. The Borrower and each of its Subsidiaries has good and marketable title to all of its Material
Property, including the Property reflected in the Borrower’s consolidated balance sheets most recently delivered to or received by the Lender. There are no Material Liens of any nature on any of the Property of the Borrower and its Subsidiaries
except Permitted Liens. All Property useful or necessary in the Borrower’s and its Subsidiaries’ business, whether leased or owned, is in adequate condition and, to the best of the Borrower’s knowledge after due inquiry, conforms in
all Material respects to all applicable Requirements of Law. The Borrower and each Subsidiary owns (or is licensed to use) and possesses all such patents, trademarks, trade names, service marks, copyrights and rights with respect to the foregoing as
are reasonably necessary for the conduct of the businesses of the Borrower and such Subsidiaries as now conducted and proposed to be conducted without, individually or in the aggregate, any infringement upon rights of other Persons.
3.9
Federal Reserve Regulations
. The Borrower and its Subsidiaries will not, directly or indirectly use any proceeds of the
Obligations to: (a) purchase or carry any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 C.F.R. 221, as amended); (b) extend credit to other Persons for any such
purpose or refund Indebtedness originally incurred for any such purpose, except in compliance with all Requirements of Law; or (c) otherwise take or permit any action which would involve a violation of Section 7 of the Securities Exchange
Act of 1934, as amended, or any regulation of the Board of Governors of the Federal Reserve System.
3.10
ERISA
. The
Borrower and each of its Subsidiaries and anyone under common control with the Borrower under Section 4001(b) of ERISA is in compliance in all Material respects
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with the applicable provisions of ERISA and, except where any such occurrence would not cause a Material Adverse Effect: (a) no “prohibited transaction” as defined in
Section 406 of ERISA or Section 4975 of the Code has occurred; (b) no “reportable event” as defined in Section 4043 of ERISA has occurred; (c) no “accumulated funding deficiency” as defined in
Section 302 of ERISA (whether or not waived) has occurred; (d) there are no unfunded vested liabilities of any Employee Plan administered by the Borrower or its Subsidiaries; and (e) the Borrower and its Subsidiaries or the plan
sponsor have timely filed all returns and reports required to be filed for each Employee Plan.
3.11
Places of
Business
. As of the date hereof, the principal place of business and chief executive office of the Borrower is located at the address specified in Section 8.7 for the Borrower, and the corporate books and records of the Borrower are located
and hereafter shall continue to be located at the Borrower’s principal place of business and chief executive office.
3.12
Other Names
. Except as provided on Schedule 3.12 hereto, the business conducted by the Borrower (and not of its Subsidiaries)
has not been conducted under any other corporate, trade or fictitious name during the last five years, and following the date hereof the Borrower will not conduct its business under any other corporate, trade or fictitious name unless the Borrower
shall have delivered at least thirty (30) days’ prior written notice to the Lender of such name change.
3.13
Not
an Investment Borrower
. The Borrower is not (a) an “investment Borrower” or a Borrower “controlled by an investment Borrower” within the meaning of the Investment Borrower Act of 1940, as amended, or (b) a
“holding Borrower” or a “subsidiary” of a “holding Borrower” or an “affiliate of a “holding Borrower” within the meaning of the Public Utility Holding Borrower Act of 2005.
3.14
No Defaults
. Neither the Borrower nor any Subsidiary is in default under or in violation of (a) any Requirements of Law,
(b) any covenant, indenture, deed, lease, agreement, mortgage, deed of trust, note or other instrument to which the Borrower or any Subsidiary is a party or by which the Borrower or any Subsidiary is bound, or to which any of its Property is
subject, or (c) any Indebtedness; or if any default or violation under Sections 3.14(a), (b) or (c) exists, the failure to cure such default or violation would not result in a Material Adverse Effect.
3.15
Environmental Laws
. The business of the Borrower and each of its Subsidiaries has been operated in all Material respects in
compliance with all Environmental Laws and neither the Borrower nor any Subsidiary is subject to any known Environmental Liability relating to the conduct of its business or the ownership of its Property and no facts or circumstances are known by
the Borrower, after due inquiry, to exist which could give rise to such Environmental Liabilities, except for such Environmental Liabilities that in the aggregate would not cause a Material Adverse Effect. No notice has been served on the Borrower
or any Subsidiary claiming any violation of Environmental Laws, asserting Environmental Liability or demanding payment or contribution for Environmental Liability or violation of Environmental Laws which would cause a Material Adverse Effect.
3.16
Labor Matters
. There are no labor disputes between the Borrower or any Subsidiary, and any of its employees which
individually or in the aggregate, if resolved in a manner adverse to the Borrower or a Subsidiary, would result in a Material Adverse Effect.
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3.17
Restricted Payments
. Other than declared dividends and distributions consistent
with the Borrower’s past practices or as otherwise permitted under this Agreement, the Borrower has not, since the date of the most recent financial statements referred to in Section 3.2 and as of the date hereof, made any Restricted
Payments.
3.18
Solvency.
The Borrower is not “insolvent,” nor will the Borrower’s incurrence of loans,
direct or contingent, to repay the Obligations render the Borrower “insolvent.” For purposes of this Section 3.18, a corporation is “insolvent” if (i) the “present fair salable value” (as defined below) of its
assets is less than the amount that will be required to pay its probable liability on its existing debts and other liabilities (including contingent liabilities) as they become absolute and matured; (ii) its property constitutes unreasonably
small capital for it to carry out its business as now conducted and as proposed to be conducted including its capital needs; (iii) it intends to, or believes that it will, incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be received by it and amounts to be payable on or in respect of debt of it), or the cash available to it after taking into account all of its other anticipated uses of the cash is anticipated to be
insufficient to pay all such amounts on or in respect of its debt when such amounts are required to be paid; or (iv) it believes that final judgments against it in actions for money damages will be rendered at a time when, or in an amount such
that, it will be unable to satisfy any such judgments promptly in accordance with their terms (taking into account the maximum reasonable amount of such judgments in any such actions and the earliest reasonable time at which such judgments might be
rendered), or the cash available to it after taking into account all other anticipated uses of its cash, is anticipated to be insufficient to pay all such judgments promptly in accordance with their terms. For purposes of this Section 3.18, the
following definitions shall apply: (x) the term “
debts
” includes any legal liability, whether matured or unmatured, liquidated, absolute, fixed or contingent, (y) the term “
present fair salable value
” of
assets means the amount which may be realized, within a reasonable time, either through collection or sale of such assets at their regular market value and (z) the term “
regular market value
” means the amount which a capable
and diligent businessman could obtain for the property in question within a reasonable time from an interested buyer who is willing to purchase under ordinary conditions.
3.19
Bank Holding Company
. The Borrower has complied in all Material respects with all federal, state and local laws pertaining to bank holding companies, including the Bank Holding Company Act of
1956 (12 U.S.C. § 1841(a)(2)(A)
et seq.
) and Chapter 202 of the Texas Finance Code, and there are no unsatisfied conditions precedent to its engaging in the business of being a registered bank holding company.
3.20
FDIC Insurance
. The deposits held by each Bank Subsidiary of the Borrower are insured by the FDIC to the maximum extent
permitted by applicable federal law and no event, act or omission has occurred which would adversely affect the status of any Bank Subsidiary as an FDIC-insured bank.
3.21
Investigations
. Neither the Borrower nor any Bank Subsidiary is (a) to the Borrower’s knowledge, under investigation by any Regulatory Authority or any other Governmental Authority
which would cause a Material Adverse Effect, or (b) is operating under any Material formal or informal restrictions or understandings imposed by or agreed to in connection with any Regulatory Authority or any other Governmental Authority.
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SECTION 4
CONDITIONS PRECEDENT TO OBLIGATIONS
4.1
Initial Loan
. In addition to the terms and conditions set forth in Section 4.2, the obligation of the Lender to make the
initial Loan is conditioned on the Lender receiving, prior to or on the date of the Lender’s first extension of credit, each of the following items in form, detail and content reasonably satisfactory to the Lender and its counsel:
(a) a duly executed Revolving Credit Note;
(b) a certificate of the secretary or an assistant secretary of the Borrower and each of its Subsidiaries (i) certifying an attached complete and correct copy of its bylaws; (ii) solely in the
case of the Borrower, certifying an attached complete and correct copy of resolutions duly adopted by the Borrower’s board of directors which have not been amended since their adoption and remain in full force and effect, authorizing the
execution, delivery and performance of this Agreement and the Related Documents to which it is a party; (iii) solely in the case of Independent Bank, certifying an attached copy of its certificate of formation, and in the case of the Borrower
and each other Subsidiary, certifying that the articles of incorporation or charter attached to the applicable certificate of the Office of the Secretary of State of incorporation delivered pursuant to Section 4.1(d) hereof are complete and
correct and have not been amended since the date of the last date of amendment thereto indicated on such certificate of the secretary of state; and (iv) certifying as to the incumbency and specimen signature of each officer executing this
Agreement and all other Related Documents to which it is a party, and including a certification by another officer as to the incumbency and signature of the secretary or assistant secretary executing the certificate;
(c) an opinion of counsel for the Borrower in form and substance reasonably satisfactory to the Lender and its counsel;
(d) certificates of status or good standing for the Borrower and each Subsidiary issued by the applicable Office of the Secretary of
State of incorporation or organization and the respective state, if any, in which the Borrower’s or such Subsidiary’s principal place of business is located, and certified copies of the Articles of Incorporation for the Borrower and each
Subsidiary, all issued by the Office of the Secretary of State of the state of the Borrower’s or such Subsidiary’s incorporation, as applicable, within thirty (30) days of the date hereof;
(e) certification that there are no (i) Material Liens of record on the Property of the Borrower only (and not any of its
Subsidiaries) other than Permitted Liens and (ii) Material Liens of record on the Property of any Bank Subsidiary other than Permitted Liens; and
(f) a duly executed Negative Pledge Agreement.
4.2
Each Loan
. The
obligation of the Lender to make each Loan is subject to the satisfaction, on the date of making such Loan, of the following conditions:
(a) receipt by the Lender of a Loan Request executed by the Borrower;
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(b) the Lender shall have determined that since the date of the most recent financial
statements referred to in Section 3.2 no event or condition shall have occurred and be continuing that constitutes a Material Adverse Effect;
(c) all of the representations, warranties and acknowledgments of the Borrower contained in this Agreement and the Related Documents shall be true and accurate in all Material respects as if made on such
date (except for representations, warranties and acknowledgments which speak as of a particular date), and each Loan Request submitted by the Borrower shall constitute an affirmation by the Borrower that such representations, warranties and
acknowledgements are then true and accurate in all Material Respects;
(d) there shall not exist on such date any Default and
no Default shall occur as the result of the making or incurring of such Obligation;
(e) the aggregate principal amount of all
Revolving Loans outstanding together with the amount of any Revolving Loan requested shall not exceed the Revolving Loan Commitment;
(f) each of the Related Documents shall remain in full force and effect; and
(g)
the Borrower shall not be in default of any agreement of any type with the Lender.
SECTION 5
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees to and for the benefit of the Lender, that, from and after the date of this Agreement
and until the Termination Date and until the entire amount of all Obligations to the Lender are paid in full, it shall and, with the exception of Sections 5.8, 5.9 and 5.12, shall cause each Subsidiary to:
5.1
Corporate Existence; Compliance With Laws; Maintenance of Business; Taxes
. (a)(i) With respect to the Borrower, maintain its
corporate existence, (ii) with respect to each Subsidiary, maintain its corporate existence except in the case of a merger or consolidation with another Subsidiary, or where the failure to maintain such corporate existence could not be
reasonably expected to have a Material Adverse Effect, and (iii) with respect to the Borrower and each Subsidiary, except where the failure to do so could not be expected to have a Material Adverse Effect, maintain its licenses, permits, rights
and franchises; (b) comply in all Material respects with all Requirements of Law; (c) conduct its business substantially as now conducted and proposed to be conducted; and (d) pay before the same become delinquent and before penalties
accrue thereon, all Taxes, assessments and other government charges against it and its Property, and all other liabilities except to the extent and so long as the same are being contested in good faith by appropriate proceedings, with adequate
reserves having been provided, and except where the failure to do so would not be expected to have a Material Adverse Effect.
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5.2
Maintenance of Property; Insurance
.
(a) Keep all Property Material to its business, useful and necessary in its business, whether leased or owned, in adequate condition.
(b) Maintain with good, reputable and financially sound insurance underwriters insurance of such nature and in such amounts
as is customarily maintained by companies engaged in the same or similar business and such other insurance as may be required by law or as may be reasonably required in writing by the Lender. Upon the Lender’s request, the Borrower shall
furnish copies of all such insurance policies or a certificate evidencing that the Borrower has complied with the requirements of this paragraph on the date hereof and on each renewal date of such policies.
5.3
Financial Statements; Notices
. Maintain an adequate system of accounting in accordance with sound accounting practice, and
furnish to the Lender such information respecting the business, assets and financial condition of the Borrower and its Subsidiaries as the Lender may reasonably request and, without request, furnish to the Lender:
(a) as soon as available, and in any event within forty five (45) days after the end of each Fiscal Quarter (other than any Fiscal
Quarter that completes a Fiscal Year), financial statements including the balance sheet for the Borrower and its Subsidiaries as of the end of each such Fiscal Quarter and statements of income, changes in shareholders’ equity and cash flows of
the Borrower and its Subsidiaries for each such Fiscal Quarter and for that part of the Fiscal Year ending with such Fiscal Quarter, setting forth in each case, in comparative form, figures for the corresponding periods in the preceding Fiscal Year
certified as true, correct and complete, subject to review and normal
year-end
adjustments, by the chief financial officer of the Borrower. The Lender agrees that posting to EDGAR of the Form 10-Q for the
Borrower for each Fiscal Quarter will meet all financial statement delivery requirements of this Section 5.3(a);
(b) as
soon as available, and in any event within seventy-five (75) days after the close of each Fiscal Year, a copy of the detailed annual audit report for such year and accompanying financial statements for the Borrower and its Subsidiaries as of
the end of such year, containing balance sheets and statements of income, changes in shareholders’ equity and cash flows for such year and for the previous Fiscal Year, as audited by independent certified public accountants of recognized
standing selected by the Borrower and satisfactory to the Lender, which report shall be accompanied by (i) the unqualified opinion of such accountants to the effect that the statements present fairly, in all Material respects, the financial
position of the Borrower as of the end of such year and the results of its operations and its cash flows for the year then ended in conformity with GAAP; and (ii) a certificate of such accountants stating that their audit disclosed no Default
or that their audit disclosed a Default and specifying the same and the action taken or proposed to be taken with respect thereto. The Lender agrees that the posting to EDGAR of the FORM 10-K for the Borrower for each Fiscal Year will meet all
financial statement delivery requirements of this Section 5.3(b);
(c) as soon as available, and in any event within
sixty (60) days after the end of each Fiscal Quarter (other than any Fiscal Quarter that completes a Fiscal Year) and sixty (60) days after the end of each Fiscal Year, copies of the Borrower’s quarterly Parent Borrower Only Financial
Statements for Large Bank Holding Companies – FR Y-9LP and Consolidated Financial Statements
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for Bank Holding Companies – FR Y-9C prepared by the Borrower in compliance with the requirements of each applicable Regulatory Authority, all prepared in accordance with the requirements
imposed by the applicable Regulatory Authorities. The Lender agrees that the posting to the applicable Regulatory Authority’s website of the Parent Borrower Only Financial Statements for Large Bank Holding Companies – FR Y-9LP and
Consolidated Financial Statements for Bank Holding Companies – FR Y-9C for the Borrower will meet all report delivery requirements of this Section 5.3(c);
(d) as soon as available, and in any event within forty five (45) days after the end of each Fiscal Quarter (excluding any Fiscal Quarter that completes a Fiscal Year) and forty five (45) days
after the end of each Fiscal Year, the certificate of the president or chief financial officer of the Borrower substantially in the form of
Exhibit C
attached hereto, among other things: (i) showing the calculations of the
financial covenants contained herein; (ii) stating that a review of the activities of the Borrower during such period has been made under his supervision to determine whether the Borrower has observed, performed and fulfilled each and every
covenant and condition in this Agreement and the Related Documents; and (iii) stating that no Default has occurred (or if such Default has occurred, describing such Default in reasonable detail and specifying the period of existence thereof and
the steps, if any, being undertaken to correct the same);
(e) as soon as available, and in any event within five
(5) Business Days of filing, a copy of each other filing and report made by the Borrower with or to any securities exchange or the Securities and Exchange Commission, and of each communication from the Borrower to its equity holders generally.
The Lender agrees that the posting to EDGAR of any such communication will meet all filing and report delivery requirements of this Section 5.3(e);
(f) as soon as available, and in any event within forty (45) days after the end of each Fiscal Quarter, the complete Call Report and/or Thrift Financial Report, as applicable, prepared by Borrower
and/or each Bank Subsidiary at the end of such Fiscal Quarter in compliance with the requirements of each applicable Regulatory Authority, all prepared in accordance with the requirements imposed by the applicable Regulatory Authorities. The Lender
agrees that the posting to the applicable Regulatory Authority’s website of the Call Report and/or Thrift Financial Report, as applicable, for the Borrower and each Bank Subsidiary will meet all report delivery requirements of this
Section 5.3(f);
(g) as soon as available, and in any event within five (5) days, but without duplication of any
other requirements set forth in this Section 5.3, a copy of all periodic reports which are required by law to be furnished to any Regulatory Authority having jurisdiction over the Borrower or any Bank Subsidiary (including Federal Reserve Bank
reports, but excluding any report which applicable law or regulation prohibits the Borrower or a Bank Subsidiary from furnishing to the Lender). The Lender agrees that the posting to the applicable Regulatory Authority’s website for the
Borrower and each Bank Subsidiary will meet all report delivery requirements of this Section 5.3(g); and
(h) promptly
upon learning of the occurrence of any of the following, written notice thereof, describing the same in reasonable detail and the steps being taken with respect thereto: (i) the occurrence of any Default or Event of Default; (ii) the
institution of, or any Materially adverse determination or development in, any Material litigation, arbitration proceeding
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or governmental proceeding; (iii) the occurrence of a “reportable event” under, or the institution of steps by the Borrower or any Subsidiary to withdraw from, or the institution
of any steps to terminate, any Employee Plan as to which the Borrower or any Subsidiary may have liability; (iv) the commencement of any dispute which could reasonably be expected to lead to the modification, transfer, revocation, suspension or
termination of this Agreement or any Related Document; (v) any event which would have a Material Adverse Effect; or (vi) any change in the Chief Executive Officer or Executive Vice President of the Borrower or any change in the Chief
Executive Officer of any Bank Subsidiary.
All financial statements referred to herein shall be complete and correct in all Material respects
and shall be prepared in reasonable detail and on a consolidated and consolidating basis in accordance with GAAP (including financial statements for the Consolidated Bank Subsidiaries on a consolidated basis), applied consistently throughout all
accounting periods, excepting any change in accounting methodology and/or business combination reporting resulting from the adoption of new accounting guidance.
5.4
Inspection of Property and Records
. At any reasonable time following reasonable notice, as often as may be reasonably desired and, from and after the occurrence of and during the continuance of
an Event of Default, at the Borrower’s expense, permit representatives of the Lender to visit the Borrower’s and its Subsidiaries’ Property, to examine the Borrower’s and its Subsidiaries books and records and to discuss the
Borrower’s and its Subsidiaries’ affairs, finances and accounts with its respective officers and independent certified public accountants (who shall be instructed by the Borrower to comply with reasonable requests of the Lender or its
agents for access to the work papers of such accountants) and the Borrower shall facilitate such inspection and examination;
provided, however,
that if no Default or Event of Default has occurred, no more than two such examinations shall
occur per year.
5.5
Use of Proceeds
. Use the entire proceeds of the Obligations only for general corporate purposes of
the Borrower and its Subsidiaries, including, without limitation, funding operating expenses, dividends that are not prohibited under Section 6.4 hereof, and interest on Indebtedness of the Borrower and its Subsidiaries.
5.6
Comply With, Pay and Discharge All Notes, Mortgages, Deeds of Trust and Leases
. Comply with, pay and discharge all existing
notes, mortgages, deeds of trust, leases, indentures and any other contractual arrangements to which the Borrower or any Subsidiary is a party (including all Indebtedness) in accordance with the respective terms of such instruments so as to prevent
any default thereunder, except where the failure to do so would not be expected to have a Material Adverse Effect.
5.7
Environmental Compliance
.
(a) Maintain at all times all Material permits, licenses and other authorizations required
under Environmental Laws, and comply in all Material respects with all terms and conditions of the required permits, licenses and authorizations and all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws.
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(b) Notify the Lender promptly upon obtaining knowledge that (i) any Property
previously or presently owned or operated by the Borrower or any Subsidiary is the subject of a Material environmental investigation by any Governmental Authority having jurisdiction over the enforcement of Environmental Laws, (ii) the Borrower
or any of its Subsidiaries has been or may be named as a responsible party subject to a Material Environmental Liability, or (iii) the Borrower obtains knowledge of any Hazardous Substance located on any Property of the Borrower that might lead
to a Material Environmental Liability.
(c) At any time following the Borrower’s notification to the Lender pursuant to
Section 5.7(b) hereof or the Lender otherwise becoming aware of any of the items described in Section 5.7(b) hereof, following notice from the Lender, and as often as may be reasonably desired, permit the Lender or an independent
consultant selected by the Lender to conduct an environmental investigation satisfactory to the Lender for the purpose of determining whether the Borrower, each Subsidiary and their respective Properties comply with Environmental Laws and whether
there exists any condition or circumstance which may require a cleanup, removal or other remedial action by the Borrower or a Subsidiary with respect to any Hazardous Substance. The Borrower and its Subsidiaries shall facilitate such environmental
audit. The Lender shall provide the Borrower, at the Borrower’s request, with all reports and findings but the Borrower may not rely on such environmental investigation for any purpose. Reasonable costs for any environmental investigation of
Property by the Lender shall be at the Borrower’s expense where conducted (i) under this Section 5.7(c), (ii) upon the occurrence of an event described in Section 5.7(b), or (iii) at any time the Property is the subject
of an environmental investigation by a Governmental Authority having jurisdiction over the enforcement of Environmental Laws.
Notwithstanding
the foregoing, nothing contained in this Agreement, or in the Related Documents, or in the enforcement of this Agreement or the Related Documents, shall constitute or be construed as granting or providing the right, power or capacity to the Lender
to exercise (a) decision making control of the Borrower’s or any Subsidiary’s compliance with any Environmental Law, or (b) day to day decision making of the Borrower or any Subsidiary with respect to (i) compliance with
Environmental Laws or (ii) all or substantially all of the operational aspects of the Borrower or any Subsidiary.
5.8
Fees and Costs
.
(a) Pay on the date hereof to the Lender a facility fee in consideration for the Revolving Loan
Commitment made hereunder in an amount equal to 0.05% of the amount of the Revolving Loan Commitment on the date hereof.
(b)
Pay the Lender on the first Business Day of each of January, April, July and October, in arrears, the accrued and unpaid commitment fee for the Revolving Loan Commitment, which commitment fee shall accrue at a rate
per annum
equal to the
Commitment Fee Percentage of the difference between (i) the Revolving Loan Commitment and (ii) the Average Daily Principal Balance during the most recently ended Fiscal Quarter (or portion of such Fiscal Quarter). The commitment fee shall
be computed daily based on the actual number of days elapsed in a year of 360 days. All unpaid commitment fees shall be due and payable on the Termination Date. The Lender may debit to the Borrower’s Loan Account all commitment fees when due,
without prior notice to or consent of the Borrower.
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(c) Pay immediately upon receipt of an invoice the fees and expenses to be reimbursed to the
Lender pursuant to Section 5.4, including travel expenses incurred by representatives of the Lender.
(d) Pay immediately
upon receipt of an invoice from the Lender all fees and expenses to be reimbursed to the Lender pursuant to this Agreement, the Related Documents and the Obligations, and any amendments thereof and supplements thereto, including the reasonable fees
of counsel in connection with the preparation and negotiation of this Agreement, the Related Documents and all amendments thereto, and any waivers of the terms and provisions thereof and the consummation of the transactions contemplated herein.
(e) Pay immediately upon receipt of an invoice from the Lender all fees and expenses (including attorneys’ fees)
incurred by the Lender in seeking advice under this Agreement and the Related Documents with respect to protection or enforcement (including collection and disposition of Collateral, if any) of the Lender’s rights and remedies under this
Agreement and the Related Documents and with respect to the Obligations (including collection thereof) and all costs and expenses which may be incurred by the Lender as a consequence of a Default as provided in Section 7.2(d) and all reasonable
fees and expenses incurred by the Lender in connection with any bankruptcy, receivership, conservatorship or other debtor relief proceeding or any federal or state liquidation, rehabilitation or supervisory proceeding involving the Borrower or any
of its Subsidiaries.
5.9
Indemnity
. Indemnify the Lender, and its employees, officers, directors, shareholders,
agents, attorneys, successors and permitted assigns (each such Person being called an “
Indemnitee
”) against any and all losses, claims, damages, liabilities, obligations, penalties, actions, judgments, suits, costs and expenses of
any kind or nature whatsoever, including attorneys’ fees and expenses, incurred by them arising out of, in any way connected with, or as a result of: (a) the execution and delivery of this Agreement or the Related Documents or the
transactions contemplated hereby or protection or enforcement (including collection or disposition of Collateral, if any) of the Lender’s rights under this Agreement or the Related Documents; (b) any violation of Environmental Laws or any
other Requirements of Law by the Borrower or any Subsidiary or any of its Property as well as any cost or expense incurred in remedying such violation; and (c) any claim, litigation, investigation or proceedings relating to any of the foregoing
or the transactions contemplated by this Agreement, whether or not the Lender is a party thereto;
provided, however,
that such indemnity shall not apply to any such losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of an Indemnitee or result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of
such Indemnitee’s obligations hereunder or under any other Related Document, if the Borrower has obtained a final and non-appealable judgment in its favor on such claim as determined by a court of competent jurisdiction. The foregoing
indemnities shall survive the Termination Date, the consummation of the transactions contemplated by this Agreement, the repayment of the Obligations and the invalidity or unenforceability of any term or provision of this Agreement or of the Related
Documents and shall remain in effect regardless of any investigation made by or on behalf of the Lender or the Borrower and the content or accuracy of any representation or warranty made under this Agreement.
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5.10 [Reserved]
5.11
Financial Covenants
.
(a)
Loan Loss Reserves to Non-Performing
Loans Ratio.
With respect to the Consolidated Bank Subsidiaries, maintain as at the end of each Fiscal Quarter a ratio of Loan Loss Reserves to Non-Performing Loans of not less than 80%.
(b)
Maximum Texas Ratio.
With respect to the Consolidated Bank Subsidiaries, maintain as at the end of each Fiscal Quarter a Texas
Ratio of not more than 18%.
(c)
Total Risk-Based Capital Ratio of Consolidated Bank Subsidiaries.
With respect to the
Consolidated Bank Subsidiaries, maintain as at the end of each Fiscal Quarter a Total Risk-Based Capital Ratio equal to or greater than 10.75%.
(d)
Minimum Return on Average Assets.
With respect to the Consolidated Bank Subsidiaries, maintain as at the end of any Fiscal Quarter a Return on Average Assets of at least equal to 0.90%.
(e)
Minimum Liquid Assets.
With respect to the Borrower, maintain at all times Liquid Assets of at least equal to
$5,000,000.
(f)
Total Risk-Based Capital Ratio of Borrower and Consolidated Subsidiaries.
With respect to the Borrower
and its consolidated Subsidiaries, on a consolidated basis, maintain as at the end of each Fiscal Quarter a Total Risk-Based Capital Ratio equal to or greater than 11.00%.
(g)
Well-Capitialized Status.
With respect to each Bank Subsidiary, maintain at all times such capital as may be necessary to cause such Bank Subsidiary to be classified as a “well
capitalized” institution in accordance with all laws and regulations (as such laws and regulations may be amended, supplemented or otherwise modified from time to time) of the FDIC and each other Regulatory Authority that has supervisory
authority over such Subsidiary.
(h)
Compliance with Regulatory Requirements.
At all times remain in Material
compliance with all regulatory rules and requirements of or imposed by the FDIC and all other Regulatory Authorities which are applicable to or govern the Borrower or any of its Subsidiaries.
5.12
Revolving Loans Resting Period
. For a period of not less than thirty (30) consecutive days during each twelve
(12) month period from June 1 through May 30 of any calendar year, pay so much of the aggregate outstanding principal amount of Revolving Loans as is necessary to reduce the aggregate outstanding amount of Revolving Loans to an amount
equal to $0.00 at all times during such thirty (30) day consecutive period.
SECTION 6
NEGATIVE COVENANTS
The Borrower covenants and agrees that, from and after the date of this Agreement and until the Termination Date and until
all Obligations to the Lender are paid in full, the Borrower and each Subsidiary shall not directly or indirectly without the prior written consent of the Lender:
6.1
Change of Control; Consolidation, Merger, Acquisitions, Etc
. (a) Enter into a Change of Control transaction; or (b) purchase of otherwise acquire all or substantially all of the
assets or stock of a Person (which Person would, upon the consummation of such transaction, become a Bank Subsidiary), unless, at the time such purchase or other acquisition is announced, the Borrower provides the Lender with a pro forma compliance
certificate that includes a certification that such purchase or other acquisition will not cause an Event of Default (assuming for the purposes of the
pro forma
calculation of the financial covenants set forth in Section 5.11 hereof that
the effective date of such purchase or other acquisition were the end of a Fiscal Quarter or Fiscal Year, as applicable).
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6.2
Holding Company Indebtedness
. With respect to the Borrower only (and not any of
its Subsidiaries) issue, create, incur, assume or otherwise become liable with respect to (or agree to issue, create, incur, assume or otherwise become liable with respect to), or permit to remain outstanding, any Holding Company Indebtedness,
except: (a) the Obligations; (b) Holding Company Indebtedness disclosed on the Borrower’s quarterly Parent Borrower Only Financial Statements for Large Bank Holding Companies – FR Y-9LP dated March 31,2014, and
(c) Subordinated Indebtedness.
6.3
Liens; Negative Pledges
. With respect to (a) the Borrower only (and not
any of its Subsidiaries), create or permit to be created or allow to exist any Lien upon or interest in any Property of the Borrower, and (b) any Bank Subsidiary only, create or permit to be created or allow to exist any Lien upon or interest
in any Property of such Bank Subsidiary except Permitted Liens. The Borrower further agrees that it shall not, without the prior written consent of the Lender, enter into, become a party to or become subject to any negative pledge agreement relating
to any of its assets with any third party except as set forth in the Related Documents.
6.4
Dividend; Distributions
.
Make any Restricted Payments;
provided, however,
that, so long as no Default has occurred and is continuing, or will occur as a result of any such payment (with the calculation of the covenants set forth in Section 5.11 being made on a
pro forma
basis as at the date of such payment), the Borrower may pay dividends and distributions to its shareholders as permitted by applicable governmental laws and regulations, including dividends with respect to SBLF Preferred Stock.
6.5
Loans; Investments
. Make or commit to make advances, loans, extensions of credit or capital contributions to, or
purchases of any stock, bonds, notes, debentures or other securities of, or make any other investment in, any Person except, advances in the ordinary course of business to Subsidiaries consistent with past practices, or for purposes of acquiring,
merging, consolidating Subsidiaries, or as otherwise permitted by applicable governmental laws and regulations, or as otherwise permitted by this Section 6.
6.6
Compliance with ERISA
. (a) Terminate any Employee Plan so as to result in any Material liability to PBGC; (b) engage in any “prohibited transaction” (as defined in
Section 4975 of the Code) involving any Employee Plan which would result in a Material liability for an excise tax or civil penalty in connection therewith; or (c) incur or suffer to exist any Material “accumulated funding
deficiency” (as defined in Section 302 of ERISA), whether or not waived, involving any condition, which presents a risk of incurring a Material liability to PBGC by reason of termination of any such Employee Plan.
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6.7
Affiliates
. Permit any transaction with any Affiliate of the Borrower or a
Subsidiary that violates Section 23A or 23B of the Federal Reserve Act, as amended, or enter into any transaction (including the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate of the
Borrower or a Subsidiary, except in the ordinary course of business and pursuant to the reasonable requirements of the Borrower’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary than the Borrower or such Subsidiary would obtain in a comparable arms-length transaction.
SECTION 7
DEFAULT
AND REMEDIES
7.1
Events of Default Defined
. Any one or more of the following shall constitute an “
Event
of Default
”:
(a) the Borrower shall fail to pay (i) principal of any Loan (including, without limitation, the
Notes and the payments required by Section 2.5(b)) when and as the same shall become due and payable, or (ii) interest on any Loan (including, without limitation, the Notes and the payments required by Section 2.5(b)), within five
(5) days after the same shall become due and payable, or (iii) fees or other obligations in respect of the Obligations (including, without limitation, payments required by Sections 2.6 and 5.8) within ten (10) days after the same
shall become due and payable, in either case whether upon demand, at maturity, by acceleration or otherwise;
(b) the Borrower
or any of its Subsidiaries shall fail to observe or perform any of the covenants, agreements or conditions contained in Section 5.1(h);
(c) the Borrower or any of its Subsidiaries shall fail to observe or perform any of the covenants, agreements or conditions contained in this Agreement or the Related Documents (other than any such
failure that results in an Event of Default as expressly provided in any other paragraph of this Section 7.1) and such failure shall continue for 15 Business Days after Borrower’s receipt of written notice of such failure by Lender;
(d) (i) the Borrower or any of its Subsidiaries shall default (as principal or guarantor or otherwise) in the payment of any
Indebtedness (other than the Obligations) aggregating $100,000 or more; (ii) the maturity of any such Indebtedness shall, in whole or in part, have been accelerated, or any such Indebtedness shall, in whole or in part, have been required to be
prepaid prior to the stated maturity thereof, in accordance with the provisions of any contract evidencing, providing for the creation of, or concerning such Indebtedness; or (iii) (A) any event shall have occurred and be continuing that
permits (or, with the passage of time or the giving of notice or both, would permit) any holder or holders of such Indebtedness, any trustee or agent acting on behalf of such holder or holders or any other Person so to accelerate such maturity or
require any such prepayment and (B) if the contract evidencing, providing for the creation of, or concerning such Indebtedness provides for a cure period for such event, such event shall not be cured prior to the end of such cure period or such
shorter period of time as the Lender may specify;
(e) A default shall be continuing under any contract, arrangement, or
agreement (other than a contract relating to Indebtedness to which clause (d) of this Section 7.1 is applicable) binding upon the Borrower or any Subsidiary, except a default that, together with all other such defaults, has not had and
will not have a Materially Adverse Effect on the Borrower and the Subsidiaries taken as a whole.
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(f) any representation or warranty made by the Borrower herein or in any of the Related
Documents or in any certificate, document or financial statement delivered to the Lender shall prove to have been incorrect in any Material adverse respect as of the time when made or given;
(g) a final judgment (or judgments) for the payment of amounts aggregating in excess of $100,000 shall be entered and final against the
Borrower or any of its Subsidiaries, and such judgment (or judgments) shall remain outstanding and unsatisfied, unbonded or unstayed after thirty (30) days from the date of entry thereof;
(h) the Borrower or any of its Subsidiaries shall (i) become insolvent or take or fail to take any action which constitutes an
admission of inability to pay its debts as they mature; (ii) make an assignment for the benefit of creditors; (iii) petition or apply to any tribunal for the appointment of a custodian, receiver or any trustee for the Borrower or such
Subsidiary or a substantial part of its respective assets; (vi) suffer a rehabilitation proceeding, custodianship, receivership, conservatorship or trusteeship to continue undischarged for a period of sixty (60) days or more;
(iv) commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; (v) by any act or omission indicate
its consent to, approval of or acquiescence in any rehabilitation proceeding or any such petition, application or proceeding or order for relief or the appointment of a custodian, receiver, conservator or any trustee for it or any substantial part
of any of its properties; or (vi) adopt a plan of liquidation of its assets;
(i) any Person shall: (i) petition or
apply to any tribunal for the appointment of a custodian, receiver, conservator or any trustee for the Borrower or any Subsidiary or a substantial part of its respective assets which continues undischarged for a period of sixty (60) days or
more; (ii) commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, rehabilitation, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect, in which an order for
relief is entered or which remains undismissed for a period of sixty (60) days or more;
(j) any Governmental Authority
or any geotechnical engineer or environmental consultant hired by the Borrower, the Lender or any Governmental Authority shall determine that the potential uninsured or unrecoverable liability of the Borrower or a Subsidiary for damages caused by
the discharge of any Hazardous Substance, including liability for real property damage or remedial action related thereto or liability for personal injury claims, exceeds $1,000,000 and the Borrower is unable to provide for such liability in a
manner reasonably acceptable in good faith to the Lender;
(k) (i) the FDIC, the Federal Reserve Board, the OCC, or any other
Regulatory Authority shall (A) issue any formal or informal Material notice, order or directive involving activities deemed unsafe or unsound by the Borrower or any of its Subsidiaries, (B) issue a memorandum of understanding, capital
maintenance agreement, cease and desist order, prompt corrective action order, or other directive (including a capital raise directive) involving the Borrower or any of its Subsidiaries, (C) cause the suspension or removal of the Chief
Executive Officer or any
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Executive Vice President of the Borrower or the Chief Executive Officer of any of the Subsidiaries, or (D) otherwise restrict the ability of any Subsidiary to pay dividends to the Borrower
without prior regulatory approval, or (ii) the FDIC shall terminate its insurance coverage with respect to the Bank Subsidiaries; or
(l) this Agreement or any of the Related Documents shall at any time cease to be in full force and effect, or the Borrower shall so assert or shall attempt to revoke or terminate this Agreement or any
Related Document.
7.2
Remedies Upon Event of Default
. Upon the occurrence of an Event of Default (which has not been
cured to the extent cure is expressly permitted):
(a) specified in clause (h) or (i) of Section 7.1, then,
without presentment, notice, demand or action of any kind by the Lender, all of which are hereby waived: (i) the obligations of the Lender to make any further advances to the Borrower shall automatically and immediately terminate; and
(ii) the entire amount of the Obligations shall be automatically accelerated and immediately due and payable;
(b)
specified in any clauses of Section 7.1 other than clause (g) or (h), the Lender may, without presentment, notice, demand or action of any kind by the Lender, all of which are hereby waived, (i) immediately terminate its obligation to
make any further advances to the Borrower, and the same shall immediately terminate; and (ii) declare the entire amount of the Obligations immediately accelerated, due and payable;
(c) the Lender may at any time, without prior notice or demand, set off any credit balance or other money now or hereafter owed to the
Borrower or any guarantor against all or any part of the Obligations hereunder; and
(d) the Lender shall have all of the
rights and remedies provided to the Lender by this Agreement and the other Related Documents, and all rights and remedies provided by law and in equity, by statute or otherwise, and no remedy herein conferred upon the Lender is intended to be
exclusive of any other right and remedy and each right and remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, by statute or otherwise.
In addition to and not in lieu of any other right or remedy the Lender might have, the Lender at any time and from time to time at its election may (but
shall not be required to) do or perform or comply with or cause to be done or performed or complied with anything which the Borrower may be required to do, perform or comply with, which after written demand the Borrower has failed or refused to do,
perform or comply with, and the Borrower shall reimburse the Lender upon demand for any reasonable cost or expense which the Lender may incur in such respect, together with interest thereon at the rate equal to the rate payable under the Revolving
Credit Note following an Event of Default from the date of such demand until paid. No failure or delay on the part of the Lender in exercising any right or remedy hereunder shall operate as a waiver thereof nor shall any single or partial exercise
of any right hereunder preclude any further exercise thereof or the exercise of any other right or remedy. No remedy herein conferred upon the Lender is intended to be exclusive of any other right and remedy, and each right and remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity.
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7.3
Termination of Commitment
. During any time an Event of Default has occurred and
is continuing, subject to any right to cure such Event of Default herein or in any of the Related Documents, the Lender shall have no further obligation to make any further Loans or advances to the Borrower for any reason, but any Loans or advances
made by the Lender to the Borrower in its sole discretion shall become part of the Obligations.
SECTION 8 MISCELLANEOUS
8.1
Successors and Assigns
. The provisions of this Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of the parties hereto. The Borrower’s rights and liabilities under this Agreement and the Related Documents are not assignable in whole or in part without the prior written consent of the Lender.
8.2
Assignments and Participations
.
(a)
Assignments.
(i) The Borrower may not assign any of its rights or obligations under this Agreement or any Related Document without the prior written consent of the Lender, and no
assignment of any such obligation shall release the Borrower therefrom unless the Lender shall have consented to such release in a writing specifically referring to the obligation from which the Borrower is to be released.
(ii) The Lender may from time to time assign any or all of its rights and obligations under this Agreement or any Related Document to any
Person, provided that, so long as no Event of Default shall have occurred and be continuing, the Lender shall provide at least ten (10) days prior written notice to the Borrower and no such assignment shall be made to any Person other than one
or more commercial banks each of which has capital and retained earnings of at least $100 million without the consent of the Borrower. Any assignment by the Lender of any or all of its obligations under this Agreement or any Related Document shall
release the Lender therefrom.
(b)
Participations.
The Lender may from time to time sell or otherwise grant
participations in any or all of its rights and obligations under this Agreement or any Related Document to any Person, provided that, so long as no Event of Default shall have occurred and be continuing, the Lender shall provide at least ten
(10) days prior written notice to the Borrower and no such participation shall be sold or granted to any Person other than one or more commercial banks each of which has capital and retained earnings of at least $100 million without the consent
of the Borrower.
(c)
Rights of Assignees and Participants.
Each permitted assignee of, and each permitted holder of a
participation in, the rights of the Lender under this Agreement or any Related Document, if and to the extent the applicable assignment or participation agreement so provides, (i) shall, with respect to its assignment or participation, be
entitled to all of the rights of the Lender (as fully, in the case of a holder of a participation, as though it were the Lender) and (ii) may exercise any and all rights of set-off or banker‘s lien with respect thereto (as fully, in the
case of a holder of a participation, as though the Borrower were directly indebted to such holder for amounts payable
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under this Agreement or any Related Document to which such holder is entitled under the applicable participation agreement); provided, however, that no assignee or holder of a participation shall
be entitled to any amounts that would otherwise be payable to it with respect to its assignment or participation under Section 2.4, Section 2.7, or Section 2.8 unless (y) such amounts are payable in respect of any adoption or
implementation of, or change to, any Regulation, or interpretation or administration thereof, after the date the applicable assignment or participation agreement was executed or (z) such amounts would have been payable to the Lender that made
such assignment or granted such participation if such assignment had not been made or such participation granted.
(d)
Certain Pledges.
The Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank;
provided
that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
8.3
Confidentiality.
The Lender shall hold all non-public information regarding the Borrower and the Subsidiaries and their
businesses, identified as such by the Borrower and obtained by any Lender pursuant to the requirements hereof, in accordance with its customary procedures for handling confidential information of such nature, it being understood and agreed by the
Borrower that, in any event, the Lender (a) may make disclosures of such non-public information (i) to its Affiliates and to the Lender’s and its Affiliates’ respective employees responsible for the administration of this
Agreement or the operations supporting the facility provided hereunder or otherwise on a “need-to-know” basis, legal counsel, independent auditors and other experts or agents and advisors or to the Lender’s current or prospective
funding sources and to other Persons authorized by the Lender to organize, present or disseminate such information in connection with disclosures otherwise made in accordance with this Section 8.3 (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential); (ii) to any actual or potential assignee, transferee, or Participant of any rights, benefits,
interests and/or obligations under this Agreement and the Related Documents or to any direct or indirect contractual counterparties (or the professional advisors thereto) in swap or derivative transactions related to the Obligations (it being
understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential); (iii) to (A) any rating agency in connection with rating the
Borrower or its Subsidiaries or the Loans and/or the Commitment or (B) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Loans; (iv) as required or requested
by any Regulatory Authority purporting to have jurisdiction over the Lender or its Affiliates (including any self-regulatory authority, such as the National Association of Insurance Commissioners); provided that unless prohibited by applicable law
or court order, the Lender shall make reasonable efforts to notify the Borrower of any request by such Regulatory Authority (other than any such request in connection with any examination of the financial condition or other routine examination of
the Lender by such Regulatory Authority) for disclosure of any such non-public information prior to the actual disclosure thereof; (v) to the extent required by order of any court, governmental agency or representative thereof or in any pending
legal or administrative proceeding, or otherwise as required by applicable law or judicial process; provided that unless prohibited by applicable law or court order, the Lender shall make reasonable efforts to notify the Borrower of such required
disclosure
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prior to the actual disclosure of such non-public information; (vi) in connection with the exercise of any remedies hereunder or under any Related Document or any action or proceeding
relating to this Agreement or any Related Document or the enforcement of rights hereunder or thereunder, (vii) with the consent of the Borrower, or (viii) to the extent such information (A) becomes publicly available other than as a
result of a breach of this Section 8.3, (B) becomes available to the Lender or any of its Affiliates on a non-confidential basis from a source other than the Borrower or a Subsidiary, or (C) is independently developed by the Lender;
and (b) may disclose the existence of this Agreement and the information about this Agreement to market data collectors and similar services providers to the lending industry (including for league table designation purposes) and to service
providers to the Lender in connection with the administration and management of this Agreement and the other Related Documents. Notwithstanding anything herein to the contrary, any party to this Agreement (and any employee, representative, or other
agent of any party to this Agreement) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement, all materials of any kind (including opinions or other
tax analyses) that are provided to it relating to such tax treatment and tax structure and any facts that may be relevant to understanding such tax treatment, which materials and facts shall not include for this purpose the names of the parties or
any other Person named herein, or information that would permit identification of the parties or such other Persons, or any pricing terms or other nonpublic business or financial information that is unrelated to such tax treatment or facts;
provided, however, the foregoing is not intended to waive the attorney-client privilege or any other privileges, including the tax advisor privilege under Section 7525 of the Code.
8.4
Governing Law
. This Agreement and the Related Documents shall be governed by the internal laws of the State of New York
(regardless of such State’s conflict of laws principles). The parties hereto acknowledge that this Agreement and the Related Documents were all negotiated with the assistance of counsel and, accordingly, such laws shall be applied without
reference to any rules of construction regarding the draftsman hereof.
8.5
Counterparts; Headings
. This Agreement may
be executed in several counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same agreement. The descriptive headings in this Agreement are inserted for convenience of reference only
and shall not affect the construction of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons may require.
8.6
Entire Agreement; Amendments
. This Agreement, the Exhibits and Schedules attached hereto, and the Related Documents contain
the entire understanding of the parties with respect to the subject matter hereof, and supersede all other understandings, oral or written, with respect to the subject matter hereof. Delivery of an executed counterpart of this Agreement and the
Related Documents by facsimile, electronic mail (including pdf) or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart. No amendment, modification, alteration, or waiver of the terms
of this Agreement or consent required under the terms of this Agreement shall be effective unless made in a writing, which makes specific reference to this Agreement and which has been signed by the party against which enforcement thereof is sought.
Any such amendment, modification, alteration, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
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8.7
Notices
. All communications or notices required or permitted by this Agreement
shall be in writing, and shall be deemed to have been given or made when delivered in hand, deposited in the mail, or sent by facsimile, in the case of the Borrower, and by email (with executed attachment), in the case of the Lender. Communications
or notices shall be delivered personally or by certified or registered mail, postage prepaid, or by facsimile or email, as the case may be, and addressed as follows, unless and until either of such parties notifies the other in accordance with this
section of a change of address:
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if to the Borrower:
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Independent Bank Group, Inc.
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1600 Redbud Blvd. – Ste. #400
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Mckinney, TX 75069
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Attn:
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Torry Bernsten, President & Chief Operating Officer
Michelle Hickox, Executive Vice President & Chief Financial Officer
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FAX: (972) 562-5496
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if to the Lender:
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U.S. Bank National Association
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1255 Corporate Drive, 6th Floor
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Irving, TX 75038
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Attn:
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Gregory Hargis, Vice President
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email:
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gregory.hargis@usbank.com
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(with executed attachment)
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8.8
Severability
. Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Agreement.
8.9
Further Assurances
.
The Borrower agrees to do such further acts and things, and to execute and deliver such additional conveyances, assignments, agreements and instruments, as the Lender may at any time reasonably request in connection with the administration or
enforcement of this Agreement or the Related Documents or in order better to assure and confirm unto the Lender its rights, powers and remedies hereunder.
8.10
Conflicts and Ambiguities
. In the event of any ambiguity or conflict as between the terms of this Agreement, the Related Documents or any other document executed and delivered pursuant to this
Agreement, the terms of this Agreement shall control.
8.11
Submission to Jurisdiction
. Any claim or issue arising out
of this Agreement or the Related Documents will be enforced or resolved in any state or federal court having subject matter jurisdiction and located in New York, New York. For the purpose of any action or proceeding instituted with respect to any
such claim, the Lender and the Borrower hereby irrevocably submit to the jurisdiction of such courts. The Lender and the Borrower irrevocably consent to the service of process out of said courts by mailing a copy thereof, by registered mail, postage
prepaid, to the Lender or the Borrower, as applicable, and each agrees that such service, to the fullest extent
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permitted by law (a) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding, and (b) shall be taken and held to be valid personal
service upon personal delivery to it. Nothing herein contained shall affect the right of the Lender or the Borrower to serve process in any other manner permitted by law or preclude the Lender or the Borrower from bringing an action or proceeding
for injunctive relief in respect hereof in any other country, state or place having jurisdiction over such action. The Lender and the Borrower hereby irrevocably waive, to the fullest extent permitted by law, any objection which it/they may now or
hereafter have to the laying of the venue of any such suit, action or proceeding brought in any court located in New York, New York, and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient
forum.
8.12
WAIVER OF JURY TRIAL
. EACH PARTY HERETO KNOWINGLY, VOLUNTARILY AND WITHOUT COERCION, WAIVES ALL RIGHTS
TO A TRIAL BY JURY OF ALL DISPUTES ARISING OUT OF OR IN RELATION TO (A) THIS AGREEMENT OR ANY RELATED DOCUMENT TO WHICH IT IS A PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED
IN CONNECTION THEREWITH, (B) ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR AND ANY RELATED DOCUMENT, OR (C) ANY ACT, CONDUCT OR OMISSION IN CONNECTION WITH THIS AGREEMENT, THE RELATED DOCUMENTS OR ANY
RELATIONSHIP CREATED THEREBY, REGARDLESS OF THE TIME WHEN THE SAME MAY OCCUR, AND AGREES THAT ALL MATTERS RELATING THERETO AND ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
8.13
Inducements
. All statements, promises or inducements made to any party hereto in connection with this Agreement and the
Related Documents are set forth herein or therein.
8.14
USA Patriot Act; Office of Foreign Assets Control.
The Lender
hereby notifies the Borrower and each of its Subsidiaries that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “
Patriot Act
”), it is required to obtain,
verify and record information that identifies the Borrower and each of its Subsidiaries, which information includes the name and address of the Borrower and each of its Subsidiaries and other information that will allow the Lender to identify the
Borrower and each of its Subsidiaries in accordance with the Patriot Act and the Borrower agrees to provide such information. In addition, and without limiting the foregoing sentence, the Borrower shall (a) ensure, and cause each Subsidiary to
ensure, that no Person who owns a controlling interest in or otherwise controls the Borrower or any Subsidiary is or shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of
Foreign Assets Control (“
OFAC
”), the Department of the Treasury or included in any Executive Orders, (b) not use or permit the use of the proceeds of the Loans to violate any of the foreign asset control regulations of OFAC or
any enabling statute or Executive Order relating thereto, and (c) comply, and cause each Subsidiary to comply, with all applicable Bank Secrecy Act laws and regulations, as amended.
8.15
No Liability of the Lender
. The relationship between the Borrower and the Lender shall be solely that of borrower and lender.
The Lender shall have no fiduciary responsibilities to the
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Borrower or its Subsidiaries. The Borrower agrees that the Lender shall have no liability to the Borrower or any of its Subsidiaries (whether sounding in tort, contract, or otherwise) for losses
suffered by the Borrower or any of its Subsidiaries in connection with, unless such losses are the result of gross negligence or willful misconduct of the Lender or any other Indemnitee, or breach in bad faith of the Lender or any other Indemnitee
of their respective obligations, arising out of, or in any way related to, the transactions contemplated and the relationship established by this Agreement and the Related Documents, or any act, omission or event occurring in connection herewith or
therewith. The Lender shall have no liability with respect to, and the Borrower hereby waives, releases, and agrees not to sue for, any special, indirect, or consequential damages suffered by the Borrower in connection with, arising out of, or in
any way related to this Agreement, the Related Documents or the transactions contemplated hereby or thereby.
8.16
Recitals
. The Recitals to this Agreement are true and correct and are incorporated in this Agreement by this reference.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year
first above written.
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INDEPENDENT BANK GROUP, INC.
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By:
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/s/ David R. Brooks
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Chairman of the Board & CEO
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U.S. BANK NATIONAL ASSOCIATION
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By:
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/s/ Greg Hargis
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Vice President
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S-1
REVOLVING CREDIT NOTE
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$35,000,000.00
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June 4, 2014
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FOR VALUE RECEIVED, INDEPENDENT BANK GROUP, INC., a Texas corporation and a registered bank holding
company (the
“Borrower”),
hereby promises to pay to the order of U.S. BANK NATIONAL ASSOCIATION, a national banking association (“Bank”), at its main office in Minneapolis, Minnesota or at such other place as the holder
hereof may from time to time in writing designate, in lawful money of the United States of America, the principal sum of Thirty Five Million Dollars ($35,000,000.00), or so much thereof as has been advanced and remains outstanding pursuant to
Section 2.1 of the Credit Agreement by and between the Borrower and Bank dated as of the date hereof (as the same may be amended, modified, supplemented, extended or restated from time to time, the
“Credit Agreement”).
The
Borrower also promises to pay all accrued interest on the unpaid principal amount of each Revolving Loan payable at such rates and at such times as provided in the Credit Agreement, and shall pay all other costs, charges and fees due thereunder, all
as provided in the Credit Agreement. This Revolving Credit Note (as the same may be amended, modified, supplemented, extended or restated from time to time, this
“Note”)
shall bear interest on the unpaid principal balance before
maturity (whether upon demand, acceleration or otherwise) at the rates set forth in the Credit Agreement. Capitalized terms not defined in this Note shall have the meanings ascribed thereto in the Credit Agreement.
Subject to the provisions of the Credit Agreement with respect to acceleration, prepayment or loan limitations, all unpaid principal with
respect to each Revolving Loan, together with accrued interest and all other costs, charges and fees, shall be due and payable in full on the Termination Date for the Revolving Loans.
This Note evidences indebtedness incurred under, and is entitled to the benefits of and is subject to, the Credit Agreement, together
with all future amendments, modifications, waivers, supplements and replacements thereof, to which Credit Agreement reference is made for a statement of the terms and provisions applicable to this Note, including those governing payment and
acceleration of this Note. Payment and performance of this Note are secured pursuant to a Negative Pledge Agreement, and reference is made thereto and to the Credit Agreement for a statement of terms and provisions thereof In the event of any
conflict between the terms of this Note and the Credit Agreement, the Credit Agreement shall control.
Subject to the Credit
Agreement, the Borrower may, from time to time and without premium or penalty, borrow, prepay and reborrow all loans evidenced by this Note in whole or in part, pursuant to the terms of the Credit Agreement.
The Borrower hereby agrees to pay such costs incurred by Bank, including reasonable attorneys’ fees and legal expenses, as are
specified in the Credit Agreement.
This Note is issued in and shall be governed by the laws of the State of New York.
No delay or omission on the part of Bank in exercising any right hereunder shall operate as
a waiver of such right or of any other remedy under this Note. A waiver on any one occasion shall not be construed as a waiver of any such right or remedy on a future occasion.
All makers, endorsers, sureties, guarantors and other accommodation parties hereby waive presentment for payment, protest, notice of
demand, notice of dishonor and notice of nonpayment and consent, without affecting their liability hereunder, to any and all extensions, renewals, substitutions and alterations of any of the terms of this Note and to the release of or failure by
Bank to exercise any rights against any party liable for or any property securing payment of this Note.
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INDEPENDENT BANK GROUP, INC.
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By:
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/s/ David R. Brooks
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Chairman of the Board & CEO
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DEFINITIVE AGREEMENT
NEGATIVE PLEDGE AGREEMENT
This NEGATIVE PLEDGE AGREEMENT (this
“Agreement”)
is made as of this 4
th
day of June, 2014, by INDEPENDENT BANK GROUP, INC., a Texas corporation and a registered bank holding company (the
“Borrower”),
in favor of U.S. BANK NATIONAL ASSOCIATION, a national banking association (the
“Lender).
RECITALS
The Lender has entered into the Credit Agreement with the
Borrower pursuant to which the Lender has agreed to extend credit to the Borrower upon the terms set forth in the Credit Agreement. The Lender would not have agreed to extend such credit but for this Agreement.
NOW, THEREFORE, in consideration of the extension of credit to the Borrower, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Borrower hereby agrees:
AGREEMENT
1.
Definitions.
Capitalized terms used herein without definition shall have the meanings ascribed thereto in the Credit Agreement
(as hereinafter defined). In addition, the following terms used in this Agreement shall have the following meanings:
“Credit Agreement”
shall mean the Credit Agreement by and between the Borrower and the Lender dated as of the date
hereof, as the same may be amended, modified, extended, supplemented or restated from time to time hereafter.
“Shares”
shall mean, collectively, 100% of the issued and outstanding capital stock, equity and other ownership
interests (and any rights to acquire any of such interests) of each Bank Subsidiary owned by the Borrower, and any further securities, warrants, options, rights, cash or property issued as an addition to, in substitution of, in exchange for, or with
respect to such ownership interests.
2.
Negative Pledge.
The Borrower covenants and agrees that, unless consented to
by the Lender, from and after the date of this Agreement and until the Termination Date and until all Obligations to the Lender are paid in full, the Borrower will (a) not sell, option, exchange or otherwise convey any legal, equitable or
beneficial interest in the Shares or any part thereof, and (b) keep the Shares free and clear from any pledge, mortgage, security interest, hypothecation, lien, charge, encumbrance, conditional sale agreements, rights or claims of third
parties, other burdens and any security interest therein, other than Permitted Liens.
3.
Certain Representations and Warranties.
The Borrower represents and warrants to
the Lender as follows:
(a)
Ownership.
The Borrower is the record and beneficial owner of all the Shares. The Shares
represent, and during the term of this Agreement will represent, all of the issued and outstanding capital stock, equity and other ownership interests (and any rights to acquire any of such interests) of each Bank Subsidiary.
(b)
Authority.
The Borrower has all necessary power and authority to enter into this Agreement and perform its obligations
hereunder. The execution, delivery and performance of this Agreement: (i) do not require the approval of any Governmental Authority or other Person; and (ii) will not violate any law, agreement or restriction by which the Borrower is
bound. This Agreement is the legal, valid and binding obligation of the Borrower and is enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles relating to enforceability.
(c)
Title.
The
Shares are genuine, and the Borrower has good title to the Shares. The Shares are owned by the Borrower free and clear of any pledge, mortgage, security interest, hypothecation, lien, charge, encumbrance, conditional sale agreements, rights or
claims of third parties, other burdens and any security interest therein, other than Permitted Liens.
4.
Default;
Expenses.
The failure of the Borrower to comply with any term of this Agreement shall constitute an Event of Default under the Credit Agreement. In addition, the Borrower shall reimburse the Lender (and any agent or representative of the Lender)
for any expenses incurred by the Lender (or such agent or representative of the Lender) in protecting or enforcing its rights under this Agreement, including, without limitation, reasonable attorneys’ fees.
5.
Further Assurances.
The Borrower agrees to execute and deliver, or cause to be executed and delivered, all such other papers
and to take all such other actions as the Lender may reasonably request from time to time in order to carry out the purposes of this Agreement.
6.
Term.
When all of the Obligations are irrevocably and fully paid and fully discharged and the Lender shall have no further obligation or commitment to advance or extend credit to the Borrower
under the Credit Agreement, this Agreement shall terminate. Notwithstanding the foregoing, this Agreement shall apply to all extensions, renewals, refinancings or modifications, if any, of the Obligations.
7.
Miscellaneous.
(a)
Waivers.
No failure to exercise and no delay in exercising on the part of the Lender any right, power or remedy under this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The failure of the Lender to insist upon the strict observance or enforcement of any
provision of this Agreement shall not be construed as a waiver or relinquishment of such provision. Any waiver of any right, power, remedy, term or condition contained herein shall only be effective if it is in writing and signed by the Lender.
(b)
Amendments.
This Agreement may only be amended by a writing executed by the Borrower and the Lender.
2
(c)
Governing Law.
This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.
(d)
Successors and Assigns.
This Agreement shall inure to the benefit
of the Lender and be binding upon the Borrower and its successors and assigns. This Agreement shall not be assigned by the Borrower.
(e)
Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which when taken together shall be deemed to constitute one and the
same agreement.
(f)
Headings.
The Section headings set forth in this Agreement are for convenience of reference only
and shall not be deemed to define or limit the provisions hereof or to affect in any way their construction and application.
(g)
Incorporation of Recitals.
The Recitals to this Agreement are true, correct and incorporated herein by reference.
[Signature Page Follows]
3
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Negative Pledge
Agreement as of the date first above written.
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INDEPENDENT BANK GROUP, INC.
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By:
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/s/ David R. Brooks
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Chairman of the Board & CEO
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-3 of Independent Bank Group, Inc. of our report dated March 27,
2014, relating to our audit of the consolidated financial statements, which appear in the Annual Report on Form 10-K of Independent Bank Group, Inc. for the year ended December 31, 2013.
We also consent to the reference to our Firm under the caption “Experts” in the Prospectus, which is part of this Registration Statement.
MCGLADREY LLP
/s/ McGladrey LLP
Dallas, Texas
June 25, 2014
Exhibit 23.2
Consent of Independent Public Accounting Firm
We consent to the reference to our firm under the caption “Experts” in the Registration Statement on Form S-3 and related
Prospectus of Independent Bank Group, Inc. for the registration of subordinated debt securities, preferred stock, common stock and units and to the incorporation by reference therein of our report dated March 25, 2014, with respect to the
December 31, 2013 and 2012 consolidated financial statements of BOH Holdings, Inc. included in the Current Report on Form 8-K/A of Independent Bank Group, Inc., filed with the Securities and Exchange Commission on June 9, 2014.
HARPER & PEARSON COMPANY, P.C.
/s/ Harper &
Pearson Company, P.C.
Houston, Texas
June 25, 2014